Our weekly roundup of peer-to-peer news.
Numerous women comic artists have turned to the crowd instead of major publishers to produce their creative visions. As DC, Marvel and others launch and re-launch powerful women characters, the market is ripe for women to seek support for their work. For many successful projects, crowdfunding has been the answer.
“Crowdfunding the future: New regulation”s could dramatically change entrepreneurship in America,” World
The slow rollout of regulations related to crowdfunding in the United States may finally be speeding up, creating more room for companies and new ventures to use crowdfunding to launch businesses.
The “general solicitation” regulations, released last year, are already making a difference inside the venture capital industry, according to Bill Clark, the founder and president of Austin-based MicroVentures, one of the first crowdfunding sites. He called the new rules “very good for startups. They have allowed companies with customers and fan bases to communicate directly with them.”
Online commercial giant Amazon has begun a new program to help startups launch, market and distribute their products on the website.
“As the pace of innovation continues to increase within the startup community, we want to help customers discover these unique products and learn the inspiration behind them. We also know from talking to startups that bringing a new product to market successfully can be just as challenging as building it,” said Jim Adkins, Vice President, Amazon. “Amazon Launchpad gives customers access to a dedicated storefront featuring a variety of innovative new products from emerging brands. For startups, we handle inventory management, order fulfillment, customer service, and more, allowing them to focus their efforts on the innovation that results in more cool products.”
“Small Business Borrowing: Does Reputation Really Matter?,” Forbes
No matter where a small business owner lives, their reputation in the community can be a key factor to receiving financial support to create and expand their businesses. Leaders at Kiva Zip, a micro-finance organization that provides small business loans in the U.S., has found community trust to be a key indicator of a loan’s potential success. They apply the same frameworks to U.S. loans as Kiva has used in its global market for a decade.
“Orchard Provides Feedback on Recent US Treasury Interest in Marketplace Lending,” Crowdfund Insider
Crowdfund Insider interviewed Orchard CEO Matt Burton, who will be attending a panel hosted by the U.S. Treasury Department on August 5th as part of the department’s efforts to gather more information about microfinance, crowdfunding and peer-to-peer lending. He says:
“I think this is a great opportunity to show the Treasury how our industry operates within the existing regulatory framework, and educate them on the core principles of marketplace lending — the three T’s: technology, transparency, and trust. Regulatory agencies in other countries, such as the U.K., have actively embraced marketplace lending and created frameworks to facilitate its growth and adoption. More regulations could certainly hurt consumers if it limits their access to credit, but I think we’ll find a way to work together with increased transparency for all parties.”
29th Jul, 2015
rebuildingsociety.com is offering an interest-free business loan to one company this summer
Since we launched in 2012, we’ve helped over 120 businesses successfully obtain loans via our community of private investors. This summer, we’re offering one lucky business the chance to win a completely interest-free loan up to £25,000.
How will it work? All loan applications received by rebuildingsociety.com before August 31 will be eligible. The loan that completes with the lowest interest rate will have its interest payments for the first £25,000 of the loan covered by rebuildingsociety.com — lenders will still receive their interest at the rate offered.
Borrowers that extend their loan periods are not eligible, and loans must be fully finalised by October 31st (the draw date) to qualify.
We’ve run this offer before with great success. In April 2014, Hippoprint.co.uk won an interest-free loan to be used for a guerilla marketing campaign.
Hippoprint co-owner Anthony Wood said: “Our new lenders include family and friends and other people who have had the opportunity to contact us directly with their questions. People are taking control of their finances more than ever and peer to business lending platforms are allowing them to make logical, ethical and moral decisions about how their money is invested.”
Apply today to be in with a chance
If you’re in the market for a loan for your limited company, LLP or PLC, there has never been a better time to turn to rebuildingsociety.com to make your financial goals a reality. More than 90 percent of the loans listed in our marketplace achieve their goals, and most do so in just 4-6 weeks.
To discuss a potential application with us please call our team on 0113 8150 244 or email us at firstname.lastname@example.org
28th Jul, 2015
In its work providing apprenticeship training for people interested in health and social care professions, Pursuit Training aims to raise standards of care by providing the best education possible.
The apprenticeship market continues to grow — the government just committed to support another 3 million apprentices through contracts like those at Pursuit Training. And Pursuit’s commitment to positive values informs every aspect of their work. With a loan through rebuildingsociety.com, Pursuit Training hopes to refinance two loans that are slowing the business’s growth because of their high interest rates.
