Scottish crowdfunder raises £1m in six months

Scottish SMEs are getting a boost from the country’s first crowdfunding platform, which has raised nearly £1m in just six months.

Launched last September, LendingCrowd helps businesses access funding and has signed up more than 500 investors.

Funders bid against one another to invest in SMEs at a range of risk levels, earning returns of between 5.95% and 12.25% on investments from £20 up to tens of thousands.

Co-founder and chief executive Stuart Lunn says that the company has “ambitious” plans for this year. He added that, as Scotland’s only dedicated peer-to-peer lender, the platform can help support emerging local businesses and sectors.

However, he said that he hopes that, after the 2015 elections, the government will also look to improve existing rules to better support both small business growth and encourage investment.

“We are hoping that increases in personal allowances and pension reforms will give people more options to invest extra funds they may have and Peer-to-Business crowdlending is one of many options for reinvesting capital,” he said.

“For example, from April, many future retirees will have the option to take out and reinvest a lump sum from their pension into a P2P investment of their choosing.”

Current growth rates suggest that the alternative finance market in the UK will be worth around £4.4bn by the end of the year.