Peer-to-Business Lending

on the rebuildingsociety.com blog

03rd Dec, 2018

Scale Up Programme to Accelerate Growth of rebuildingsociety.com

Rebuildingsociety.com is proud to have been selected to be part of the 2019 Barclays Scale Up programme, run by Barclays in collaboration with Cambridge Judge Business School. The innovative programme aims to enhance the performance and competitiveness of high-potential businesses with growth appetite as well as growth potential that are deemed to be engines of growth in the UK. (more…)


26th Nov, 2018

Advice to Borrowers – From a Lender

Tips for Raising P2P Finance

Brian Johnson has been a regular lender on rebuildingsociety.com since 2014, supporting many UK SMEs in their growth aspirations along the way. Brian also has many years’ experience of managing and running his own businesses, so understands the difficulties businesses encounter in raising finance and has seen how businesses can use P2P finance to their advantage and how rebuildingsociety.com facilitates more than just a business loan.

We met up with Brian to find out what tips he would give businesses who are looking to get a business loan through rebuildingsociety.com.
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15th Oct, 2018

Investing money selectively is one of the best ways to invest

Many people don’t trust themselves to invest (or lend) so they leave it to others. Independent Financial Advisers can be helpful with advising on a range of customers about their options, relevant to their circumstances.

We believe, that with little study and research, anyone can learn the basic investment skills, to understand risk and reward. One of the things our lenders love is receiving interest payments each month. Many investments don’t pay interest monthly, but the borrowers using our platform repay their loan on a Direct Debit. So as you collect this repayment onto your online balance, you can re-lend them to other businesses. This is known as compounding. (Where you can earn interest on previous interest earnings).

Many other platforms will encourage you to be passive about investing, offering little information about the businesses. They sell their service on ease, but they also tend to pay out less. By making a little effort, you can earn considerably more. We’ll show you how, but before we do, have a look at the evidence.

Here is a histogram of Net Returns for lenders as at October 12th 2018. (a live version is on our stats page, under the Net Returns tab)

Net Returns histogram for rebuildingsociety.com

From this chart, you can see the green line peaks from the 3-4% segment and continues to be high until the 9-10% segment. This shows how most lenders are earning between 3% and 10%, but notice how 85 lenders are earning over 20% (on the far right). This article explains how they do it, so you can learn from their investment strategies.

Invest your money the savvy way

Read our 10 tips on peer to peer lending – This article covers some key guidance on strategies that have proven to work.

Understanding how your portfolio matures is important. With any platform, there’s a honeymoon period for newbies, but there’s also a hard phase around year’s 2-4 where you have sustained your first defaults but not had any recoveries. In this article, Kylie writes about various phases in the journey to mature investing. It’s a good read.

Many happy returns

When you see a business with a unique idea or product, take a minute to consider who their target customers are. If you know anyone suitable, why not buy them a gift or simply make a referral. Word of mouth marketing is so powerful. Sometimes a new customer can make the difference to a business surviving. This is especially true of seasonal businesses, where they may be vulnerable out of season. Like the facebook page, follow them on Twitter, share the videos, be an ambassador for your borrowers, they will love you for it.

Getting good at investing is addictive

Did you know one of our top lenders retired early to invest full time on our platform? Gross earnings are shown below, (from a peak capital employed of: £624,000). Being smart about peer-to-business lending allowed them to earn more in interest than most people’s salary!

  • 2013 – (the first year was a part-year) – £23,945.89
  • 2014 – £99,259.85
  • 2015 – £84,114.08
  • 2016 – £106,923.64
  • 2017 – £119,534.66
  • 2018 – £75,884.59 (part year until the 12th October)

It has not all been rosy, over the six years this lender has also had a £105,562.93 loss from bad and doubtful debt. So their profit is £509,662.71 – £105,562.93 = £404,099.78 before fees and taxes.

This lender has an average weighted Net Return of 12.74%, by being diligent about lending decisions, they can support a great standard of living from a few hours work each day.

Notice also how 33 lenders (on the far left) have a Net Return of < -20%. It is possible to lose money if you are not careful. Investing for higher returns carries some risks. For example, lending to inexperienced business people, a business you don’t understand, offering little security on the loan, is not a good idea. Notice that the red line (lenders who invest over £5,000) and the blue line (lenders with more than 10 loans).