A Secure Opportunity
Because Pursuit receives both funding and extensive auditing from government organizations, its directors are confident that it is a well-vetted and secure opportunity. And their finances are in good shape.
“We currently hold yearly rolling contracts, with 2 direct contracting organisations, and one held directly that total over £2 million and have the opportunity to increase these depending on our ability to deliver increased volumes,” explains Managing Director Steve Horler. “All of our work in 2015 will secure income for 2016 as income is secured for 12-18 months at a time.”
In addition to government contracts, Pursuit has commercial revenue streams from its large customer base together with contracts held with national organisations and a direct Advanced Learning Loan contract.”
And, Pursuit can offer security by the way of a commercial property or directors guarantee. Pursuit is offering a second charge to support the loan.
A Growing Industry
The government continues to invest heavily in the apprenticeship sector, and Pursuit sees strong opportunities for growth in the next two years.
“It is well publicised that this is one government department that will go against the grain and be increased rather than cut as part of the upcoming spending review,” Horler said. “The Advanced Learning Loan contract allocation is currently both under-allocated against government budget and underspent by those with a contract meaning massive headroom for growth of these contracts.”
Our lenders are excited about this application — it has been more than 95 percent funded in under a week. It has 7 days left in the marketplace for bids to be placed, so head over to find out more about this opportunity.
24th Jul, 2015
“Minimum requirements for the UK trustmark will be set by a team from the Skoll Centre for Social Entrepreneurship at Oxford university’s Said Business School, working in partnership with the recently created trade body Sharing Economy UK,” the FT reports. Business secretary Sajid Javid backs the move, noting his commitment to making the UK a friendly place for a robust crowdfunding economy. The trustmark would aim to give users of services like taxi-alternative Uber and crowdfunding and peer-to-peer sites more confidence in which services to choose.
In a Q&A, Jessica Jackley sounds off on Kiva’s success, the future of microfinance and her new book. Of the industry’s future, she says: “As it is with many things these days, it will be more mobile and lighter weight. There will be different ways of categorizing and weighting reputation, not just in terms of credit scoring.”
The Smithsonian, the United States’ premier historical and preservation organization, has turned to Kickstarter to fund the restoration and display of the spacesuit Neil Armstrong wore on the moon. The institution has funding to preserve the suit, but hopes to raise $500,000 to prepare the suit for display during the moonwalk’s 50th anniversary in 2019. It’s the first of several planned collaborations with Kickstarter, museum officials stated.
“Crowdfunding as a vehicle for protest,” Los Angeles Times
Individuals supporting both liberal and conservative causes and individuals have turned to crowdfunding to show their support, in addition to or even instead of other forms of protest and solidarity. The Times sites several high profile examples of campaigns, successful and not, to use crowdfunding to support anti-gay businesses and police officers accused (and in some cases convicted) of racist violence.
20th Jul, 2015
Welcome to P2P Weekly, our weekly roundup of news in the peer to peer, crowdfunding and financial world that you simply can’t miss.
The eight largest peer-to-peer lenders in the UK made £507.4m worth of loans in the second quarter of this year, breaking records once again for total lending in the sector.
“We have passed yet another milestone with our members facilitating over half a billion pounds of new loans in the last three months – at this rate we may hit £4bn by the New Year,” said Christine Farnish, chair of the Peer2Peer Finance Association. “Strong growth continues across all parts of the market, reflecting the increasing trust that both lending consumers and borrowers have in peer-to-peer platforms.”
“China Crackdown on Margin Lending Hits Peer-to-Peer Lenders,” Wall Street Journal
New pressures from the Chinese government may be squeezing the rapidly growing peer to peer market in the country. Citing a new directive from the China Securities Regulatory Commission cautioning against illegal trading, three leading peer to peer companies have said they will no longer facilitate loans that use stocks as collateral.
The heightened scrutiny is part of a broader effort by the Chinese government to stabilize markets. The Chinese P2P market reached 300 billion yuan (£31 billion) in settled loans in 2014, a substantial increase over the previous year.
“Even more on debt and democracy,” The Economist
“In other words, the debt is owed to the taxpayers of other nations, most of which are democracies. So any write-off of Greek debt can be represented as a loss to voters in other countries. One can argue, of course, that such losses would be notional; experience suggests, for example, that central banks can manage quite well with a hole in their balance sheet. But that is not how such schemes have been sold to voters. German voters were told that the creation of the euro would not involve bail-outs of other countries; that explains why the country’s leaders are so reluctant to let Greece off the hook.”
