p2c lending

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.

Fundingknight Launches Auctions

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British p2c lending Fundingknight, a service facilitating p2p loans to British companies, yesterday launched auction bidding. Basic requirements for companies to be eligible to submit a loan application are:

  • The business must have at least two years trading history
  • They must be limited companies registered at companies house
  • And finally, they must be UK based businesses with a UK bank account

Fundingknight then uses the following criteria to decide if the application will be listed on the marketplace

  • Is the business well managed?
  • Is the company realistic about risk?
  • Will the business generate enough cash to repay the lenders?

Fundingknight launched in September 2012. There is no data publicly available on the loan volume to date.

Squirrl Launch – Secured Loans to Suppliers

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Exclusive breaking news: In the UK Squirrl.com launches today. Squirrl provides an online finance platform for well established commercial organisations (Suppliers) that have a business model where assets are provided to their customers and paid for over a period of time through Pay for Use Agreements.  Examples are the motor industry, industrial machinery, office equipment etc….  If this type of organisation has no other financial arrangements it must pay for the assets at the start of the contract, and only receive its money back over the life of the agreement.  Few commercial organisations can suffer the impact of this negative cash flow, yet customer demand for this service model is growing.  Investors using the Squirrl.com platform can lend money to this type of Supplier in return for higher interest rates than they would get from the high street banks and have their loans secured.

Lend as little as 25 GBP

Lenders can lend as little as 25 GBP (approx 40 US$). Aside from a one time identification fee, Squirrl currently does not charge lenders any fees (but in the T&C there are terms for fee structures, so fees may be coming later). Loan terms range from 3 to 5 years with repayments are conducted quarterly. Squirrl has a secondary market allowing lenders to sell of their loan parts to other lenders.

Two auction models

Supplier offers are auctioned with lenders bidding either on auctions that close on 100% funding or time auctions where the interest rates are falling if more bids come in than the asked loan amount.

Multiple measures to reduce risks

Aside from the fact that loans are secured by assets, Squirrl has multiple further measures to reduce risks for lenders. For example lenders do not bid on loans that finance one single asset but rather on loans that finance 20 similar assets. An example could be a loan to a supplier that finances 20 printers for 20 government schools. Each portfolio is given a risk rating which ranges from 1 for low risk (such as schools, health care and other public sector agreements) through to 7 for higher risk (such as small businesses agreements). Squirrl.com initially accepts only the lowest risk levels (1, Public Sector and 2, Major Listed Public Companies). The risk rating of the portfolio, rather than the Supplier, enables lenders to make an informed decision as to how secure invested money is.  A feature of Squirrl.com is the ability to select an “interest group” to support.  These are linked to the risk rating so for example a portfolio may be based on education or health, or any other defined interest group. Continue reading →

U-Haul Does P2CLending – Issues Own Notes

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A new twist to peer-to-company lending. So far p2p lending marketplaces facilitated lending from the crowd to other companies now U-Haul has its own p2p marketplace called U-Haul Investors Club. There anybody can purchase collateralized debt security notes issued by Amerco (the parent company of U-Haul). The minimum deposit required to start investing is 100 US$.

The loans are backed by collateral. Typical interest rates range from 3 to 7%. In the time since the opening of the U-Haul Investors Club in February 2011 approx. 7 million US$ in equipment financing was raised.

(via SocialLending.net – read more in Peter’s article here).