P2P lending service Lending Works launched today. The service says its unique selling proposition is that it offers lenders actual insurance and thereby more protection than the provision funds scheme major UK competitors like Zopa and Ratesetter do offer. Reading the fine print, there is insurance, but capped at 10% bad debt, which should be sufficient in the current market situation: ‘The Lending Works Shield provides cover of up to 10% of all Lending Works loans and so provides a market leading 17 times cover‘ [compared to a stated 0.58% industry wide personal loan borrower default rate]. Lending Works is open to UK residents with a UK bank account.

I also noted that Lending Works allows lenders the option to exit their investment prior to the loan duration if they accept a fee of 0.6% (or 20 GBP) whichever is greater.

Available loan terms range from 1 to 5 years.

Lending Works says it has raised 3.5 million GBP prior to launch.