Entrepreneur News

on the rebuildingsociety.com blog

23rd Jun, 2017

Onwards and Upwards for Luxury Lady Limited

Luxury Lady Limited is currently seeking funds on rebuildingsociety.com. The company has launched the ChinUp Mask, a new beauty treatment designed to improve the appearance of a double chin through 30-minute at-home treatment sessions.

The company has turned to peer-to-business funding to raise funds to purchase stock for recent contracts they have secured, and invest in online marketing activity. Their product has been featured in a variety of media outlets, and was a finalist in four different beauty awards. The team at Luxury Lady Limited plan to launch their ambassador programme soon. We spoke to Ronnie, the company’s CEO, to find out more.

Tell us a bit about Luxury Lady Limited and the ChinUp Mask product.

Set up in August 2015, Luxury Lady Ltd now directly employs a team of nine core staff.

The world we are living in is changing, with people wanting instant, on-demand results for everything: from Uber to Netflix to Amazon Prime. Identifying this trend in the market, we didn’t think that beauty products should be any different. People are tired of purchasing the same creams with different labels and hearing the promises from beauty companies, that if you use this product every day for six months, you might see a similar improvement to the person in the “after” picture.

A recent survey stated that 68% of people are unhappy with their neck and chin area. ChinUp Mask is a product that addresses this problem area, whilst also satisfying the trend for instant results. It is a non-surgical facelift that can improve the appearance of a double chin, sagging jowls and turkey neck in one 30-minute at-home treatment.

The real “magic” of ChinUp Mask is in the unique formula in the facemask. This facemask is infused with a blend of five key active ingredients (Hyaluronic acid, Q10, Corum 9235, Vitamin E and Skintronics) which help to lift and firm the chin and neck area, improving the appearance of sagging skin, fine lines and wrinkles. The slimming band is there to keep the mask from falling off, and to ensure that the cream is evenly absorbed into the skin.

The instant results of the product mean that it is perfect both for people looking for a quick fix ahead of a special occasion, night out or event, as well as for people who use the product more regularly, every two to three days, to maintain and improve the look of their chin. As a consequence, we have found that our customer demographic ranges from their people in their 20s through to 60+, with people opting to either do the treatments themselves at home, or go to a salon.

Chin Up

How did the product come into being?

I was sitting with a friend of mine, brainstorming new ideas for a business venture together. We were both tired of relentlessly looking for new customers to purchase products, and wanted to do develop a consumable product; something that people would buy again and again. This would mean that the total value of the customer would not be limited to the single product sale, but to a potential lifetime of regular repeat purchases.

Building on this idea, the choices were narrowed down to creating either a beauty or a food product. Both are strong relatively recession-proof markets; everyone needs to eat, and from personal experience, I knew that many women would prioritise their beauty products. Both have possibilities for repeat purchases if the customers are happy with the product.

Then, almost as a throwaway comment, my friend recalled something his mum had said to him earlier that month, how it would be incredible if there were a treatment that could help lift and firm the chin and jawline. This piqued my interest – we had found our problem!

Research into the beauty market showed that as a result of government investments, South Korea is the world leader in beauty technology, seven years ahead of anywhere else. Flying out to the far east, we met with a fantastic, incredibly intelligent team and spent some time with them further exploring what we were looking to achieve and reviewing different concepts. They took it all on board, and within two months, we received our first set of samples.

However, the laws around cosmetics are very different in the EU to South Korea, and although the product tested well, the formula was not within the legal threshold requirements of EU cosmetics law, and so needed to be reworked. After much back and forth, we cracked it. A formula that worked, with instant results, that was safe, affordable and effective. We are still working closely with the team in South Korea as we look to further improve the product and also apply the same technology to other problem body areas.

What success has the ChinUp Mask had so far?

Although we are still very much at the beginning of our journey, we have already had some great success.

We are regularly featured in the mainstream national press, and are especially proud of OK Magazine calling us a Wonder Product and putting us in their “5 of the Best at Home Spa Musts”.

