Peer-to-Peer Lending

on the rebuildingsociety.com blog

The latest news in peer to peer lending, direct lending and marketplace lending from experienced professionals.

24th Jun, 2019

What our lenders say about us…

Founded in 2012 we’re one of the longest standing P2P platforms in the UK. We’ve seen a lot of change in the industry, we’ve been through the painful journey of becoming regulated and have gone through a full cycle of our loan book.

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10th Jun, 2019

Consolidate Debt for Business Growth

Growing a business is hard work. As you grow, you’re likely to need to access various forms of funding from equity to trade finance to loans to credit cards. Business loans are a great way to finance your business whilst maintaining control of your business. However, over time many businesses find that they they’ve taken out numerous loans or finance options and ensuring that monthly repayments are made on time, to many different providers, can become time consuming and expensive. 

Debt consolidation is a good way to restructure or simplify your financial arrangements for your business. This will help you improve your cashflow and reduce costs. If your business has numerous loans with different banks, a number of credit cards and other monthly debts, you should consider consolidating these into one easy to understand, easy to manage finance arrangement.

 Why consolidate business debts?

The long and short of it is – it’ll save you time, money and probably a few grey hairs!

A single repayment

Many will become one. If you completely consolidate your debt, you’ll only need to worry about one repayment a month, to one provider at a single rate. You can then match the timing of the repayment to best suit the cashflow needs of your business.

Reduced costs

If you have different finance options with different providers, you’ll probably be paying administrative charges to each of them, overdraft fees to Barclays, credit card fees to Lloyds, the list goes on. You’re also more likely to be paying higher rates of interest thank you can get elsewhere.

If you’ve taken out short term loans to support cashflow at one point or another and haven’t repaid those quickly, you’ll be paying much higher rates than if you repaid it and replaced it with a longer-term lower rate of interest loan.

Choosing one finance provider and using them over an extended period of time will help you improve your credit score with the provider, likely resulting in lower rates on future borrowing.

Improve Cashflow

Longer term loans often have smaller, more manageable monthly repayments than short term loans at high rates. Reducing the monthly outgoings in your business, will help you grow other areas of your business.

Is a debt consolidation loan right for your business?

If you have managed to grow your business or improve your credit score since taking out the original debt, you may be able to get a larger loan, at a lower rate over a longer term.

Signs you might be ready to consolidate debt:

  • Your business has grown
  • Your personal credit score has improved
  • Your business credit score has improved

More reasons you might need a business loan.

What to consider?

Before choosing to consolidate your debts, you should make sure that it is definitely right for your business and your plans for the business.

Cashflow or cost?

Think about why you’re trying to consolidate the loan? Is it to improve monthly cashflow or cost of the finance?

Consolidation does not always mean cheaper finance. If you consolidate your debts into a single long term loan you might be reducing your monthly repayments, meaning more cash in the business, but the rates might be slightly higher, costing you more over all.

Fees

When taking out a consolidation loan you’re likely to be charged an arrangement fee at the start of the loan. Make sure that you’ve considered the cost of the fee and whether it is right for your business at the time.

Early redemption options

Always make sure that you’re aware about whether you’ll be allowed to repay the loan early, and whether you’ll be penalised for doing so.

Business Debt Consolidation at rebuildingsociety.com

We’ve worked with many businesses that have come to us to consolidate their existing debts. When you take a loan with rebuildingsociety.com we’ll work closely with you to ensure that he loan you’re considering is right for your business. At rebuildingsociety.com’s you can consolidate or refinance loans that you already have with us or consolidate debts you have elsewhere.

The Benefits of a consolidation loan with rebuildingsociety.com

  1. No early repayment charges
  2. 6-60 month loan terms to suit you
  3. Single arrangement fee – no monthly costs
  4. We’ll settle existing debts directly with other providers on your behalf

Regardless of the reason for your loan with us, you can be sure that we’ll always consider your business on its merits and work closely with you to ensure the finance is right for you and your business. You’ll speak to real people that understand business and finance.

How to prepare your business for a loan.

You can apply for a business consolidation loan on our platform in under 5 minutes. If you’d like to speak to one of our team first simply contact us on any of the below options.

Phone: 0333 303 0972

Email: apps@rebuildingsociety.com

It was a pleasure to work with the team as we felt they took a pro active approach to our request for funding rather than the current lending criteria by many of the banking institutions who operate via a tick box and computer system.
The dialogue between ourselves and the team at ReBS has always been convivial and the out comes were of a positive nature.
” – Gary – SME Business Owner

06th Jun, 2019

Rule changes for P2P platforms.