“Welcome to ‘the biggest change in banking for 400 years’,” Newsweek
A new piece from Newsweek has summarized the substantial benefits of peer to peer lending, calling it a refuge for investors who “like the idea of being on the right side of regulatory and technological upheaval.” Writes Ryan Ross: “P2P lending offers huge opportunities, mainly at the expense of banks, whose biggest margins are traditionally in unsecured lending. Herein is the layer of fat P2P platforms are guzzling, picking off the banks’ best customers. P2P platforms have also proved superior at harvesting and managing big data, and have lower cost bases than banks.”
The United States Treasury Department has begun a public inquiry of the peer to peer industry in the country. The department seeks public comments to learn more about how the industry works and different types of financial activity happening within it.
“By soliciting public comments on this relatively new industry, we hope to better understand the potential for online technology to expand access to safe and affordable credit for consumers and small businesses,” Antonio Weiss, counselor to the Treasury Secretary, said in a statement.
15th Jul, 2015
In the midst of ongoing debate about the new budget announced last week, peer to peer lenders and borrowers can take comfort in a new program that will boost security and reliability in the industry.
Starting April 6 2016, the government will operate the Innovative Finance ISA, which extends ISA eligibility to peer to peer loans. The chancellor’s office is also investigating whether to add crowdfunded debt securities and equities to the list of eligible transactions. For rebuildingsociety.com and other peer to peer lending operations, this is welcome news.
“The announcement to launch the Innovative Finance ISA is major step forwards for savers looking to earn a passive income from their interest earnings,” said rebuildingsociety.com Managing Director Daniel Rajkumar. “Without the volatility of share prices and with continuously compounding yields, the Innovative Finance ISA has the potential to outperform others, where traditional financial institutions have creamed the margins for too long.”
Leaders of other platforms have also been outspoken in their support of the move.
“The Chancellor seems determined to unblock finance, allow innovation to flourish and crucially give savers and investors more control over their money. I see the Innovative Finance ISA as part of that new spirit,” said RateSetter CEO Rhydian Lewis. “It will be an immediate boost for hundreds of thousands of everyday investors and has the potential to move the dial on the availability of small business and personal finance in this country.”
The addition of the Innovative Finance ISA is just one small piece of a complicated budget plan that has seen some debate as to its likely impacts. We’ll have our eyes on whether other crowdfunding and peer to peer transactions become eligible for ISAs, and look forward to the launch of the Innovative Finance ISA next year.
09th Jul, 2015
The threat to traditional banking is growing.
From PayPal to peer to peer lending, methods of money management outside of traditional banks have boomed in the last few years. While evidence that they’re creating competition that threatens banks’ foothold in the economic market is still growing, they are expanding options and forcing banks to think smarter as customers begin exploring new ways of storing, transmitting and growing their money.
And peer to peer lending and other programs certainly have banks’ attention. In recent comments, the CEO of the Canadian Imperial Bank of Commerce confirmed that banks will have to adjust to new competition from peer to peer and other markets. Victor Dodig said the bank is looking for ways to leverage interest in Bitcoin and other new technologies to its benefit.
““We can play in that space,” Dodig says. “Will clients move in droves to these new technology platforms to do their lending? I don’t think so.” But, he adds, “Competition always changes the dynamic on pricing. Will there be pressure over time? Of course there will be.”
Other platforms, like Apple Pay and Google Wallet, have facilitated millions of transactions around the world. Executives from Accenture noted that “As banks recover from the downturn, non-banks are taking advantage by proceeding aggressively with digital innovations and capturing more and more of the banking value chain. Accenture estimates that competition from non-banks could erode one-third of traditional bank revenues by 2020.”
Digital wallet services from Google, Apple, Samsung and more have become part of people’s daily payment processes. Each has slightly different offerings in terms of security, ease of use, and compatibility with different devices, digital apps and services. Google continues to tweak Wallet, since it hasn’t been as successful as originally predicted. Of course, many such services integrate directly with bank accounts and existing credit cards, functioning more as an intermediary than an entirely new money management method.
Dodig argues that one deterrent for new financial systems like peer to peer is ongoing uncertainty about security and financial regulations: “Clients that have money with an institution want to make sure that it’s stable and secure, because (deposit) insurance only gives you protection to a certain level,” said Dodig.