The product has been a finalist in four prestigious beauty awards for categories including best innovation and best facemask and, with the product being so demonstrable, giving instantly visible and measurable results, we have seen a lot of success on the TV home shopping networks; the product has regularly sold out. Building on that success, we are now working with a company who will be launching Direct Response TV advertising campaign across Europe and North America. The product also scores highly in Amazon UK’s beauty products listings.

Earlier this year, we were selected as a partner of the Official Grooming Room of London Fashion Week. This is an area where the models, press, bloggers, and influencers go between shows to relax and have a treatment. The product is available in several prestigious Toni & Guy salons across central London, with the vision to roll this out nationwide. We have also recently finalised a collaboration with Nails Inc.

Last July, we attended Cosmoprof North America, the largest professional beauty trade show in North America. We were hand-selected by beauty professionals out of thousands of other people to be showcased in the exclusive Discover Beauty section; an area reserved for the next big thing in beauty. The show was a great success and we managed to secure orders for over 60,000 units in the months after the show. We will be returning this year, participating in the Discover Beauty section and hoping to build on last year’s success.

In March this year, we attended Cosmoprof Bologna, the largest professional beauty trade show in the world. Here, we were also hand-picked for the exclusive Cosmoprime area. We left the show with a full contact book of people wanting to work with us from around the world, and are now in negotiations with many retailers and distributors to support our international growth and expansion.

Can you tell us a bit about the upcoming ambassador programme?

This is a very exciting initiative we have been working on that will have a major impact on global awareness of the brand, but more importantly, it will drive sales at a very affordable and scalable cost.

The Ambassadors are hand-selected influencers with an established following and high social net worth. These Ambassadors would include celebrities, bloggers, industry experts, and social media stars, typically with a following of 500k+.

We will work with these Ambassadors to implement various initiatives that will drive product awareness and generate sales. The Ambassadors will be given their own unique web links and discount codes to promote the product across their social channels. This will allow for their activities to be tracked, and to directly identify the sales that they have generated. The Ambassador will receive a commission on every item sold. This model incentivises the Ambassador to regularly post about the product, as they will directly earn from every posting, and be able to see in real-time the revenue they have generated.

We are already in final negotiations with a range of Ambassadors to target different key demographics. The total reach of the Ambassadors we are currently in discussions with totals to just under 15 million people.

Why did you choose to use rebuildingsociety.com for funding?

We chose rebuildingsociety.com on a recommendation from our advisors, Central Finance, who know and work in the SME finance market on a daily basis. The process was quick and simple, but thorough, and allowed us to reach a large number of potential funders.

Why would you encourage investors to lend to your company?

I have built a strong and competent team with a proven ability to develop and successfully launch new brands to the market. The company is rapidly expanding, with year two revenues on target to be 10x year one revenues.

ChinUp Mask provides a solution to that troublesome area which previously could only be helped by surgery. It is an affordable, effective and safe alternative that doesn’t carry the risks and costs typically associated with surgery.

The results of the product last on average two to three days, and so customers are required to purchase additional refill packs to maintain their improvements. Therefore, the lifetime value of the customer is quite high, as we steadily build our loyal customer following repeat purchasing.

Building on this customer loyalty, we will soon be launching a subscription service, where customers will be able to sign up for regular deliveries of ChinUp Mask at a reduced cost. This will be great for the business as we will be able to guarantee a minimum number of customer sales and revenue each month.

We have also been working to strengthen our online position to drive more direct customer sales. For direct website and Amazon sales this month, we are on target to exceed revenues of £27k. In addition to direct B2C sales, the company is in a strong position, with a growing order book of B2B distribution, retail and salon clients across the world. We are also currently finalising launch strategies and negotiating distribution deals for many international territories, including Europe, Russia, China, South America, and the ASEAN and GCC countries.

In the eight months preceding May 2017, turnover has increased to £863K & PBT £118K. This growth hasn’t happened overnight, but has been building for the last two years, throughout constant marketing and sales activities. The loan from ReBS is also backed by a Personal Guarantee from the director and shareholder.

Can you tell us a bit more about what the funds will be spent on?

With a solid order book, the funds will be primarily used to purchase stock to enable us to satisfy upcoming B2C and B2B orders in a timely manner.

What do you hope the future holds for Luxury Lady Limited?