Understand the Risks

The above figures are taken from actual lenders from rebuildingsociety.com during various stages of their investment history with the platform. Remember that past returns are not indicative of future returns and your own experience may vary.

If you are unfamiliar with the risks of peer-to-peer lending, read more here.

Overall, our past performance has been good for most lenders, but that could change. For example in an economic downturn, not all businesses will survive.

The best way to learn is by doing, open an account today to get started, you can try lending from as little as £10 on each loan.

To learn more about lending visit our Lender Library.


31st Jul, 2018

Transparency Matters

Peer-to business lending started out with the ambition to be better than the banks, by being more open and transparent, more ethical, more dynamic and better for businesses and lenders alike. Since the early days of the industry, we’ve seen platforms come and go and there have been many changes to the way in which platforms operate.

Many platforms started off as marketplace lenders, arguably the most transparent of the P2P models, but over time many platforms have changed their models, today few platforms still offer real marketplace lending, and even fewer offer the level of transparency on which the industry built its foundations.

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27th Sep, 2017

Daniel Rajkumar to Speak at Crowdfunding Convention

rebuildingsociety.com founder and Managing Director, Daniel Rajkumar, will speak at next month’s 6th ECN Crowdfunding Convention in Lithuania. The event, which will focus on New Technologies for Accessing Finance, is scheduled to take place at the Sapiegos Tech Park in Vilnius on the 19th and 20th October.

Dan-RajkumarDaniel will talk about launching a P2P lending platform on a budget, citing his experience when he founded rebuildingsociety.com. He will be explaining some of the challenges a business can face, commenting on technical considerations and advising on how to devise and implement marketing strategies while on a budget. “I’m very much looking forward to the event, it will be my first trip to Lithuania and I’m always keen to connect with my ECN friends and find out about their successes and challenges,” Daniel commented. “Conventions like this are a great way of speaking to other industry players, hearing from experts and meeting likeminded professionals,” he continued.

The European Crowdfunding Network was founded in 2011 with the aim of creating a professional network that would work towards promoting adequate transparency, regulation and governance. Incorporated as an international not-for-profit organisation in 2013, the network facilitates a combined voice in policy discussion and public opinion building.

Find out more about the event on the official ECN Crowdfunding Convention website.


10th Mar, 2016

Crowdfunding and P2P are Booming in the UK, Nesta Report Confirms

Alternative finance claimed 12 percent of small business lending in 2015, a sizable share of a rapidly changing market.

That’s according to a report titled ‘Pushing Boundaries’ by Nesta in collaboration with the University of Cambridge. This report is part of an annual series from the institutions that analyzes the alternative finance industry, including P2P lending and crowdfunding. Another key takeaway is that the sector grew 84 percent in 2015 and facilited £3.2 billion in loans, investments and donations — nearly doubling over 2014. More than 1 million people invested via online platforms in 2015, and 254,721 individuals, projects, not-for- profits and businesses raised finance via online alternative finance models.

And that rapid growth seems poised to continue, especially as banks and other financial institutions get in on the action. Institutions are increasing their stake in alternative finance, as Nesta’s report demonstrates.

And, institutional investors are taking the online marketplace more seriously. About 45 percent of all platforms reported institutional involvement. Donation-based and equity-based crowdfunding grew exponentially in 2015.

Of the total market, peer-to-peer business lending comprises £1.49 billion, almost doubling the amount lent in 2014. £881 million of that is in non-real estate lending projects, like rebuildingsociety.com. The peer-to-peer business market experienced an increase in automated lending and in secured loans.

The report projects that the alternative finance sector will grow to more than £5 billion in 2016.

“With increasing public and business awareness and the introduction of the Innovative Finance ISA, opportunities are abundant for the alternative finance industry in 2016 as well as challenges. From the peer-to-peer lending side, the challenges for 2016 are likely to be deal origination, credit risk modelling and underwriting. For equity-based crowdfunding, the challenges are not too dissimilar. The focus is likely to be on deal flow, due diligence and dealing with business failures as much as successes.”

Nesta’s report concisely demonstrates the sharp growth of various sectors of the alternative finance sector. As these industries continue to grow, we’re thankful for institutions like Nesta that keep tabs on industry growth and trends so we can make the rebuildingsociety community even better.