If you follow news on P2P lending you may be aware that over the last few years the Financial Conduct Authority (FCA) have been carrying out a review of the Peer-to-peer and crowdfunding (equity) sectors. Since publishing their first rules in 2014, the industry has seen significant growth and diversification, so the new rules are due for review.

On the 4th June 2019, the FCA published its feedback and changes to the rules, which will come into effect on the 9 December 2019. We responded to the consultation papers and have worked closely with industry bodies such as the UKCFA, to help shape and influence changes to the regulations.

The changes that the FCA have decided to implement are synergistic to the changes proposed in the consultation paper 2017/2018, most of which we agreed with and were already part of our processes. Consequently, users will notice relatively few changes.  Many of these changes focus on demanding higher levels of transparency and clearer communication, risk management and cross-platform standardisation of definitions in relation to defaults. We are pleased to learn that the FCA has adopted the definition we have used since our inception of “90 days past due”. Historically members of the P2PFA have been able to compare favourably, by having a more lenient default definition of “120 days past due”. So this makes it easier for users to compare platforms.

In the FCA’s consultation in 2018 it classified platforms into three categories based on their business model. Pricing, Conduit and Discretionary platforms. We are a conduit platform because we allow lenders to set an interest rate price. Many of the new rules are specifically aimed at pricing and discretionary platforms, mandating high standards on credit risk analysis models and reporting, as lenders have less control of their own investments on these platforms.

Model Features
Conduit Lenders pick the loans and the platform administers the loan, clearing of funds and security
Pricing
The platform sets the price, but the lender picks the underlying loans
Discretionary The platform sets the price and chooses the investor’s portfolio of loans to generate a target rate

What changes to expect

Investor categorisation

Lenders will need to be classified as either:

  • High net Worth investor; or
  • Sophisticated Investor; or
  • Self-certified sophisticated investor or
  • Restricted Investor

Restricted investors are unable to put more than 10% of your available investment assets into P2P lending platforms.

Lenders must also undertake an appropriateness test prior to being able to invest in any of the businesses on the platform. This mandated test will essentially quiz your knowledge and understanding of the platform and your understanding of our role.

Many of you have already completed a type of appropriateness test, so we are confident that the majority of our long-standing lenders will have no problem passing this once introduced.

The classification of investors wil have an impact on how and to whom platforms may market to and will change the structure and nature of many P2P promotions and adverts.

Find Out about how we handle defaults

Living Will (Platform Wind-down Arrangements)

It has long been a requirement that P2P platforms have a Living Will or wind-down arrangement in place to ensure an orderly wind-down of a platform’s loan book in the event that the platform ceases to trade. The necessity and importance of these arrangements is currently being tested with the current winding down of Lendy and Collateral.

Living wills must adequately set out the plans for a 3rd party to be able to successfully distribute lender funds from ongoing loan repayments and ensure that lender funds are maintained and kept according to the CASS (client money) rules.

As a fully authorised and regulated platform, we are frequently reviewing and updating our Living Will and also act as the back-up servicing company for our appointed representatives and have in the past successfully facilitated the winddown of an associated platform. Should we as a platform cease to trade we’re confident that our arrangements would ensure the protection of client money and the smooth winding down of the loan book.

Find out more about our Living Will.

What the new rules failed to cover (in our opinion)

Whilst many of the rules implemented by the regulator are welcomed, we believe that there is more to do. Lenders need to able to compare and contrast the performance of their investments across a variety of platforms.

Definition of Net Return

Whilst the definition of default may now be standardised, there is great diversity in the manner in which platforms calculate net returns and how these are reported to investors. Whilst each platform is required to set out for its investors how it goes about calculating net returns, lenders will still be unable to compare like for like net returns across platforms.

Find out how our net returns are calculated

Higher Standards of Transparency

Many of the new regulations have focused on strengthening the requirements of specifically of pricing platforms’ Risk Management and Credit Risk frameworks, implementing improved requirements on reporting and audit. However, lenders investing on some pricing, but mainly discretionary platforms will still be unable to identify who specifically they are lending.

Rather more concerning is a sentence in the FCAs feedback is what seems to be a reduction in standards for conduit platforms like ourselves. The regulators feedback states:

In cases where a platform decides not to price loans on behalf of investors (ie. operate a conduit-type business model) the platform will not be required to conduct a credit risk assessment of the borrower.

FCA Feedback to CP18/20

This could result in performance standards amongst conduit platforms plummeting. Lower standards of credit risk might result in higher defaults and increased risk to investors.

We will not be reducing our credit risk assessment standards and will not be reducing the amount of information or level of transparency our lenders have come to enjoy. Our credit risk team regularly review the loan book performance and manage the credit risk assessment applied to all loan applications according to its performance.