In the short term, our immediate goal is to build a sustainable business and create new relationships across the world that don’t require us to use large amounts of working capital to fulfil orders – whilst at the same time allowing the business to trade and promote an extremely unique product.

We plan to increase the number of orders for retail distribution in the countries where we have already established a footprint, whilst also opening up new territories across the world. We will also look to scale our digital footprint, implementing the social marketing strategies we have developed and extend them internationally, supporting brand awareness and driving sales.

Having established a reputable name for the brand together with the supply networks and relationships to market, we will then look to introduce additional products to the range, targeting other key problem areas.

We are not looking to be just another beauty product; our long-term strategy and goal is to provide the market with something new and revolutionary. Coming from a consumer-focused industry where we have honed our skills in identifying market trends, we have been able to approach the beauty industry from a completely new perspective, with our unique thinking and different approach.

People have been waiting for something to revolutionise the beauty industry for many years, and ChinUp is a next generation beauty product. We plan to really shake up the entire beauty industry, bringing to market a range of new and innovative products that provide instant results to core problem areas with safe and effective products that don’t have the risks of surgery.

 


06th Jun, 2017

Summer can be a difficult time for many small businesses, but it needn’t be!

Summer Finance
Whilst the start of summer marks a period of relaxation and vacation for many people, it is often one of the most difficult time periods for small businesses. Many of their customers are away enjoying the sunshine rather than making purchasing decisions – something which can have a significant impact on many a business’ cash flow and revenue.

If you know that your business is one of these businesses, why not plan ahead now!

How Can You Avoid Summer Cash Flow Woes?

1. Plan Ahead

If you already know that you’re likely to experience a dip in sales and cash flow, add these to your cash and sales forecasts now! By doing this, you should be able to forecast how much revenue you can expect and what your associated costs will be. If you identify a shortfall, make a plan to avoid the shortfall or a plan to cover any shortfall.

2. Promote your Business

Depending on your business and margins, you could seek to offer some incentives to new and existing customers. It may be worthwhile spending slightly more on marketing and promotion leading up to the expected quite period. Encourage customers to buy when they wouldn’t usually and offer them a reward or discount for doing so.

3. Review your Finance Arrangements

If you know that you might experience a cash shortfall, look into alternative and flexible forms of finance, or speak to your finance providers ahead of experiencing any short term difficulties so that you can benefit from extended terms and avoid any unnecessary penalties and fees.

How can we help?

  • We can provide you with quick and affordable business finance.
  • We specialise in quick finance for a range of different size businesses and their varying needs.
  • We provide loans for 6-60 months with no early repayment penalty.
  • Raise anything from £25,000 upwards to see your business through the summer period.

Find out more now

Simply submit a quick loan application or call us on 0113 8150 244 to speak to one of our helpful team members about your business finance needs.apply-now


17th Mar, 2017

Prima Cleaners Looks to the Future

Prima Cleaners has a long history in the launderette business. They recently turned to rebuildingsociety.com to seek £53,000 in funds that they plan to use to expand and develop their company.

We spoke to Graeme Davies to find out more about Prima Cleaners, and asked him about the company’s history and future.

Thank you for talking to us today, Graeme. Tell us a bit about Prima Cleaners.

Prima Cleaners was founded 16 years ago, in the newly-earmarked business district of Liverpool. During the first two years, the store struggled, as there were not many commercial offices on the high street. (more…)


14th Mar, 2017

Xanadu Seeks Expansion Funding

Xanadu UK Retail Limited is seeking funding via rebuildingsociety.com for the acquisition of a market-leading wholesale lingerie business in the UK. The company is seeking £200,000 to purchase Blue Moon Lingerie Limited, a wholesale lingerie distributor that was founded in 2003.

We spoke to members of the Xanadu team to find out more about the company’s loan application and upcoming plans.

Tell us a bit about Xanadu and what it offers, both on a wholesale and retail level.

Xanadu has two primary business areas – retail and wholesale. Xanadu Boutique offers lingerie and accessories from well-known designers through both physical shops and online. Xanadu Trade, meanwhile, was established to offer high-quality lingerie, trade only, to traditional and online retailers. We cover various genres of products, including everyday wear, fashion, bridal and nightwear. (more…)


27th Feb, 2017

Full FCA Authorisation

rebuildingsociety.com has been awarded full authorisation from the Financial Conduct Authority in recognition of our compliance with sector-specific regulations.

