FCA approval paves way for Scottish fintech firm’s new product

LendingCrowd, an alternative financier for SMEs, is preparing to launch an ‘innovative finance ISA’ (IFISA) – one of the first in the UK.

Since its foundation in 2014, LendingCrowd, the only P2P lender headquartered in Scotland, has facilitated loans of more than £9m and has over 2000 investors signed to its platform.

Deals range in size from £20,000 to more than £1m and in 2015 LendingCrowd helped Edinburgh-based Diet Chef complete one of the largest P2P deals in the UK in a £1.5m debt finance transaction.

It follows a successful year for the platform in which it became the UK’s first P2P lender to SMEs to move from interim to full authorisation from the Financial Conduct Authority, paving the way for the IFISA launch.

Stuart Lunn, chief executive and co-founder of LendingCrowd, said: “While we are not the biggest P2P platform in the UK, the investment made in our people and technology combined with the FCA approval has positioned LendingCrowd right at the front of the market when it comes to alternative financing of UK SMEs.

“We intend to build on this position of strength in 2017, continue to innovate for the benefit of our clients and will be updating the market on plans to launch our ISA during Q1.”

Last October, the company partnered with the Scottish Investment Bank, the investment arm of Scottish Enterprise, in an initiative that will see £2.75m invested in Scottish SMEs across the LendingCrowd platform. It is expected that the move will stimulate loans of up to £35m for SMEs while leveraging significant private sector investment.

The number of alternative and innovative sources of funding has increased in recent years. The UK alternative finance sector provided £3.2bn worth of loans, investments and donations in 2015, up 84% compared to 2014.