Crowdfunding business completes its first two deals

PEER-TO-PEER online business lending platform rebuildingsociety.com has completed its first two fundraising deals.

The Leeds-based business, which was founded in December 2011, raised funds for two companies through its online community of lenders, totalling £55,000.

Mowbray & Son, a Lincolnshire-based £3m turnover building company that works on public sector contracts, secured £50,000 of working capital from rebuildingsociety’s community of lenders, with more than 30 lenders contributing to the total amount.

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The amount is repayable over 60 months, with each lender receiving interest throughout the term on top of its cash loan. Amounts loaned ranged from £10 to over £1,000 and lenders offered rates between six per cent and more than 15 per cent.

Hall Business Group, a £100,000 turnover business which required funds to translate a business book, borrowed £5,000 and will repay the amount over six months.

Leeds University graduate Daniel Rajkumar, who founded rebuildingsociety, said: “We’re delighted to have facilitated these two loans. Our proposition is simple – through our platform we connect profitable businesses that want a loan with individuals who want to earn a good rate of return on their capital by lending as part of a crowd.

“Borrowers are UK businesses of all sizes. Their biggest barrier to growth is finance, but with alternative sources like rebuildingsociety.com emerging, there is no reason why well-run businesses should have their growth plans curbed.”

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Businesses can borrow between £2,000 and £50,000 and individual lenders can lend between £10 and £2,000 on any one bid, but can place multiple bids. Firms apply to be listed on the online marketplace and must meet certain criteria, including being two years of age, limited and profitable.

Once the business is listed lenders will propose an interest rate according to risk and firms can decide whether to accept.

Rebuildingsociety currently has six businesses looking for funds, with requests totalling nearly £250,000. The firm said it currently has more than 300 lenders signed up to the site.

The board of rebuildingsociety includes Gary Lumby, the former director of small business banking at Yorkshire Bank, Kenton Robbins, the regional director of the IoD in Yorkshire, Andy Bolton, the former risk manager at GE Capital, and Jeremy Wilson, the former finance director at WorldEvents.

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Rebuildingsociety has a network of freelance contractors performing various roles, which takes its headcount to nine part-time and full-time positions. From April 2014 peer-to-peer lenders such as rebuildingsociety and Funding Circle will be regulated by the new Financial Conduct Authority and consultation will decide how the new rules will work.

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