We are very excited to share news of this major achievement and important milestone with our community. Authorisation means that we meet the rigorous standards set by the FCA and that we can soon start to offer the Innovative Finance ISA.

Although we have been operating under FCA rules on Interim Permission since April 2014, being granted full authorisation helps us to continue building on the important relationships of trust we have with all our clients. We are proud to have achieved this milestone ahead of many other platforms, which we believe is testament to our small but dynamic team, systems, processes and controls.

(more…)


19th Dec, 2016

Taylor Made Revisits rebuildingsociety.com

Last year, Taylor Made Property Management Limited tested the crowdfunding waters. They applied for a loan of £103,500 on rebuildingsociety.com; a loan that was fully funded and successfully completed in January 2015. Now, they’re back; this time with a loan application seeking £125,000. The company is the first to make the most of the new changes to the marketplace that we recently introduced, regarding security-dependent interest rate reduction.

Taylor Made Property Management Limited was incorporated in October 2014 with the express purpose of taking over the Preston-based Martin & Co. franchise. This purchase was successful, and the company began trading a few months later.

The funds the company raised through their first crowdfunding efforts in early 2015 were used as planned; to purchase the existing residential letting agent, Woodholme Residential Lettings Limited. The purchase was successful completed on 28th February 2015, just over a month after the loan completed on rebuildingsociety.com.

Richard Taylor has extensive knowledge of the property industry, both in terms of running his business, and as a landlord. We spoke to him about the company’s recent history, their future plans, and the appeal of crowdfunding.

Richard, thank you for talking to us today. Tell us, what made you come back to rebuildingsociety, rather than seeking additional funding elsewhere?

The more traditional funding sources make it so difficult to refinance or even borrow as a business that the obvious choice when looking at refinancing was to come back and see what could be done through rebuildingsociety.com, who I have a track record and history with. I knew that my application would be judged on actual business viability, which I would have the ability to discuss with someone, rather than on a set of rules and criteria that a computer processes and rejects with no human interaction.

Is this interaction something you experienced during your first crowdfunding experience with us?

Yes; and I think the opportunity to communicate directly with lenders is a definite plus. It’s a great way for those who struggle to get more ‘traditional’ sources of funding to begin or progress their business ideas.

How has your company progressed since you completed the loan in early 2015, nearly two years ago now?

It’s been an interesting two years. Regarding the business I acquired, there was a lot that needed to change to bring it up to speed with the industry, and embrace some of the technological changes that would enhance the service offered to tenants, landlords and vendors.

This led to changes in personnel, and so much of the first year was taken up with simply steadying the ship and implementing correct procedure, all of which I am pleased to say were well received. We did not lose any landlords or properties; in fact, we added over 20 properties to our fully-managed portfolio.

The second year has been about building on that success, and we now have a steady, reliable team who are on board with the direction in which the business is going. This is great, because it has allowed me to take a more holistic approach to the development of the company, and to look at areas of potential growth and diversification.

What have been some of these areas of potential growth?

Well, for example, we have had particular success in the vibrant student market in Preston. We now have about 270 rooms available for the 2017/18 academic year, which includes 244 rooms in new, purpose-built, private student halls, which we are the only agent in Preston to be marketing. We have also been working with a number of developers, both locally and nationally, who have seen the potential in Preston and are looking to convert and build residential properties for both the sales and rental markets.

You are currently seeking £125,000 of funding through rebuildingsociety.com. If the loan is fully funded, what will you use the money for?

A large part of it, £75k, will be used to pay off the existing loan with rebuildingsociety. The remaining £50k will be used to fund a strong marketing campaign for the next 12 months, to help us increase our market share in the sales market, as well as reach some other key business development objectives and provide some stability in terms of cash flow.

We recently introduced some changes regarding security-dependent interest rate reductions, and you are the first company to benefit from these changes. What are your views on these improvements?

This is something that has definitely benefited me in applying for this loan. I think the improvements are a plus for both parties, as it encourages the borrower to provide better levels of security which can help reassure lenders that the security offered can genuinely repay the loan should the worst happen.

