New loan opportunity : Streetskins Limited

We’re pleased to announce that two new loans are now live on the FundingKnight crowdlending auction site, offering the chance to lend to Streetskins Limited. You’ll find full details of the loans and all the usual financial information available on our website, but to wet your appetite, here’s a quick summary:

Loan opportunity:

Streetskins Limited is an outdoor media company that places advertising on the shutters of high street shops and premises. Due to a new contract win the business needs funding to assist in the implementation of new advertising sites.

We also have existing auctions running for Red Advertising Limited and Lextan Limited and other auctions will launch imminently.

You can find more details by logging on to www.fundingknight.com and choosing Find a Loan.

Add funds to your account:

You may only place a bid out of available funds in your FundingKnight account. If you need to transfer funds to your account, click here to do this now and go to Add Funds in your My Money account. Remember you can invest as little as £25.

Bid now:

Once funds are added please go to Find a Loan for further details on the business opportunity and to make a bid.

And now you can ask questions:

As part of our continued improvements to the FundingKnight website functionality and user experience we are launching Q&A facility to enable lenders to submit questions to borrowers.  Questions will be sent directly to the borrower.  This facility will help lenders gain the additional information required when making a decision on whether to bid on a loan.

New loan opportunity : Lextan Limited

We’re pleased to announce that a new loan is now live on the FundingKnight crowdlending auction site, offering the chance to lend to Lextan Limited.You’ll find full details of the loans and all the usual financial information available on our website, but to wet your appetite, here’s a quick summary:

Loan opportunity:

Lextan Ltd provides professional tanning, fitness and health and beauty products across its six salons in South Wales, the business intends on increasing its salon network and has identified a number of location for expansion.

It needs the funds to expand its salon network across South Wales.

We also have an existing auction running for Red Advertising Limited and another auction will launch imminently.

You can find more details by logging on to www.fundingknight.comand choosing Find a Loan.

Add funds to your account:

You may only place a bid out of available funds in your FundingKnight account. If you need to transfer funds to your account, click here to do this now and go to Add Funds in your My Money account. Remember you can invest as little as £25.

Bid now:

Once funds are added please go to Find a Loan for further details on the business opportunity and to make a bid.

And now you can ask questions:

As part of our continued improvements to the FundingKnight website functionality and user experience we are launching Q&A facility to enable lenders to submit questions to borrowers.  Questions will be sent directly to the borrower.  This facility will help lenders gain the additional information required when making a decision on whether to bid on a loan.

New loan opportunity: Red Advertising Limited

red advertising logoWe’re pleased to announce that a new loan is now live on the FundingKnight crowdlending auction site, offering the chance to lend to Red Advertising Ltd.You’ll find full details of the loans and all the usual financial information available on our website, but to whet your appetite, here’s a quick summary:

Loan opportunity:

Red Advertising Ltd provides cloud based recruitment advertising and candidate management software for recruitment agencies and employers throughout the UK.

It needs the funds to expand its call centre in Cannock.

You can find more details by logging on to www.fundingknight.com and choosing Find a Loan.

Add funds to your account:

You may only place a bid out of available funds in your FundingKnight account. If you need to transfer funds to your account, click here to do this now and go to Add Funds in your My Money account. Remember you can invest as little as £25.

Bid now:

Once funds are added please go to Find a Loan for further details on the business opportunity and to make a bid.

And now you can ask questions:

As part of our continued improvements to the FundingKnight website functionality and user experience we are launching Q&A facility to enable lenders to submit questions to borrowers.  Questions will be sent directly to the borrower.  This facility will help lenders gain the additional information required when making a decision on whether to bid on a loan.

Has the Funding for Lending scheme caused dwindling interest rates for savers?

funding

Last week, research from Moneyfacts showed that the average cash ISA rate is now 1.74% – a significant and worrying drop from the 2.55% that was on offer a year ago.

A study by Which? reveals that it’s not just ISA rates that have suffered.  What they describe as the “interest rates freefall” has spread across the entire spectrum of savings accounts.

Why the drop?  After all, the Bank of England base rate has been historically low for some time now.

The answer, according to Which? is the Funding for Lending scheme which the Government unveiled back in August 2012 as its solution to the lending crisis that was preventing consumers getting mortgages and businesses from finding the business finance they need to grow their way out of economic uncertainty.

Despite the honorable intentions of the scheme – few would disagree that more business funding is needed – the unintended consequence of the scheme is that banks have cut interest rates on savings accounts because they now no longer have such a pressing need for customer deposits.