Furthermore, we will also continue to review ways in which information on lending opportunities is published, so as to inform lenders as much as practically possible, to make considered investment decisions for themselves, and price the risk appropriately.

Find out more about our views on transparency.

What’s Next?

As a platform we’re proud to have already implemented or made steps to implementing many of the changes mandated by the FCA.

Over the next few months we’ll be making a few minor changes to platform and your lending experience. If you haven’t already, we’ll ask you to complete an appropriateness test and lender classification.

If you have any questions about the new regulations, how they might affect you as a lender please feel free to get in touch with us, we’d be happy to hear from you and to answer your questions.

Get in Touch


18th Mar, 2019

Is a Peer to Business Loan an Alternative to a Bridging Loan?

Bridging Finance is a type of short-term, high-cost finance that is secured on assets such as property and is often used as a short-term solution with the intention of refinancing to an alternative lower-cost, long-term provider.

Typically, bridging loans are offered for periods of 1-18 months at 1.5% per month (18% pa).  Most bridging loan companies have expensive early repayment charges if you want to redeem the loan early.

This type of funding has become increasingly popular and there are many P2P lenders that focus on bridging loans.

Peer to Peer business loans vary in structure and rates depending on the platform, so we’ll look at a typical rebuildingsociety.com business loan.

Our loans are offered for periods of 6-60 months, at rates from 6% to 20% per annum (0.5%-1.6% per month). We offer secured and unsecured loans* and support a variety of British businesses. Unique (as far as we know) to rebuildingsociety.com however, is that we reward borrowers for backing their own loans with meaningful security.

Well secured loans benefit from interest rate discounts

Where a borrower offers good security in support of their loan, we will offer them a starting rate discount on their loan, the better the security the better the starting rate. Typically, a C rated business with no security would have a starting rate of 20% p.a however if they offered us strong security, they could benefit from a starting rate discount of up to 5%. An A+ rated business would usually have an unsecured rate of 10% but might, with good security benefit from a starting rate of just 6%p.a which is significantly cheaper than most bridging finance options. Find out More about our interest rate discounts here.

  Bridging Loan P2P Loan
Loan Term 1-18 months 6-60 months
Repayment Terms End of term Monthly Capital and Interest
Interest Rates 18% p.a 6-20% p.a
Early Redemption FeeYes No
Time to Raise Finance 5-14 days 7-20 days

What are the benefits of a rebuildingsociety.com business loan?

  1. There are no early repayment fees.
  2. We won’t call in the loan early
  3. You’re borrowing from a community of people that want to see you succeed.

Find out More

If you’d like to find out more about using rebuildingsociety.com as a cheaper bridging finance option, simply fill out our quick application process here and one of our team will give you a call or give us a call to discuss your options further.


13th Mar, 2019

An expansive approach from Afterthought

It’s always interesting to connect with business people with an eye for opportunity. A few words with Doug from Afterthought…

Hi Doug, how would you describe your approach to business?

My background is primarily IT consulting. I spent about 18 years working in the US with small stints in Hong Kong. My jobs allowed me to travel extensively and I think that helped with some of the input on our gin and coffee flavours and designs. I’m fairly hands-on, making sure that standards and values are followed and have built a great team of around 35 people across all of the businesses that continue to make Afterthought a success.

You seem to have quite a range of businesses, from technology consultancy to coffee shops… what’s the thinking behind this?

We started out as and IT consulting firm and decided to diversify into other businesses, we spotted a coffee shop for sale and it’s been expanding ever since!

The Gin Story … how did that begin?

As for the gin, I started drinking it about 7 years ago and settled on Bombay Sapphire and orange juice. About 2 years ago I toured their distillery and thought to myself I can make this and add some flair to it.

What’s the market like for Gin these days? Seems to me it’s quite experimental, I’ve seen Sheffield Gin in a local wine bar. Are you looking to provide direct to drinkers, or to bars as well?

We are aiming for about 80% export markets as there are already quite a few local gins in the UK. So far we have created and released 4 gins including American, European and London dry gins. 

Do you need a license to make Gin? What’s the score with the law?

So to get a license to make gin you have to have already made gin, kind of a catch 22.  Luckily for us we worked with a distillery in Devon to create our recipes and first batches in order to get our own licenses which were recently granted.

What other horizontals are you exploring for the future?

We are moving our smallest coffee shop site to a much larger building that will also house the front of our gin distillery, this allows us to host a gin retail section, a gin school and evening events. Next year we are adding a much larger European style cafe which will incorporate our gin, coffee and soon to be added pizza business in a new Burgess Hill revitalization project.