Why should lenders consider lending to your business?

I have an excellent track record of repayment, which will obviously continue with the new loan. There are a number of challenges facing the housing market at the moment; I believe that we have a good, strong business model with a clear vision of the areas of development and improvements needed to ensure that we can continue in spite of these changes.

With this in mind, what do you hope the future holds for Taylor Made Property Management?

Further growth of the franchise, both within the current geographical area and then potentially expanding to surrounding areas, as well as diversification into property development.

You can find Taylor Made Property Management’s loan profile here.


23rd Nov, 2016

The A-E of Reasons to Take a Business Loan

 Asset Purchase

Assets can often be purchased through a hire purchase agreement, but where this option is unavailable a business loan can fill the funding gap and allow you to spread the cost of potentially expensive equipment.  In some instances the asset can act as security for the loan which will somewhat reduce the risk.

In 2015 more than £29 billion in finance was provided by members of the The Finance & Leasing Association to assist with asset purchases.  This figure is further boosted by the work being carried out by the Peer-to-Peer funders who offer an alternative route to finance outside of the traditional sources.

Business Acquisition

Business acquisition is the process of acquiring another company in order to build on strengths or weaknesses of the acquiring company.  The aim is often to aid growth in a quicker manner than would normally occur organically. We have also supported new business owners who are able to show experience in their field of purchase and where security is strong to support the acquisition.

Cash Flow

Successful businesses typically have a healthy cash flow, but even the best run businesses can experience fluctuations and cash flow finance can be an effective way to ease cash flow issues during busy periods.  For short term options, businesses can use credit cards and overdrafts where appropriate.  Longer term requirements such as construction firms covering a shortfall before they are paid by their customers and import/export or retail businesses making large inventory purchases to save money a loan can offer timely support to help plug this gap in finance. Another popular option is invoice financing and it’s important to consider the best fit for your organisation before entering in to any agreements.

Debt Consolidation

A fairly common use of a loan is to consolidate other debt.  This may seem confusing but there are three main reasons why a business may wish to take this route; businesses can spread the cost of an expensive loan over a longer period, combine several smaller loans into one more manageable loan or they may wish to refinance at a better rate.

Some debt consolidation companies have a bad reputation and Money Saving Expert, Martin Lewis rightly warns his readers to be wary of these in this excellent piece on his website.

The key here is to make sure the deal is the right one for you.  Are the savings on the monthly payments going to help you and your business to succeed? Once you have considered the likely rate and repayments on the consolidation loan you will be in a better position to decide if this is the right move for you, but whatever you do, do not blindly accept a deal without considering the benefits or potential pitfalls.

Expansion

If you are looking to grow your business, expansion can take many forms.  There are a plethora of options for expansion including taking on new employees, larger offices, additional sites, product diversification and taking your product online.  You may find a cash injection from a loan helpful in achieving your desired growth. It can help to pay for the new revenue stream in it’s early stages before it starts to pay for itself and could help you to achieve your planned expansion earlier than you may have through organic growth.

Before taking a loan for expansion you should be confident that you have planned effectively and considered the relative risks and challenges.  If the expansion is unsuccessful for any reason you will still be expected to pay the remainder of the loan from your existing profit, so it is vital that there is a clear route to profit before accepting finance to fund the project.

If you are a business looking for funds, bypass the banks and get a better deal in just a few days, call us at 0113 8150 244 or start your online loan application today here


11th Nov, 2016

The Return of an International Sweet Treat

In 2014, Candy Hero Ltd. came to rebuildingsociety.com looking for an influx of funds in order to expand. They planned to use the investment to boost wholesale sales, strengthen equity and then open a new UK store in time to maximise Christmas time sales.

Candy Hero Ltd. was founded in December 2008, by two entrepreneurial siblings with a mission to bring unique, specialist and delicious sweets from all over the world to sweet-toothed customers in the UK and Europe.

The online shop was launched in 2009, to be followed later by high street shops in York and Leeds. Visit one of their shops, and prepare to be tempted by Birthday Cake Golden Oreos, exploding cinnamon candy, Nerds, giant lollipops, wasabi candy and boxes of Jelly Belly Buttered Popcorn Jelly Beans, to name just a few from the vast collection. The 10,000 square foot warehouse in Bradford sees around 4,000 unique product lines carefully handled by employees individually chosen to fit the company’s high energy, innovative ethos.


