Peer to Business Lending
Alternative Finance Sector Report - October 2014 31
PEER TO BUSINESS LENDING
ALTERNATIVE FINANCE SECTOR REPORT
PUBLISHED
November 14
AUTHOR
Luke Jackson
Samantha Goins
On the back of the success of Funding
Circle a number of new platforms have
entered the P2B market and the UK is
by far the world leader in this space.
The table to the left includes some
basic information on 15 UK based P2B
platforms providing a snapshot of the
main players in the market, although
there are likely to be others in existence
which have not been captured.
With new platforms launching regularly
and demand for this market rapidly
growing there are likely to be a number
of further platform launches during 2014.
Other platforms that have raised
significant amounts for SMEs include
ThinCats, which has raised nearly
£70m and Assetz Capital with £51m
raised. Assetz Capital is a relatively
young platform with niche offerings,
with a large amount of success and
rapid growth in the number of loans
issued in a relatively short period of
time. LendInvest utilise institutional
money and Wellesley & Co. use their
own money to provide bridging finance
rather than longer-term SME loans.
FCA REGULATION
The FCA took over regulation of
consumer credit from the Office of Fair
Trading (OFT) on the 1st April 2014. They
class P2P and P2B lending as “loan-based
crowdfunding”. The FCA plans to review
the current regulatory framework in 2016
to identify whether further changes are
required.
The key rules introduced by the FCA for
P2P lending platforms include:
Information about the platform must
be clearly presented and easy to find so
customers know who they are dealing with
All communications must be presented
in a way that the intended customer will
understand
Platforms must not downplay risks or
warnings
Platforms must have resolution plans
in place that mean, in the event of the
platform collapsing, loan repayments
will continue to be collected so those
lending to firms do not lose out
Any comparison of a peer-to-peer
loan interest rate with a regular savings
account interest rate must be fair, clear
and not misleading
Any promotions (such as print,
broadcast or online advertising) must
be fair, clear and not misleading -
promotions that are not can be banned
by the FCA
Where firms do not provide access to
a secondary market, investors can cancel
without penalty and without reason
within 14 calendar days
A minimum prudential requirement:
either a percentage of loaned funds or a
fixed minimum of £50,000 – whichever is
higher (the fixed minimum will be £20,000
until April 2017 to allow platforms to
acclimatise to the new regime)
SOURCE:
Financial Conduct Authority
ASSETZ CAPITAL –
OVERVIEW
The Assetz Group was established
in 1999. It has established itself as a
source of investment products and
knowledge for all types of investors
with varying budgets.
The Assetz group of companies has
80,000 registered users with this
number increasing by 5,200 per month.
It has been ranked as the fastest
growing P2P platform in the UK and
is now the second largest in monthly
volumes behind Funding Circle.
Assetz Capital has raised £51m to date
(October ‘14) and aims to lend as much
as £100m by the end of 2014.
PRINCIPALS
STUART LAW
– Founder and Chief
Executive of Assetz Group
ANDREW HOLGATE
– Founder and
Director of Assetz Capital
DAVID PENSTON
– Founder and
Director of Assetz Capital
CHRIS MELLISH
- Founder and
Director of Assetz Capital
Loans available through the Assetz
Capital platform are to trading
businesses, property developers,
renewable energy projects and
buy-to-let mortgages. This includes
development loans, bridging loans and
refinancing of previous loans.
Loans available through the Assetz
Capital platform offer investors returns
ranging typically from 9% - 12% per
year.
All loans security is held in trust by
Assetz Capital Trust Company Limited.
This provides protection should
the Assetz Capital platform cease
to trade. The Trust is administered
and controlled by Grant Thornton
Trust Company Limited who acts as
Corporate Director. All client monies
that are not yet invested are held via a
designated client account under new
FCA rules.