The link between savings deposits and lending is too often forgotten when it comes to coverage of the economic problems faced by the UK.  Back in the days of local mutuals, customers hoping for their first mortgage would add their name to a list and only find their application accepted when enough customer deposits – savings – had come in at the other end of the business.

Now it’s a little different, of course, but money still needs to come from somewhere.  Viewed simplistically, banks and building societies have too options when it comes to generating money to lend out to its customers.  They can use the savings deposits they’ve taken from other customers or they can raise “new money” through trading the markets.

Pre credit crunch, most large banks funded a pretty large chunk of their mortgage or small business lending through the latter – with the exception of a few, they certainly didn’t have enough customer deposits to offset the amount they lent.

Then the world changed; banks couldn’t borrow as easily – or cheaply – on the open market, they were asked to re-capitalise and the need to bring deposits and lending values closer together led to a massive scramble for savings customers.

That’s why for so long, savings rates remained far higher than base rate.

Whilst that’s great news for the millions of savers who would otherwise see their money reduced by inflation, it does beg the question of sustainability.

Then came the Funding for Lending scheme that offered banks access to cheap finance to lend on to customers.  Great news… at first.  Except that now, banks aren’t quite so desperate to real in savers and, as a result, interest rates have tumbled.

What does this have to do with crowdlending or P2P Finance?

A lot, actually.

The problem with Government schemes is that they often have unintended consequences.  The decision for Government to lend via some peer lenders could have equally unintended consequences if it leads to reducing rates on the platforms involved.

In short, it’s difficult to fiddle with one bit of an eco-system without huge consequences elsewhere – it’s what gardeners deal with everyday, we just need a bit of common sense applied to the financial eco-system.

What crowdlending offers is not a tweak to the current system but a new system.  That’s why it’s sustainable and that’s why it can offer good value for all – for investors, for borrowers and for the platforms themselves.

Crowd lenders don’t need to hold capital against the loans made as their simply arranging loans, not facilitating them.  Likewise, there are none of the costs of a big banking network to eat into returns or ramp up costs.

Savers can put their money to work (fee free in the case of FundingKnight) and borrowers can access finance generated by real people – not Government schemes or money market trades that are unsustainable at best, risky at worst.

Alternative finance is just that – a real alternative – it’s time to spread the word to investors and keep peer to peer lending going from strength to strength.

Peer to peer loans trading – How our loan exchange can help investors

loans sign

Recently, our guest blogger, Katie, published her step by step guide to the FundingKnight loan exchange.

She was keen to point out that the loan exchange can be a great way to begin your FundingKnight journey.  After all, buying part of an existing loan (rather than bidding to get involved in a current auction) has several advantages:

You can start earning interest immediately

Since these loans are already live, your money starts working as soon as you “buy it now”.  No need to wait for an auction to end, no need to worry about getting out-bid and not having the chance to re-submit your offer.

It makes spreading your investment easier… and quicker

Most people agree that spreading out your cash (diversifying your portfolio) is a good idea.  It helps minimize risk because you reduce your exposure to any one loan failing.

But waiting for new loans to come on stream can be time consuming, particularly if you’re using a new platform with less loan traffic.

The loan exchange can help.

Instead of bidding on new loans, you can instantly buy parts of existing ones.  That gives you instant access to all the loans that were listed before you started investing and provides the perfect way to quickly spread your investment out thinly.

You can choose shorter investment periods

Existing loans have obviously been running for some time before you buy into them, in fact, some will only have months left to run – meaning that you enter loans knowing exactly what interest rate you’ll earn (assuming no defaults) and exactly when your investment will be repaid.

And of course, if you need to access your cash earlier than planned… you simply head back to the loan exchange.

Selling part of a loan is easy, too…

When it comes to selling part of your investment – perhaps because you want to switch to another loan or simply because you need to access your cash – we’ve tried to make things as simple as possible.

Rather than having to sell your whole loan in an “all or nothing” way, you can choose exactly how much of any investment you want to sell and whether you want to apply a discount or premium to the original price.

This flexibility can be useful if you want to invest a large sum into a loan but know that you’ll soon want to sell part of your investment and buy into newer loans to speed up diversification.

It’s a feature that Steve Lee – who featured in this  investor Q&A about peer to peer lending – singled out for particular praise.

We asked Steve, “are there any FundingKnight features you particularly like?” and this was his reply:

I’m impressed with the way that the loan exchange works, letting you buy and sell loan parts.  Say I have £500 to bid, I often want to do 5 x £100 bids at the same interest rate.  On most sites I have to do it manually five times and keep scrolling to the bid rate that on a tablet or phone is not easy. 