The sweet importers and retailers’ first loan application was a great success; brothers and co-owners Frank and Leo managed to raise the target £50,000 from investors. Candy Hero Ltd. invested the money they raised into the wholesale distribution of imported sweets, snacks, and groceries. They decided not to open a shop, as they were unable to find an adequate unit within their chosen city. Instead, they focused on their online sector. In the last two years, the company has:

  • grown turnover significantly; 2015 to 2016 saw 83% growth
  • increased their stock-holding capacity from 5,000 to 10,000 square feet
  • acquired a great number of additional wholesale customers
  • built a proprietary pre-order system
  • co-ordinated a huge UK product range comprising around 10,000 lines available for pre-order and export
  • improved internal systems with strong procedures that improve staff training processes
  • added powerful price and margin controls and mitigated currency fluctuations

Frank commented on their experiences with rebuildingsociety:

“They provided a smooth process prior to listing the application, support throughout, and a platform that is clear and easy-to-use. Rebuildingsociety is a very impressive social business that is a powerful tool when you need extra finance above and beyond what may have been already possible.”

Perhaps one of the keys to their online funding success was the company’s open-door policy. Frank discusses business with his team quite openly, “from the top to the bottom of the organisation, in response to any question.” Therefore, he embraced the discussion forums available on rebuildingsociety.com, believing that “talking business with lenders in a peer-to-peer environment with the same openness and clarity builds up the confidence to invest in us.”

Now, Candy Hero is back with a new loan application. The return borrowers are well-supported by rebuildingsociety’s lender base, something they hope will help them fund their £300,000 loan application. If successful, the team plan to refinance £184,000 to achieve cheaper interest per month and fewer capital repayments per month, and use additional capital to add to the stock cycle.

When asked why they decided to return to Rebuildingsociety, Frank explained that while their bank is very supportive, recently offering them a new import loan facility, they cannot approve a loan of this size. As he commented: “The only method of gaining a loan of this size would be crowdfunding and the only place I want to crowdfund is Rebuildingsociety.”

Read about the company on their website, and find out more about their loan application at rebuildingsociety.com.

Lending to businesses carries risk. Past returns are not necessarily a guide to future returns. Any unrepaid capital is at risk of arrears or default. To find out more please visit http://reb.so/risk


24th Oct, 2016

Changes to the Marketplace

We’ve been working hard to bring you good quality borrowing applications for you to consider. Currently businesses that are eligible to borrow through rebuildingsociety.com, must have at least two years history, an average turnover of £50,000 a quarter and offer at least a personal guarantee as security. The average final rate paid by borrowers on our loan book is over 20% APR*, this rate is paid usually regardless of the security offered in support of the loan.

Currently, the risk rating given to the borrower drives the maximum starting rate for bids. To incentivise applicant borrowers to offer more or better security we are introducing a modifier to the maximum rate ceiling on the loan auction.

Whilst we currently take security into account during the underwriting process, it is not a significant factor in determining the risk rating given to the borrower, and therefore has little bearing on the cost of the finance.

From the 26th October 2016, the starting rate on a loan will be driven by the security strength and Loan To Value (LTV) score of the security rather than the final risk rating. The underwriting of the loan will be done in the same manner as before and risk ratings between A+ and C will continue. The weightings attributed to the determination of the Risk Rating in our model will remain unchanged, therefore a loan that was rated as C risk earlier, will still be rated as a C rated loan, allowing you still to view the suggested relative risk of the business.

The Changes in Practice

What is it?

A new borrower incentive to encourage borrowers to offer more and better security in support of their loan.

How does it work?

The borrower can offer a wide variety of security to support their loan. We’ve assigned a nominal value to the different types of security, making some security ‘more valuable’ than others. For example a 1st charge on a property will be deemed a more valuable form of security than a company debenture, and as such they will be rewarded with a lower starting interest rate.
The more security added, the more the starting rate will be reduced* as the security added works in a cumulative way linked to the loan to value ratio.
The starting maximum rate will never be modified lower than 5% of the standard maximum rates, which are currently as follows:

  • A+ = Max rate 11%
  • A= Max rate 14%
  • B= Max rate 17%
  • C= Max rate 20%

Therefore a C rated loan will never have a maximum starting rate of less than 15%.

