Lending Works launches with eyes on region

THE chief executive of peer-to-peer lending company Lending Works, which launched yesterday, said Yorkshire is “a key focus area” for the business as it targets the UK’s £25bn personal loan market with its offering.

Lending Works, which is based in London, was founded by CEO Nick Harding and a team of experts from the banking, accountancy and finance industries.

The company’s online platform allows people to lend their savings to creditworthy people requiring finance.

Hide Ad
Hide Ad

Mr Harding said: “As a region, Yorkshire has a demonstrably active and engaged investment community that appreciates the benefits of social lending and could be the source of further investment capital as we grow and expand our business.”

Lending Works said that personal loan borrowers are “prudently selected” by the company’s team of underwriters. Loan terms and lending periods are both one to five years.

Lending Works also said lenders will be protected by the ‘Lending Works Shield’, which includes a reserve fund, borrower default insurance and fraud and cyber crime insurance.

The company, which completed a pre-launch funding round of £3.5m from venture capital and angel investors, said it is targeting a net return to lenders of around 5.1 per cent annual equivalent rate when their money is lent for five years.

Hide Ad
Hide Ad

Meanwhile, Funding Circle, a peer-to-peer online marketplace for business loans, which launched in 2010, said it is extending its offer so that it is available to more small businesses owners in the property development space.

It already sees property developers apply for finance through its online marketplace, but a “more formal and structured offer” will allow more people to apply and ensure they have more control over the loans they take, said a spokeswoman for Funding Circle.

Research released this week from Leeds-based peer-to-peer lending platform Rebuildingsociety.com, which also facilitates business loans, found that more than one in five of the UK’s small and medium-sized businesses (SMEs) have seen the lending terms from their bank worsen in the past five years.

More than two fifths of those SMEs affected have had the interest rate on their overdraft facility increased.