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.

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.

New crowdlending opportunity: Secure Archive Solutions Ltd.

SAS Ltd logoA new investment opportunity is now live on our website for all registered lenders to bid on.  If you’re already registered with FundingKnight you can log straight into the website to read all about the loan opportunity, review the financial information and, if you wish, place a bid.  If you’re new to crowdlending or not yet signed up with FundingKnight simply go to www.fundingknight.com to sign up as a lender.  You can start investing with £25 and we charge no fees for taking part in a loan.Whilst it’s early for us to predict rate which potential lenders will achieve, our first auction-based loan provided lenders on average with a rate of 9.98% p.a.

New borrower: Secure Archive Solutions Limited

Amount: £50,000

Period: 2 years

Auction duration: 14 days

Based in Altrincham, Cheshire, Secure Archive Systems provides document storage and archive facilities, offering bespoke solutions in the document management service sector, with a turnover of over £400,000 in the last financial year.It needs the funds to extend its storage capability, installing racking in its newly acquired warehouse, building an extension to its vault, and upgrading its IT.

Once registered, you can find more details by logging on to www.fundingknight.com and choosing Find a Loan.

 

Crowdlending: Just one part of a sharing economy

Vintage 'pool it' poster encouraging car sharing (from the US national archives)

When world economies have recovered, our children have grown up and discussions about the global credit crunch are more suited to history or economics lessons rather than making front page news, what will be the lasting legacy of the economic turmoil we’ve all endured over the past few years?

Regular readers might already have seen our collection of inspirational quotes from Youngme Moon’s book Different.  If not, take a look…  it might get you thinking about how to stand out of the crowd, in the meantime, do you agree with the idea that “the storm has refocused us all in some collective way.”

There’s a growing band of people who think the credit crunch will turn out to be far more than a blot on an otherwise upwards graph of prosperity and consumption.

Even people who are managing to ride out the storm well on a personal level seem affected by the general consensus that it’s time to stop prioritizing greed, financial success and growth at the expense of everything else.

If a recent article in the New Statesman is to be believed, the time has come to adopt a sharing, caring attitude…

“So what can peer to peer activity bring to the twenty-first century table where the feast is rapidly diminishing and what’s left is meted out so unevenly?  The answer is an economy based on collaboration rather than individual ownership, trust rather than status, adaptation rather than standardization.  The answer is a sharing economy.”

The article, Collaborative consumption: the new economy, caught my eye for a number of reasons.

First of all it began with a quote from a book I greatly enjoyed as a student, (Don DeLillo’s White Noise), then it continued by exploring some of the themes of the book I’m reading right now, What’s Mine Is Yours: How Collaborative Consumption is Changing the Way We Live  by Rachel Botsman.

So, that’s my bookish obsessions satisfied, but why is all this relevant to the FundingKnight blog?

Well, because crowdlending (or peer to peer lending if you prefer) is one of the new sharing activities that Botsman talks about in her book.

When she writes, “The convergence of social networks, a renewed belief in the importance of community, pressing environmental concerns and cost consciousness are moving us away from top-heavy centralized and controlled forms of consumerism towards one of sharing, aggregation, openness and cooperation” she covers many of the values we hold at the core of FundingKnight.

New finance is all about moving away from top-heavy corporations towards leaner, agile networks, which can connect people for mutual reward.

What started out as kids having fun online and morphed into the global giant of social networking now has the power to genuinely change the world for the better, and there is certainly plenty of wastage to start cutting out.

Apparently, the average drill is used for just 15 minutes in its lifetime which is a pretty sad indictment on our consumerist tendencies…

There’s wastage, too, in the financial system.  Plenty of people are seeing their cash dwindle away in easy access savings accounts that barely manage to keep up with inflation – despite its recent falls.

Now, peer to business lending isn’t for everyone.  Yes, there are risks and you shouldn’t invest money you can’t afford to lose and yes, there’s a road to climb before such lending is ready to go mainstream but one thing’s clear, putting cash to use investing in British businesses has the potential to become hugely more efficient for both lenders and borrowers than mainstream finance.

What’s more, crowdlending manages to promote sharing without asking people to give up their individual identities.  Borrowers get more choice and flexibility and can build their own loans, whilst lenders choose where their money goes and build individual investment portfolios.

It’s well summed up by Mark Levine, writing in the New York Times,

“sharing is to ownership what the i-pod is to the eight track, what the solar panel is to the coal mine.  Sharing is clean, crisp, urbane, postmodern; owning is dull, selfish, timid, backward.”