Thank you Doug, all the very best, a toast to your ongoing success.

View the borrowing application here.


01st Mar, 2019

Athena Catering Solution provided by Le Bureau Limited.

In industrial environment such as hospital and prisons, prisoners and patients need to be provided with nutritional meals. Prisoners need to be provided with five main options and sides and sweet options. Patients also need to be offered nutritional meal options.

Prior to presenting menu options to prisoners and patients, Athena our catering solution provides dietitians and catering staff with the ability to build model recipes and menus. Model recipes are defined in terms of their caloric, fats, proteins, vitamins, minerals, allergens, consumer acceptance, etc.  There are some forty elements that need to be considered in the analysis, including special menus to meet dietary conditions, vegetarians, vegans, allergen free, etc. 

Athena uniquely provides the facility to measure recipes and menus at the planning, preparation and serving stages.  

The issue that Athena addresses is that as ingredient suppliers and ingredients change, cooking methods change in recipes, athena provides an accurate measure as to how production recipes and menus meet model recipes. Hence alerting staff if the recipe and menus do not meet standards.

Athena can also determine at production level which recipe from a range of recipes meets the model recipes.  

Menus are presented to patients and prisoners with complete nutritional and allergen details so informed decisions can be met.

Meals in prisons are normally selected by prisoners two weeks in advance providing time for ordering and preparation. In a hospital same day selection, preparation and service occurs.

Athena uniquely provides several options for obtaining meal selections from prisoners and patients: paper and scan menus, tablet computers, smart phones (Bring Your Own Device), computers on wards.

Once the menu numbers have been collated:  meals are prepared, purchasing takes place, inventory pick and pack lists prepared, meal severed, receipting good in, etc. 

Athena provides a consolidated system that meets the needs of the whole catering process. From inventory control, recipe maintenance, menu planning, meals selection, meal preparation, serving meals, health and safety, cost control and purchasing. Athena provides a ful range of management reports and financial operational reports to monitor the catering operation.

The real beauty of the system is that it can be implemented in Schools, Colleges, Hospitals, Care Homes, Prisons, etc. it is a system which is highly functional, but can be adapted to any environment. The system architecture has been designed to meet individual client’s needs.  

The solution provided by Athena can also be extended to schools and colleges, home cares and chains of restaurants. Visit our lending application here:


26th Feb, 2019

Cashback Offer

The good weather this February has put us in a generous and giving mood.

We’re currently offering £200 cashback to any lender that lends more than £10,000 on any one loan on the primary marketplace. That works out to 2.0% extra on your investment!

The Small Print

The cashback will be paid out to eligible lenders on successful completion and draw down of the loan by the borrower.

The cashback will be credited to eligible lenders’ accounts.

This promotion is available on all bids placed before 30 April 2019.

This promotion is in addition to our ongoing lender incentives offered on each loan.

Existing Lender Incentives Include:

The above incentives are ongoing incentives that are paid out to eligible lenders on successful completion and draw down of the loan by the borrowing business. Cashback is paid directly to lender accounts as promotional credits.

Capital is At Risk. Investments not protected by the Financial Services Compensation Scheme. Find out more about the risks.


01st Feb, 2019

Sourced Becomes the Newest P2P Lending Platform on the Block

We’re proud to announce that Sourced* have recently been approved as our newest appointed representative launching their property-focused peer-to-peer lending platform exclusively for High Net Worth and Sophisticated Investors.

Sourced are managed by a team of highly experienced property investors and developers with extensive experience in finance and in P2P lending. Having previously operated as one of the largest property sourcing networks in the UK, as a registered member of the Property Redress Scheme, the team at Sourced are now broadening their business offerings by allowing HNW and Sophisticated investors to fund property development projects through their network of franchisees. Sourced have a strong focus on educating lenders on investing in property generally as well as lending and investing in property via their P2P platform.

Sourced Directors from the front: Stephen Moss, Paul Rose, Chris Kirkwood, Ryan Brown

Sourced will offer bridge-lending opportunities, secured on property and will typically offer loan terms of between 12 and 24 months.

We have worked closely with the team at Sourced over the last few months to ensure that they meet the regulatory standards required by the FCA to operate a P2P platform. We’re excited to be working with them and helping them along the way.

Daniel Rajkumar says “

“Our Appointed Representative solution gives platforms the opportunity to operate as authorised platforms, by working in collaboration with rebuildingsociety.com, an FCA-authorised company and Network Principal who takes responsibility for overseeing and monitoring compliance activity.”