 

FundingKnight allows you to split up an investment and only sell part of it on the loan exchange, giving you the option to state exactly how much you want to sell at any one time.  In my opinion that makes it a superb solution, the best one available on any of the platforms I’ve used.

 

To visit the loan exchange, log on to www.fundingknight.com, choose Find a Loan from the menu on the left hand side and scroll down to see the loan exchange.  If you’ve not already signed up, register for free via the FundingKnight website and enjoy fee free crowdlending for investors.

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FundingKnight review: What makes us different for investors

being different

This week, a potential investor was kind enough to email us and ask what makes FundingKnight different?  She is keen to spread her investments over a wide range of products and wanted to know what unique differences set FundingKnight apart from other crowdlenders she uses.

We’ve sent a personal response with some answers but if one potential investor is asking the question, it obviously means that there are more of you out there who would like to know more about exactly what’s different about investing with FundingKnight.

So, here goes, a quick review of FundingKnight for lenders.  Feel free to check out the points below for yourself and gives us your thoughts – our door is always open to customer suggestions, tips and constructive feedback.

We lend to businesses not individuals

We arrange loans for businesses rather than people.

Why does it matter?  Deciding whether to invest in businesses or individuals is obviously a personal choice, but we think that the public information that’s available about businesses – such as accounts, cashflow analysis etc. – coupled with the internal and external credit checks we run, make it easier to assess whether a loan from a business is likely to be repaid successfully.

We offer fee free lending for investors

Investing through FundingKnight is fee free for investors.  There are no annual fees, account fees or hidden charges or costs, although of course, there might be tax to pay on any returns.  Many P2P lenders charge fees to investors..

Why does it matter?  It’s cheaper. Investors through us pay no fees, so the interest rate you bid is the interest rate you receive (pre tax and defaults).

We make it easy to sell part of your investment on our loan exchange

FundingKnight let you choose exactly how much of your portfolio you want to sell on the loan exchange.

For example,

You place a bid in a live auction, bidding to invest £1,000 in Apple Accounting Ltd. at 10% over 3 year loan period.

Your bid is successful, the auction completes and you now hold a £1,000 investment in Apple Accounting.  Each month you’ll receive a payment including capital and interest at 10% (prior to any tax and defaults).

A year later, you need to access some cash to finance some unexpected repairs.

You need £600 but you don’t want to cash in the whole of your investment, as you’d like to continue to receive 10% interest on the remainder.

With FundingKnight, you simply tell the system how much of your investment you want to sell, what price you want to offer it at and submit to put it live on the loan exchange.

One of existing investors, Steve Lee, recently called this feature “a superb solution, the best one available on any of the platforms I’ve used.”

You can invest everything that’s in your account

You don’t have to lend in ‘multiples’ on FundingKnight.  We do have a minimum investment of £25 but after that, you can add on whatever is left in your account to ensure that all of your cash is working as hard as it can for you.

For e.g. if you have £32.50 left in your account, you can invest it all rather than investing £25 and having to add more funds to release the remainder.

Finding borrowers and designing loans

Although we’re focusing on investors today, there are also several unique points about how we look after the businesses that borrow via FundingKnight.

  • We offer the chance to take upfront payment holidays, which can be very useful for businesses that need time for the loan investment to start flowing through into cashflow and profit.
  • We use forward – looking as well as historical information to assess applications and focus on how the loan will be repaid out of cash flow.
  • Investors will have access to a cash flow forecast for each loan, information that many P2P Lenders don’t provide.

Hopefully, that gives you some more detail about why crowdlending with FundingKnight offers a better way to lend money.

Please feel free to leave a comment with further questions or drop us an email at [email protected]

Customer participation at the heart of P2P Lending

Why suggestions from you are the key to constant improvement.

participation

(This is an excerpt from a full post published on the P2PMoney blog)

Back in November, I wrote a post about how P2P finance fits into the model of collaborative consumption – otherwise known as the sharing economy for the blog over at P2PMoney.

I made the point that collaborative finance didn’t necessarily need to equal ethical finance, social lending or any other type of ‘do-gooding’. Whilst some of the by-products of crowdlending might very well be good for the wider world (local lending for instance), most investors are in it for the returns, for the chance to make their cash work harder than it would do left in a straightforward deposit account. And that’s absolutely fine.

That doesn’t, however, break the link between P2P finance and the sharing economy. One thing that unites most of the new peer industries that have popped up over the last few years is participation. Peer based businesses need people to participate, whether that’s using someone else’s couch as a bed for the night, sharing a car or borrowing a Boris bike or participating in P2P finance.