However, over time, regulations are becoming clearer and alternative financial models are demonstrating their success and security. rebuildingsociety’s Digital Marketing Manager, Adam Knott, said: “Banks are keeping a keen eye on institutions like rebuildingsociety.com, because they realize the potential for disruption and competition as more individuals and organizations reduce their reliance on traditional banking.”
08th Jul, 2015
Construction Project Management business is requesting to borrow £100,000 over 60 months.
If people invest in Provision UK Limited, “[the] hope is that they will know they are making a tangible difference that will impact many people for the better,” explains Nigel Williams, a consultant to the company.
ProVision’s team of four directors and 30 staff provides construction project management to churches and charitable organizations. The business is entirely driven by referrals from satisfied customers who have seen ProVision successfully help push their project to completion. With rebuildingsociety lenders’ help, ProVision aim to increase their working capital and pay off credit card debt in hopes that the loan repayment will be a lower monthly burden. Without the loan, the company’s growth may slow, Williams said.
A Unique Model
ProVision uses their “traffic light model” to mitigate risk and ensure project success. The detailed process brings forward some elements of work in the project that will flag any significant concerns which would affect its progress. These elements include land boundaries, title deed issues, restrictive covenants, legal and governance concerns and financial limitations.
“All embers of the management Team have over 20 years experience each in this market – either as church members, leaders, trustees or assistance with building projects/design,” Williams said. “This understanding of the challenges facing many church and community leaders/trustees who have little experience on bringing a project to a place of reality has been invaluable.”
Because ProVision works with charities and churches, its work advances the support and development a community needs to thrive. That has been attractive to investors in the past, Williams says.
“The Directors and staff believe in what they are doing and have a heart to impact all areas of society for good, regardless of background, faith, gender, and so on. They also believe by working with clients, that the benefits and additional profits that projects may generate means the funds can stay within the client’s control and therefore within their local communities.”
The loan’s risk is mitigated in part because the directors have primarily invested their own money into the project so there is no other bank debt, Williams says. The auction has so far met 40 percent of its £100,000 goal and just received a two-week extension.
You can read ProVision’s loan profile here.
02nd Jul, 2015
Fitness Equipment Hire is making waves in the Commercial Fitness and Leisure industry, logging strong performance since its founding in 2012.
Owner Debra Cooper has 15 years of experience the industry, which she brings with her to create a strong young business that supplies fitness equipment to sports teams and fitness centres throughout the UK and Ireland. She and her team hope to expand the company’s desirability by adding customisation of equipment to their portfolio of services. With this loan, they plan to purchase and customise equipment to supply an existing client’s 50-plus locations on hire
“We found there was definitely a gap in the market, particularly in budget facilities to allow them to have good equipment, with a manageable monthly outgoing,” says Esther Hughes, finance manager for the company. “Customisation is an added extra that really does create a polished look to a commercial facility.”
Fitness Equipment Hire has taken measures to reduce risk to lenders in this venture. Although the 50 sites are under one brand, they are essentially franchised sites, creating negligible risk of an overall failure of the venture, Hughes explains. And, the director of each site will sign a guarantee over the debt. In addition, there are 25 clients unconnected to that brand participating in the hire program, which began in April.
“Aside from the hire section of the business, our commercial sales division is still going strong and as you can see from our previous accounts and managements the net profit is strong,” she added. “I do not anticipate any reduction to commercial sales.”
The plan provides some long-term security for the company, as it will create a steady source of income for the business because the equipment will be hired out to the gyms.
“At the end of the term of rental, the cycles go back out on rent and have an income attached to them with no connected outgoing. To have set flow of income for several years into the future is something that is very rare.”
It’s a sensible plan for a company with a strong track record in the fitness and leisure industry and solid financial records.
You can see Fitness Equipment Hire’s profile here.
25th Jun, 2015
Onwards and upwards.
rebuildingsociety.com will be occupying new Leeds City Centre offices from the beginning of July in a move that will see our operations, technology and management team take up space in Cloth Hall Court and the Innovation Hub, both in close proximity to Leeds Rail Station.
We’re leaving our Queen Square office behind after 4 and a half years, but our new location will allow us to continue to play a large and ever-growing role in the local business landscape, as well as providing all the necessary facilities for rebuildingsociety.com to position itself at the forefront of innovation in the UK peer-to-business lending scene.
The platform will continue to function as normal while we settle into our new surroundings, although we may be a little slower than usual in responding to emails between June 26th and June 29th – so please bear with us!