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]

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  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.