By participating, I mean more than simply transacting. After all, transactions happen 24/7 in banks around the world. Participation is about contributing something more to the project, connecting with fellow users or participants and actively trying to make the overall experience more efficient and rewarding for everyone involved.

To read the rest of this article, visit the p2pmoney blog and to start crowdlending with FundingKnight, register as an investor or borrower via the FundingKnight website.

The Loan Exchange – A Step by Step Guide

stock exchange

So you have chosen to invest your money into FundingKnight’s peer to business lending scheme. Congratulations!

But now what to do with it?

There are a few choices for the uninitiated to make when investing in FundingKnight loans, such as which company you want to get behind and lend to, how much you want to lend and lastly the method in which you lend.

The first two choices of who and how much are fairly self explanatory but the method of how you lend is an interesting one.

Investors have two choices. You can bid on current new loans where you’ll be bidding in a reverse auction against other investors with the lowest bids – in terms of the interest rate you offer to lend at – being accepted to form the final loan.

The alternative lies in The Loan Exchange. This investment is no longer a live auction but rather, if we look at it in terms of those well known online auctioneers, ebay, a “buy it now” option.

And the process is ridiculously simple. Register as a lender on FundingKnight and deposit an amount of cash that suits you and your investment needs. You are now a bona fide lender and head straight to the my money page. You’re getting close…

   My Money

Now it’s time to choose the business and loan you want to invest in. Head to ‘Find a Loan’ and expand The Loan Exchange option.

You’ll find lots of different loan parts available to choose from.  These are investments that existing FundingKnight lenders already hold but are choosing to sell on, perhaps to release their cash, or perhaps just to spread the investment across more loans ad diversify their portfolio.  Some will be small parts, say £25, others will be much larger, say £1,000 or more.

Choose the loan part you would like to buy.

the loan exchange

Click on ‘Tell Me More’ and everything you need to know about your prospective loan terms, returns, business information, turnovers, financial history and more is there to read in clear, jargon free plain English.

Loan details

And this is where FundingKnight comes into its own: it’s a simple and clear process, user-friendly and quick. Any questions you might have will be answered here but if you need to know more then FK are more than happy to get back to you with further information.

Then one you’ve chosen and done your research (and providing you have enough funds in your account!) it’s a one-click process, just “buy now” and submit. Success! You are now a peer to peer lender!

So why would you want to “buy it now” rather than bid on a loan?

Even to a newbie like me, there are some clear advantages that might make you opt to “buy it now” rather than bidding. Clearly the danger of being outbid is removed and the process is quicker – and we like quick. Also, even if there are aren’t live loans online available to bid on, there will always be loan parts available to purchase on the loan exchange. Sometimes time is of the essence and a one click process is all you have time for.

Another plus point is that it helps you spread your investment and diversify your loans and that keeps it interesting – as well as spreading out your investment to reduce the risk that one bad loan will wipe out the returns on your whole portfolio. It also allows you more flexibility as you are able to invest in past loans that have already come and gone, no matter when you registered as a lender.

The loan exchange also lets you choose shorter term lending periods as some of the loan has already been paid off, leaving less time for the rest of the loan to run. This allows your money to go in and out faster than it might if you bid on a current loan.

Sometimes, it might even be cheaper. Because the investor selling may want quick access to their cash, they might offer it at a discount and everyone loves a bargain right?

And for those who may be slightly impatient (and I count myself in this!) you won’t have to wait around for your cash to start earning interest. No need to wait, get involved straightaway and start to see some returns as soon as possible.

You can find out more about becoming a FundingKnight lender here or click on the Katie’s crowdlending journey to find out more about my adventures in peer to peer finance.

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FundingKnight review and some more media mentions…

newspapers

As another loan successfully closes, this time giving Secure Archive Solutions the funds it needs to expand, it’s good to see that the word is spreading about how crowdlending can help boost business finance here in the UK.

TheBusinessDesk.com reported our recent P2P business loan to Secure Archive Solutions

We also got a mention on one of the Guardian blogs, courtesy of Modwenna Rees-Mogg who mentioned FundingKnight in her post about why crowdfunding is increasingly popular for SME financing

 

FundingKnight launch reviews:

Via the blog at p2pmoney: Launch of FundingKnight

P2PMoney founder, Ian Gurney, wrote:

“Looking at the website, it is well designed with clear graphics and colour schemes.”

 

On the wiseclerk.com P2P Banking website: FundingKnight launches auctions

 

Thanks to everyone who’s helping to shout about what we’re doing at FundingKnight.

