LendingCrowd, an Edinburgh-based peer-to-peer lending platform providing affordable loans to SMEs, will receive £2.75m of funding from the Scottish Investment Bank (SIB), it was announced yesterday.
SIB is the investment arm of Scottish Enterprise and this initiative, which is expected to stimulate loans of up to £35m to Scottish SMEs, is the first to be delivered by it under its expanded remit.
The agreement will allow SMEs to access loans of between £5k and £250k over terms ranging from six months to five years. Applicants will apply directly to LendingCrowd which will undertake the appropriate due diligence on each investment case and provide funding on commercial terms.
Commenting on the announcement, Kerry Sharp, head of the Scottish Investment Bank, said that they “are increasing the diversity of finance provision in Scotland and pointed to the new initiative as one way in which they are “opening up innovative sources of alternative funding to Scottish SMEs.”
“Peer-to-peer lending is one of the fastest growing areas of alternative finance and this initiative with LendingCrowd will increase competition in the marketplace and provide greater diversity and choice for Scottish SMEs,” she continued.
Stuart Lunn, CEO and co-founder of LendingCrowd, added that the agreement with Scottish Enterprise was one of the first initiatives of its kind in Europe and would “help to fund the next stage of growth for some of Scotland’s most exciting SMEs.”
“This recognises the increasing importance of peer-to-peer access to finance and, in practical terms, will allow a significant number of small to medium-sized businesses the chance to pursue their ambitions to expand and compete in the UK and internationally.”
Since launching in 2014, LendingCrowd has facilitated loans totalling over £7m and has over 2000 investors signed up to its platform. Deals range in size from £20,000 to over £1m, and in 2015 LendingCrowd helped Diet Chef complete one of the biggest ever peer-to-business deals seen in the UK in a £1.5m debt finance transaction.