LendingCrowd, one of the UK’s fastest-growing alternative finance lenders to the SME market, has partnered with the Scottish Investment Bank (SIB), the investment arm of Scottish Enterprise, in an initiative that will see £2.75 million invested in Scottish SMEs across the LendingCrowd platform.
It is expected that the move will stimulate loans of up to £35 million for SMEs while leveraging significant private sector investment.
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The agreement will allow SMEs to access loans of between £5,000 and £250,000 over terms ranging from 6 months to 5 years, with applicants applying directly to LendingCrowd who will then undertake the appropriate due diligence on each investment case and provide funding on commercial terms.
Stuart Lunn, CEO and co-founder of LendingCrowd, said: “Our groundbreaking agreement with Scottish Enterprise, one of the first initiatives of its kind in Europe, will help to fund the next stage of growth for some of Scotland’s most exciting SMEs. This recognises the increasing importance of peer-to-peer access to finance and, in practical terms, will allow a significant number of small to medium-sized businesses the chance to pursue their ambition to expand and compete in the UK and internationally.”
Kerry Sharp, head of the Scottish Investment Bank, said: “We recognise that many Scottish companies continue to struggle to raise the funding they need to grow and evidence points to substantial gaps in the supply and demand for finance within the Scottish market. Under our expanded remit, we are increasing the diversity of finance provision in Scotland and this new initiative with LendingCrowd is the first example of how we are opening up innovative sources of alternative funding to Scottish SMEs.”
Alternative and innovative new sources of funding have emerged over recent years in response to changing market dynamics. The UK Alternative Finance sector provided £3.2 billion worth of loans, investments and donations in 2015, up 84% compared to 2014.
Since launching in 2014, LendingCrowd, Scotland’s only headquartered peer-to-peer lender, has facilitated loans totalling over £7m and has over 2000 investors signed up to its platform. Deals range in size from £20,000 to over £1m, and in 2015 LendingCrowd helped Diet Chef complete one of the biggest ever peer-to-business deals seen in the UK in a £1.5m debt finance transaction.
Companies can expect a flexible approach from LendingCrowd, with decisions made quickly following the application process. SMEs can access loans of £5k to £250k and the duration of loans can be 6 months to 5 years. Companies will also have the flexibility of repaying loans early.
The Scottish Investment Bank (SIB) is the investment arm of Scotland’s main economic development agency, Scottish Enterprise, operating Scotland-wide in partnership with Highlands and Islands Enterprise.