Straight from an investor’s mouth… the crowdlending experiences of one FundingKnight lender

customer satisfaction

Steve Lee is the MD of Jumbocruiser Ltd., the largest British owned luxury sleeper coach operator in Europe.  As he gets closer to retirement, he’s looking for ways to invest his spare cash effectively.

Since summer 2012, Steve has been actively participating in peer to peer lending using a variety of P2P / P2B platforms to invest funds on behalf of himself, his company Jumbocruiser Ltd., the Jumbocruiser Retirement Benefits Scheme (where allowed) and Spenion Unlimited.

Steve has recently become an active FundingKnight lender and has kindly agreed to share, in his own words, some of his thoughts about crowdlending:

FK:  When did you first start experimenting with peer to peer finance?

Steve:  Summer 2012

FK:  Other than FundingKnight, which websites do you use regularly?

Steve:  Funding Circle, Marketinvoice, Thincats.  I also have interests in Zopa and Ratesetter that I am running down.

FK:  You’ve recently started lending through FundingKnight, a relative newcomer in the P2P space.  What do you need to see from a new entrant before you are willing to invest?

Steve:  I always look up the company history and look at the track record of the people behind the company and do a bit of research in the same way I might if investing in shares or loans on other platforms.  When it comes to loans on the platforms, I am slowly learning to use common sense as well.  On one platform I bid £5,000 on a company that was set up just to do a major conference with global speakers (i.e. Bill Clinton) designed for budding entrepreneurs.  This was before I looked at the project carefully.  On reflection I realised I should never have placed the bid as the opportunity was fraught with danger – who was going to cough up £250 to hear people with no entrepreneurial skills like Bill Clinton speak?  I am more careful now and as a minimum I get a credit rating and require a track record of the people involved and even then spread myself out thinner initially.

FK:  Why does P2P finance appeal to you?  Is it solely about the return on investment or does helping small businesses / getting more involved in actively managing your money matter too?

Steve:  I have to apologise but despite being a former hippy activist, I do not do it for the kharma but merely due to the fact that I need to invest my spare cash effectively before I retire.  I believe there is a short term window of opportunity until the government and banks get their acts together where I can overall hit around the 10% return mark before tax and I am taking advantage of it.

FK:  Are there benefits to be had from dealing with smaller companies like P2P lenders rather than big, mainstream banks?

Steve:  It depends on (a) rates and (b) security required when lending to profitable businesses.  For new businesses P2P will probably remain the ONLY way to get capital invested.  There are many lenders out there who will do auto-lending, so those loans will be covered once they get past the platform’s own initial evaluation for loan acceptance. Nearly all my failed loans (on other platforms) were auto-lent so I no longer do that but some people just do not have the time to mess around so I still see a value in auto-bidding for the lenders and the platforms and the borrowers.

FK:  Are there any FundingKnight features you particularly like?

Steve:  I’m impressed with the way that the loan exchange works, letting you buy and sell loan parts.  Say I have £500 to bid, I often want to do 5 x £100 bids at the same interest rate.  On most sites I have to do it manually five times and keep scrolling to the bid rate which on a tablet or phone is not easy.

FundingKnight allows you to split up an investment and only sell part of it on the loan exchange, giving you the option to state exactly how much you want to sell at any one time.  In my opinion that makes it a superb solution, the best one available on any of the platforms I’ve used.

FK:  What would you say to potential investors wondering whether to try P2P Finance?

Steve:  Spread your loans thinly.  Look at who you are lending to.  Feel comfortable about the lending platform that you will initially be sending your money to.  Do not be greedy and bid a lot on loans which have high interest rates but carry a bigger risk.  Subscribe to a database like Company Check and if things look to be going downhill, do not delay selling on a secondary market (loan exchange) even if you are getting a high rate of return.

It is quite difficult to lend out a lot of money quickly so use a site with a secondary market (loan exchange) and accept lower rates for now so you all get all your money lent out and then slowly sell the loan parts when rates are higher elsewhere.  It is a juggling act but it can be done.

FK:  Thank you Steve, we really appreciate you taking the time to share your thoughts with the FundingKnight blog.  Good luck with your crowdlending investments in the future.

Note: The answers above represent Steve’s own personal views and opinion and in no way constitute advice.

More about Steve:

Steve Lee is MD of Jumbocruiser Ltd, one of Europe’s leading sleeper coach companies with coaches from 8 to 16 passengers.  If you are interested in finding out more, please use the online quote form to get in touch.