Meet the Directors

Stephen is the founder of Sourced and its Managing Director. He is a serial entrepreneur having founded and successfully exited a number of other businesses, including the franchise business Legal for Landlords. He is a vastly experienced property investor, sourcer and developer having worked in the property industry for over 15 years.

Ryan is a co-founder of Sourced and its Finance Director. He is a member of the Institute of Chartered Accountants in England and Wales and an Approved Person with the FCA. He has worked for international businesses, including within the SAAS, FinTech and Property industries.

Paul is a co-founder of Sourced and its Property Director. He is a greatly experienced property professional having been an owner/manager of a sales and lettings business. He has operated in the property sector for over 10 years, building and managing a successful property portfolio.

Chris is the Training and Development Director at Sourced. He is a fully certified NLP trainer and has a wealth of property experience. He successfully founded, grew and exited a service business for 10 years and is a property mentor to a network of property professionals.

Only Sourced’s P2P Lending activity will be overseen by rebuildingsociety.com as their network principal.

Appointed Representative Offering

The full authorisation journey can take months or even years, the AR process is a shorter procedure which can be completed in under eight weeks.

We are taking this opportunity to establish ourselves as a reliable, experienced Network Principal and assist other platforms in getting to market, whilst maintaining our position as a P2B platform in our own right. Read more about the Appointed Representatives service we offer here.  

 

Find out more about Sourced by clicking on the logo below. 

 

* Sourced is a trading name of Jark-1 Limited.


28th Jan, 2019

Dashboard Changes – Lender Performance Charts

We’re making changes to the look and feel of the website. One of the areas that you’ve told us you want to see change, is the lender dashboard. You’ve told us that you would like a more visual representation of your investments and use of the platform. We’ve been listening and have started implementing some changes.

You may have noticed the recent addition of the ‘Net Worth’ Chart on your lender dashboard. This helps you quickly interpret your performance throughout your time on rebuildingsociety.com. Let’s review the new chart and see what it shows us…

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15th Jan, 2019

Reasons Why rebuildingsociety.com is the Best Place for Your IFISA

As we head towards the end of the tax year, think about where you have your ISA, what type of ISA products are available and whether there is another ISA provider that might be better for you.

The Innovative Finance ISA lets you use your tax-free ISA allowance in peer to peer (P2P) lending, as on rebuildingsociety.com.

Here’s a few reasons why we think that rebuildingsociety.com might be the best place for your IFISA.

Our Net Return

 

Lending on rebuildingsociety.com you can lend at rates of up to 20%. Our current platform average net return, with income reinvested is 8.6%*. This compares very favourably to other ISA products, such as the Cash ISA. However, you should remember that unlike a Cash ISA, your capital is at risk in an IFISA. Our historic performance is strong, but performance can vary with marco-economic conditions.

It’s Flexible – Access Your Funds

Each month you receive repayments from businesses, which may be withdrawn or reinvested. The availability of our secondary market means that you can access money from your IFISA by selling them on the secondary market, making our IFISA, a flexible ISA.

So do not need to worry about your funds being completely tied up and being inaccessible if you need them.

Provided there is a demand for the loan parts on the secondary market, you should be able divest from the loans. Withdrawing from your ISA part way through the tax year will not affect your ISA allowance, just credit the funds back to your IFISA account before the end of the Tax year to benefit from the tax wrapper. So you can dip in and out of your IF ISA.

Support UK Businesses

When you invest on rebuildingsociety.com you’re lending directly to real UK SMEs and in doing so you’re earning a healthy return.

UK Small and Medium businesses are the backbone of the UK economy. By lending to these businesses, that have been underserved by the banks, you’re directly contributing to the UK economy.

High Levels of Transparency

We pride ourselves of the level of transparency that we offer on our platform in comparison to many other Peer-to-peer lending platforms.

When you lend on rebuildingsociety.com you’ll always know exactly who it is you’re lending to. Not only this we’ll also help you understand the risks associated with lending to particular companies, helping you make the best lending decision for you.

Things to Consider

An IFISA may allow you to earn higher returns than many other ISA products, however, an IFISA involves making numerous small loans to UK Businesses. Therefore, there is a chance that some of the businesses you lend to might not be able to fully repay the loan, thereby putting your capital at risk, until it is recovered or lost. You should ensure that you understand the risk associated with the IFISA and peer-to-peer lending, to find out more, please read our risk page.

*The current platform average net return is the compounded annual return after bad debts and fees for lenders on the platform. Past returns may not be indicative of future returns.

To find out more about our IFISA please visit our IFISA Page,  read our Lender FAQs, or get in touch by emailing support@rebuildingsociety.com

Read more about Individual Savings Accounts (ISAs).  


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