23rd Jun, 2015

Peer To Peer Lenders Need Not Fear “Shadow Banking” Risks

Attempts by some in the banking world to associate peer to peer lending with “shadow banking” simply don’t pass muster.

Shadow banking typically refers to hedge fund, private equity and other activities of the type that the International Monetary Fund says contributed to the economic crisis that began in 2007. As bank leaders try to paint peer to peer lending with that same brush, leaders in the P2P industry like Zopa founder Giles Andrew have been quick to distance themselves from shadow banking as a label and approach to finance.

“When Zopa became the first P2P platform to launch in 2005, we knew that persuading consumers to trust us with their cash was crucial to our business. This meant being a transparent and responsible lender from the start, extending credit to “super-prime” borrowers and building a risk function robust enough to withstand the seismic economic shocks that came along a few years late,” Andrew stated. “The activities of the P2P lender that I helped set up, Zopa, are as far from shadowy as the most diligent regulator could hope for. A founding principle of P2P lending is to ensure that platforms are open and transparent about lending.”

Likewise, rebuildingsociety.com endeavours to uphold the highest standards of financial integrity, user trust and transparency.

“It’s great that people are beginning to think of the peer to peer industry as trustworthy enough to be considered an alternative to the banks, but the differences between the two models are noteworthy,” said Adam Knott, rebuildingsociety.com’s Digital Marketing Manager. “rebuildingsociety.com will always strive to offer a fair and transparent service and a genuine choice for investors and borrowers alike.”

As the banking model is challenged by alternatives, it may continue to vilify those it views as competitors. However, good peer to peer lenders will continue to pursue a promising financial model with a spirit of fairness and honesty.


12th Feb, 2015

Five reasons for getting a business loan through rebuildingsociety

We know we’re new. We’re also in a new industry and things are done a little differently to other finance providers.

Nick Newton and Rick Hyland are on hand to guide you through the process

But we still believe we’ve got a great product that is suitable for businesses of all sizes, sectors and locations across the UK. Here are some of our best features:

1. We’ll listen to you and guide you through the application process. Our business development team (Rick Hyland and Nick Newton) will be on hand to take your calls and emails to keep you posted on progress, while our underwriting and legal team will work hard to get you through the loan preparation and completion stage with minimal fuss. After all, you’ve got a business to run.

2. We’ll be realistic about your progress. If we don’t think we can help you this time round, we’ll tell you ASAP. But we’ll try to point you to places that can help as that’s part of our ethos of building lasting relationships. When we can help you in the future, it would be great to do so.

3. We’ll tell your story. When you’re looking to tell potential investors about your company history to help them gauge whether to lend to you, we’re on hand to write features about the business to get your character across. Similarly, when it finishes and you’ve got a good news story about securing a loan for growth, we’ll help you write that and distribute it.

(more…)


28th Jan, 2015

Business Confidence at a Three-Year High – Now is the Time to Capitalise

As the first month of 2015 draws to a close, UK businesses are increasingly optimistic about the year ahead. A handful of surveys have pointed towards confidence in the British economy stemming from improving labour markets and falling inflation, indicative of a positive economic outlook. Here’s a summary of why business owners should look favourably on 2015 and gear up for growth.

Increasing sales and profits

A poll by accountancy group Grant Thornton revealed the UK was one of the most optimistic economies in the final quarter of 2014, with 68 percent of executives admitting confidence for the coming year. A survey of 1,500 businesses by Lloyds Banking Group reported that 43 percent of companies expect an increase in sales, orders and profits in the first half of 2015. Confidence has been reinforced by news that the UK’s economy grew by 2.6 percent in 2014, the fastest pace since 2007.  (more…)


05th Jan, 2015

Our Highlights – 2014

2014 was a big year for rebuildingsociety and the markets we operate in – here are a few of our highlights!

January – Our first Roadshow event in Leeds. 150 friends, members, future members, advisers and fellow alternative finance entrepreneurs joined us for a day of insightful presentations, networking and raising awareness of this exciting new sector. We published recorded content from the day throughout the next months, including Viv Parry, owner of Exquisite Handmade Cakes on how rebuildingsociety’s lenders propelled her business forward.

(more…)


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