The security we can accept from a borrower is ranked in priority below.

  • 1st Charge Commercial Property
  • 1st Charge Non Residential Property
  • 2nd Charge Commercial Property
  • 2nd Charge Non Residential Property
  • 1st Charge Residential Property
  • Fixed Asset Debenture
  • 2nd Charge Residential Property
  • All Assets Fixed and Floating Debenture
  • Corporate Guarantee
  • Personal Guarantee Insurance

Therefore, depending on the LTV on the security, a 1st legal charge taken on a commercial property in support of a loan will be ranked higher than a loan with an All Assets Debenture and may be achieve a lower maximum loan rate. Similarly, based on the above a loan secured on a 1st charge non residential property with an exceptional LTV will not achieve a better rate than a loan secured on a 1st commercial charge that also has an exceptional LTV, unless the former is accompanied by additional security.

Personal Guarantee’s do not qualify for a reduction in the interest rate as this is a mandatory requirement for all loans.

Why are we introducing it?

We have received feedback that the security being offered should have a more direct effect on the rate of loans. As such, we are rewarding borrowers who choose to back their loan with additional security. In the long run this should result in a higher percentage of secured loans and an increased rate of recovery.

When will it be introduced?

The security discount will apply to all new loans from Wednesday 26th October 2016.

How will this affect you and your use of the site?

The bidding process of the site remains unchanged as does indicative risk rating given to each loan, the only change will be the maximum starting rate of any loan that achieves the reward.

Will this be applied to historic loans?

No, but existing borrowers who reapply for new finance may qualify for the ceiling rate reduction.

Will this reduce my returns?

We expect any reduction in average gross returns to be offset by an improvement in net returns.

As ever you should always review each loan application in detail before lending. Where you have questions in regard to an application you should put these to the borrower via the discussion forum on each application.

If you have not already done so, please read more about the risks associated with lending to businesses.


11th Aug, 2015

4 easy ways you can reduce the interest rate of your peer-to-business loan

Part of what draws many borrowers to crowdfunding is a sense of control over the outcome of their loan. Did you know that borrower behaviour can have a serious impact on a loan’s interest rate?

A few simple behaviors can make all the difference in your loan’s competitiveness — and more competition means a better rate when your application completes. Here are a few ways you, the borrower, can incfluence your rate.

1. Engage with questions on discussion forums.

Potential lenders want to hear from you — whether it’s to get to know you better, to get your feedback on concerns and questions about the loan, or to get your financial information. If you respond quickly and cheerfully to their queries, this will boost confidence and improve the likelihood of securing their support.

2. Provide as much information as you can on your loan profile.

Upload accounts, any awards, and all positive information or data that is going to frame you and your business in a positive light. This is the flipside of number one: Get as much information about yourself and your loan into your profile as possible so lenders don’t have to go digging or turn to the discussion board to find the answers they need to make an informed decision about lending to you. Your page should make clear who you are, what your business is, what the loan is for, and why lenders can trust that their investment will have positive results for them.

3. Show how you benefit the community.

Demonstrate the social good you do, or find another way to show a human side to the business. Crowdfunding is different from other finance models, in part because the lending process feels personal. If you can demonstrate the ways that your business helps people, whether by providing a service people need or advancing a positive value or cause, lenders will respond. Remember that in the end, a lender’s decision isn’t about you, it’s about how the loan makes them — and their wallet — feel.

4. Promote your campaign among family, friends, colleagues and existing customers.

To gain the trust of strangers, first demonstrate the trust of your network. Encourage people who know you best and who have benefited from your business to become lenders in the early days of your loan. The concept of seed funding is critical across the crowdfunding world: Those who get funding in the early days are far more likely to successfully fund the project, while projects that flounder early usually fail. Remember — you’re not just asking for a favour, you’re giving those you know a chance to make a beneficial investment.

Apply for a business loan and drive your rate down »

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