Small Business Finance

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…)


06th Nov, 2018

Festive Preparation for Your Business

With the Bonfire smoke clearing and the sound of fireworks still ringing, in our ears many people now turn to Christmas preparation and celebrations. Whilst the upcoming festive season brings with it plenty of fun and reasons for celebrations, it is often a challenging time for business owners, particularly if planning hasn’t been done to ensure business continues as normal through this disruptive period.

We’ve put together a list of tips to help you ensure that you make the necessary arrangements to avoid disruption to service or unexpected issues during the festive period and to ensure that you set your business up for the best possible start to 2019!
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29th Oct, 2018

Changes to Our Auto Bidding Tool – BidPal

We’re excited to announce the most recent changes to our auto bidding tool, BidPal.For years lenders have used BidPal to help them manage their Rebs lending portfolio, helping them invest in a wide range of loans whilst saving them valuable time, and now we’ve improved it to make managing your lending account even easier and to allow you to make more tailored auto lending decisions.

What is BidPal?

BidPal is our automated lending tool, that auto applies bids on behalf of lenders as and when a new loan is listed that meets their pre-set lending criteria. This means lenders that have set up BidPal do not need to log in each time a new loan is listed to make a bid.

What’s New?

 

 

Inclusion and Exclusion Options

Previously the preferences available for lenders to set were limited to industry sector and risk rating. We’ve now extended the options available to lenders, allowing you to make more defined bidding preferences to suit your lending appetite.

You will now be able to choose to include or exclude certain regions that you do or do not want to lend to.

Bid or Buy

The new BidPal will also include an option to auto-buy loans on the Secondary Marketplace as well as bid on the Primary Marketplace. Lenders may choose to set one or the other or both auto-bidding options.

Where a lender chooses to buy micro loans from the Secondary Marketplace, they will be buying micro loans that other lenders are selling on. These are loans that have already been funded via the Primary Marketplace. When loan parts become available that match your buying preferences and where you have sufficient Available Balance, these micro loans will be automatically bought and added to your loan portfolio.

We’ve also introduced new rules that  allows users more flexibility over their BidPal criteria. Over time, we hope to further expand on the data options that a lender can set for their lending rules.

Currently lenders can configure the settings such as:

  • Whether you want to exclude / include loans where the loan is behind on repayments
  • Targeting the purchase of micro loans in a specific business
  • Whether you want to exclude / include loans being sold at certain premiums / discounts by other lenders
  • Choosing the risk ratings you want to buy or avoid.

The buy logic is triggered when a user sells their microloan(s), there is now a ‘clearing process’ to check if the microloan meets the buy requirements of another user and where it does, the purchase will occur instantly. This feature allows lenders to grow a diversified portfolio quickly while simultaneously bringing an increase in liquidity to the platform. When selling microloans, you may notice a message “1 of 1 microloans sold.” When you see this, another lender’s BidPal Buy function has purchased your microloan automatically.

 

 

What BidPal Does Not Do…

BidPal does not guarantee that all your funds will always be lent out, that you will never encounter a default or that your account will deliver a set interest rate.

Available funds are only lent out to a pre-set proportion of your lending portfolio, you can alter all this in the settings.

If your funds are auto bid on a loan, there is no guarantee that you will not be outbid, if you are outbid you will be alerted (according to your notification settings), and will be able to login and rebid should you choose.

Lending to businesses carries the risk of default. If a business fails to repay a loan you could lose all or part of your capital. Therefore you should carefully consider how best to mitigate these risks, consider perhaps divesting via the secondary market or reviewing the performance of the various loan risk ratings and reviewing your Bidpal settings regularly.

Whilst BidPal will auto bid at the highest rate available on a loan, it does not guarantee a set return on any single loan or on your portfolio.

Managing your Lending Portfolio

As a lender, lending to businesses, you should be aware of the risks involved in lending. Understanding the risks is the first step to building a strong loan investment portfolio through careful management.

Whilst BidPal reduces the need to log in as regularly to ensure that your funds are working for you, lenders should still ensure that they are monitoring their lending account to ensure that it is performing to their expectations and to regularly review their investment strategy depending on the performance of their investments.

Find out more about managing your lending portfolio on our platform by reading our helpful articles in the Lender Library.
For more information on BidPal please look at our FAQs or email support@rebuildingsociety.com.

02nd Oct, 2017

Presenting Platforms in Minsk

Following his visit to Lithuania and appearance at the 6th ECN Crowdfunding Conference, our founder and Managing Director, Daniel Rajkumar, will be speaking at the CrowdConference in Minsk.

Scheduled to take place on the 20th and 21st of this month in the Belarusian capital, the event is the third international conference of its kind. The aim of the two-day conference is to hold presentations and discussions related to various fields of financial technology, in order to identify and strengthen the potential of Belarus.

Daniel will be in the company of other speakers from around the world, including a Darden Graduate School of Business professor from the USA, the Application Director of Germany-based company BigChainDB, a member of the Department of Strategic Technologies Microsoft from Russia, and adopted Italian co-founder of revolutionary startup, ELSE Corp.

Daniel’s 30-minute presentation will offer advice on launching a P2P lending platform on a budget. He will offer advice regarding how to understand what you need, how to prepare for launch, and how to coordinate the launch of the company itself.

If you speak Russian and would like to find out more, please visit the CrowdConference website.


20th Apr, 2016

A New Net Return Formula That Works Harder For You

We’ve established a new, simple formula to calculate your annualised net returns. This new formula will provide a more accurate understanding of your returns while better accounting for elements of the loan repayment process that we can’t perfectly predict.

To calculate the annualised net return, we consider the return generated from the capital employed for each period. A period is defined as the number of days that pass in which the capital employed remains constant. The calculation of capital employed is taken from the sum of deposits less withdrawals. (i.e. funds added minus funds withdrawn) on a cumulative basis.

