launch

Finmar Launches P2P Loans to Business Owners

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In Germany p2p lending service Finmar launches, offering loans from 2,500 to 25,000 Euro for loan terms from 6 to 60 month to business owners. Nominal interest rates range from 6 to 11 percent and are set by Finmar depending on the Schufa credit grade of the business owner. Finmar charges a 5.95% origination fee for the loan. Lenders can invest starting with bid amounts of 250 Euro and are not charged any fees. Only residents of Germany can borrow or lend. Finmar cooperartes with Fidor Bank to comply with regulation.

The approach

While most p2p lending services emphasize that the identity of borrowers is not revealed (in public), Finmar wants the borrower to activly use it and build on the reputation the business / or the business owner has. The idea is that established businesses could broadcast their loan purpose and convince suppliers, business partners and customers to become loan creditors. To do this Finmar asks loan applicants to post a video to illustrate the loan request and to reach out to their community. If this approach is successful local and regional loans will frequently occur on Finmar, a thing that is not common on other p2p lending services where location of lender and borrower usually play no or minor roles.

The company

I have been following the progress of the founder Clas Beese since the idea phase 2 years ago. The founders opted for bootstrapping rather then raising capital. Before the launch there was a closed beta in the past weeks. I am curious to watch how Finmar does as it is the first p2p lending service in Germany focussing on p2c lending.


Press “CC” to turn subtitles into english language.

Funding Community Launches P2C Lending in the US

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Last week the p2c (peer-to-company) lending service Funding Community launched. P2P loans in the US so far were done nearly entirely to individuals. Funding Community wants to change that and enable loans to local businesses. Funding Community is open to lenders from most states (and not restricted to accredited investors). All loans are 9 months loans. In addition to interest payments lenders may get rewards from the company (e.g. discounts). One example is a fitness company that offers 9,7% interest plus 2 personal traing sessions as reward.

Note that technically lenders at Funding Community do not lend directly to the company that seeks the loan. Instead, lenders lend to Funding Community, which, in turn, lends money to small companies, including the particular ones the lender selected.

Secured loans

Funding Community states that all loans are secured

The interest rates we provide, as well as a security interest in our assets are designed to decrease the risk to lenders. In addition, we take a security interest in small businesses to whom we make a loan and also generally require a personal guarantor to support repayment. We also set aside a small pool of capital to cover a portion of loans that default. It bears repeating, however, that you may not lend to us or use Funding Community expecting a return or profit. You may only use Funding Community if your primary purpose in making the loan is to help us overcome short-term cash-flow considerations in supporting small business growth in the United States.

For now, Funding Circle started with making loans to businesses located in New York and plans to expand into other areas later.

Fees

Funding Community charges companies a 2.5% loan origination fee and lenders a 0.5% service fee.

Linked Finance Launches P2C Lending in Ireland

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Linked Finance brings p2c lending to Ireland, enabling Irish residents (and companies) to lend to Irish companies. Borrowing companies are grouped into one of four categories (consumer, Manufacturing, industrial and agricultural, young businesses or knowledge, information technology (IT) and expertise). Linked Finance reviews each potential borrower and only allows businesses to borrow if they have successfully completed a full credit vetting process. The process is based on validating key up-to-date financial information and ensuring the creditworthiness of each borrower posted on the site. Linked Finance had start-up investment from Enterprise Ireland, and partners and investors in the venture include entrepreneurs Bobby Kerr, Senator Feargal Quinn, and Kingsley Aikins, as well as Irish American businessmen Peter Hooper and Carl Shanahan.

Folk2Folk Introduces P2P Mortgages for Cornwall and Devon Properties

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Folk2Folk launches a p2p lending services for interest-only loans that are secured by first mortgages. A borrower may not use the home he lives in as security, the services aims at residential buy to let, holiday homes, commercial or industrial premises, farms and agricultural land. The loan amount can be 60% or less than the value of the security.

To start lending a minimum investment of 25,000 GBP is required. Quoted interest rates for last week range from 6 to 9%. Borrowers pay a 2% fee. Fixed term loans as well as variable length loans are possible. The concept of a p2p mortgage may sound complex, but Folk2Folk says they aim to complete the lending in 8 to 10 calender days from the time the borrower applied.

There is a very detailed set of rules describing all eventualities.

P2P Lending in India – Interview with i-lend

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VVSSB Shankar, founder & director of i-lend, answers the questions of P2P-Banking.com.

What is i-lend about?

i-lend is an Internet based P2P lending platform in India which went live two months ago. Presently this service is available in Hyderabad, Andhra Pradesh. The portal connects the two sets of customers i.e. borrowers and investors who register online, undergo a verification process, list their requirements on the portal and agree for a mutually beneficial financial transaction.

Tell us about how your target customers traditionally seek loans?

Typically most of our borrowers have recourse to either personal loans from banks or resort to credit cards usage. These personal loans are available only to a selected segment working in some top 500 companies. Most people who are not a part of the above mentioned segment have to resort to private borrowings on which interest rates are very high more like 21 to 28%.  Moreover a vast majority of urban India who otherwise are gainfully employed are denied credit for various reasons. Personal loans are also very expensive in India attracting rates between 16% – 24% by banks.

Is there a reliable credit scoring model in India?

CIBIL – a credit rating institution was established a few years ago and today it is the de facto body which maintains credit scores. However the credit rating eco system is evolving.

What other challenges did i-lend face to introduce p2p lending in India?

Before establishing a P2P model in India, it was essential that we understand the complex regulatory environment. We had ensure that we were following various laws governing the banking sector, financial institutions and other state laws with respect the money transaction. With this information, we then worked on a viable business model for P2P lending in India.

We also had to modify the model such that both borrowers and investors found it attractive. For instance, i-lend does 100% physical verification of all details provided by the borrowers at both his residence and workplace reference. We also collect Post-dated cheques from borrowers for the loan tenure.

What are the three main advantages for lenders?

– Higher returns (at least 3 times more) on idle money compared to Saving Account – The return on savings account in India is 4% while i-lend offers a minimum returns of 12% on loans given to borrowers.

– Monthly returns on money invested through borrower EMI payment – While other investment options have a lock-in period, p2p loans will give investors monthly returns i.e. liquid cash

– A new investment option – where investors can decide whom they wish to invest in, their desired interest rate and spread their risk by investing in multiple borrowers – Min. investment amount is Rs.5,000.

What are the three main advantages for borrowers?

– Lower interest rates starting at 12%. Typical bank rates are anywhere between 17-19% and offered to select few

– No prepayment charges – Banks charge anywhere between 2-4% of the principal outstanding as pre-payment charges

– Flexible loan amounts – Rs.25,000 – Rs.300,000: Banks typically offer loans from Rs.100,00 only.

What interest rates do you expect to see on the marketplace?

We expect the interest rate to be anywhere between 14-16%. Continue reading →

Rainfin brings p2p lending to South Africa

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Today Rainfin launched the first p2p lending service in South Africa, which to my knowledge is the first national p2p lending service operating in an African country. Based on a sophisticated technology founders Sean Emery and Hannes van der Merwe launched the service after more than a year of implementation. Borrowers can apply for loan amounts between 1,000 and 75,000 ZAR (approx. 125 to 9,250 US$). Rainfin expects to reject as much as 80% of the applications. Rainfin charges 3% in transaction fees (2% to borrowers plus 1% to lenders). Rainfin uses an auction systems with the borrower setting the maximum interest rate he is willing to pay. Current listing are for nominal interest of about 15%. Continue reading →