The words are emotive, but there’s something in them.  So many sectors and industries have already undergone a massive shift in power from corporates to customers.  New finance is about the financial sector making that shift.

This is collaborative consumption at its best…“(it)is not asking people to share nicely in the sandbox.  On the contrary, it puts a system in place where people can share resources without forfeiting cherished personal freedoms or sacrificing their lifestyle.”

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Bank of Dave boosts appeal of peer to business lending

a bank renamed with a sign reading "The Alternative"

Just after Bank of Dave was shown on Channel 4, I wrote this post about how the seeds of change were starting to sweep across the financial services industry.

Since then, the momentum has gathered.  Today the Daily Telegraph reported the results of a survey carried out on behalf of Myvouchercodes.co.uk  in which more than half of those surveyed said that they would switch to the “Bank of Dave”.

So, it seems like the public appetite for alternative finance is more than just a flash in the pan.  It seems like commonsense banking – the type that we’re interested in delivering here at FundingKnight – has really captured the imagination of the masses.

Of those who said they’d bank with Dave, 64% were attracted by the better rates of savings interest available.  That’s hardly surprising.  As I wrote in my last post – peer to business lending… more than just a romantic notion – trying to pretend that peer to business lending is not about competitive rates – for both borrowers and savers – would be naive.  Of course people want to manage their money well… but there were also large groups of people attracted by more social concerns.

57% liked the fact that Dave’s profits were headed straight for charity, whilst 41% mentioned the lack of bonuses for bosses as the reason they’d get involved.

Now, of course, FundingKnight is not a charity.  We are, however, committed to providing an alternative to bank based lending and borrowing.  We can’t promise a silver bullet to solve the world’s problems, but we do think that lending person to person, peer to peer can help make the financial world a little bit better for us all.

If the idea of better savings rates appeals to you, or you are a small business looking for a business loan why not register on the FundingKnight site.  We’ll keep you in touch with developments as we build a brand to shake up the way people lend and borrow money and we hope you’ll join us as we help small, independent businesses access the funds they need to grow.

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Peer to business lending with FundingKnight… more than just a romantic notion

red love heart

My last post broached the subject of small business loans and the role that credit checks and scoring systems play when it comes to loans for business.  It was great to receive some comments in reply and one of them – pasted below – really got me thinking…

“Peer to business lending is based on everyday savers lending to everyday businesses” – This is a romantic notion. The reality is that a) Saver/Lenders do it to get a better rate of return and b) Getting a P2P loan requires that you pass some of the most stringent credit check criteria out there. Credit scores are there for a reason and while the system may not be perfect and could benefit from refinement, implementing something with even a small element of subjectivity or human interaction would be logistically very difficult and make it impossible to be consistent I imagine. I’m afraid I think what we have may be as good as it gets for now.

Sean O’Farrell

So – peer to business lending – Is it part of a wave of new finance that’s genuinely trying to shake up business funding in the UK… or is it really nothing more than a romantic notion?

It’s a valid question to ask.

After all, it’s easy for new entrants to criticise the status quo.  It’s tempting to get carried away in the quest to be different…

But actually, when it comes to the crunch, I really do think that peer to business lending is about more than financial performance, more than simple greed.

Of course, the figures have to stack up for both sides.  Savers do – quite rightly – want a better return on their hard earned cash and borrowers – understandably – want to get the business funding they need on the best terms possible.

But beyond that, all of us want to feel like we’re doing the right thing.

When faced with the choice of investing in unknown stocks and shares in unknown locations vs. the opportunity to lend to hand-picked British businesses, many people would opt for the latter.

There is a huge movement to support local communities, there’s a huge movement to invest in local trade.  That’s not romantic, that’s a reality.

If the global financial crisis has taught us anything, it’s that we need greater visibility about what our money is funding and how that investment is performing.  There is a growing band of people who want to invest in tangible businesses they can touch and feel… and through peer to business lending we hope to be able to help them invest locally.

History shows that greed is rarely the path to happiness.  Neither is a willingness to accept that what we have now is as “good as it gets”.

People want to protect their savings and feel like they are doing the right thing.  People want to help the British economy recover.  People want to be able to be an equal partner in setting the terms on which they borrow and people want to control their finances.

Those notions aren’t romantic and they aren’t unrealistic.  They’re evidenced by campaigns such as Move Your Money, they’re demonstrated by the willingness of customers to support their local high street or pay more for locally sourced, organic produce and they will become the reality with the growth of peer to business lending.

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