How will it work?

We aggregate NetGains as follows:

We then annualise the rate of return for each period in the series:

The more frequently you withdraw credit from the platform, the more periods you will have in your series. This addition to the formula improves the accuracy of how we track the capital employed. We also take a weighted average of the annualised rate of returns against the number of days so that longer periods of consistency weigh heavier in the formula than single days of unusually high losses or gains.

Why the change?

This new method has several advantages over the previous formula:

  • It is based on historic data
  • Defaults are discounted according to their probable loss
  • Idle (unemployed) capital on the platform contributes to a lower yield
  • The benefit of compounded returns is included

Until recently we had been using a simple formula to calculate an indicative net return shown on the lender dashboard. But, the new calculation is more accurate and therefore will be more useful to you!

For example, the new method better accounts for all your money invested by accounting for employed capital and not just live investments. And, the old method failed to account for the probable recovery of defaulted loans, which created a less positive summary than was realistic.

Many lenders have had an improved site experience since we began sharing the “Probable Recovery” analysis. However, we also hear your questions about why the ability to recover debt isn’t closer to 100 percent, for example when a loan has a second charge. While it is true that stronger security does improve the likelihood of recoverability, we rely on the expertise of our legal recoveries team to make informed adjustments to the probability. We would rather state a prudent recovery probability and adjust upwards as recovery is successful throughout the process.

Defaults become a bad debt only after bankruptcy proceedings or at the discretion of the recovery team. Bad debts represent a loss, but other types of defaults do not necessarily mean a loss.

What’s next for me?

It’s difficult to give a perfect net return calculation, but this updated method gives you a more accurate net return of capital employed with the platform.

In the future, as a further improvement to the lender dashboard, we plan to add 3 tabs that will allow you to filter your dashboard stats to see “All Time Stats” (as current), “Rolling 12 Months” and “Current Tax Year.” We will keep you posted about when this feature will be available!

On request, we can give you your aggregated return data for each period, for you to perform you own analysis, please allow us 2-3 weeks from request to prepare this for you.

Please direct any questions or suggestions to the customer support team at: support@rebuildingsociety.com

Feature image courtesy of Steve Jurvetson, Creative Commons


13th Apr, 2015

A breakthrough in the finance revolution

Seeds of opportunities for SMEs and investors have been sown: the House of Lords is leading the push for a European Capital Markets Union. Central to this will be the potential for better access to finance for SMEs, and more opportunities for investors.

(more…)


29th Dec, 2014

2015: a Groundbreaking Year for SME Funding

2014 has been a good year for the alternative finance industry. It has helped thousands of businesses access finance in a transparent way that connects them with hundreds of potential stakeholders. With the £2bn lent mark smashed back in the autumn, 2015 promises to be a year of greater choice and volume for SME finance and here are a few reasons why:

  • Election year should mean there is greater political pressure on lenders to prioritise business lending. It has always been a popular message, and while the Coalition can point to its record of supporting AltFi, Labour may have to promise more support to win votes.
  • Banks will be forced to refer customers to alternative lenders. The finer details of this are being worked out now, including the dominant referral website, but it will give SMEs useful signposting when looking for funding and raise the profile of online lenders.
  • More businesses are utilising cloud accounting. This allows lenders to plug in to their accounts and make a better judgement of the business’ ability to repay finance, making them more attractive to lenders. We wholeheartedly support this modern way of operating!
  • General awareness of alternative finance is only going to increase. The influx of ISA cash at some point in 2015 will lead to a new wave of media interest, while platforms are increasingly attracting venture capital investment which will manifest into more consumer marketing, predominantly on the TV, transport network and online. There will be no escaping AltFi in 2015…
  • The entrepreneurial spirit of alternative finance means new niches will be tapped. Where businesses might previously have been ruled out because of poor credit, a lack of track record or through operating in an undesirable sector, it is inevitable that some platforms will cater for this market with lenders happy to take on the risk in return for a higher yield.

It’s also a fantastic time to get a loan through rebuildingsociety’s ever-increasing lending community. Start your application now


17th Mar, 2014

Refinancing Success Story: LTT SME Ltd

Opportunities for international growth do not present themselves on a daily basis, so when Eden Akhavi, Managing Director of LTT SME Ltd was given the opportunity, not once, but twice to acquire premium assets in the USA and The Netherlands within the space of a couple of months, he turned to rebuildingsociety.com to finance the move with loans of £100,000 then £150,000.

Expanding into new markets and taking on debt is a change in approach to how the company was being run, Eden has to oversee a shift in culture, workload and personnel as a result of the move, but he is keen to retain the positive aspects of the business, including the low cost base as the company grows.

“Most of our datacentre operation is fully automated”, he says.

“But I expect over the course of the coming few months, these two expansions will spawn another 3-4 jobs per site. Part of our success has been automating everything possible so that we can keep our operating costs to a minimum.”

While the processes might have been automated, the customer service is anything but – something Eden is visibly proud of, but acknowledges the challenge ahead.

(more…)


12th Feb, 2014

The Times 08.02.14 – SMEs can use more lenders

rebuildingsociety.com’s research into personal credit card use by business owners was featured in The Times on Saturday 8th February. Read our full press release

 

 


07th Nov, 2013

Business bank launch: Our reaction

As Vince Cable’s long-awaited business bank makes its debut, pledging £45bn of funds to be lent to UK SMEs through two providers, he put the gap in funding down to several causes:

–          A decline in bank lending

–          Businesses outgrowing the support available from friends and family and struggling to win long term debt or equity finance

The second point is interesting because it implies a lack of people with a vested interest in supporting the business.

This is where a crowd of individual lenders can certainly help.

(more…)


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