Almost 100 businesses in the South West have raised finance through an online peer-to-peer funding platform which brings together investors and businesses seeking funds. Funding Circle lets businesses apply for business loans of between £5,000 and £250,000, which are funded by over 15,000 individual investors around the UK.
Funding Circle has lent in excess of £3m directly to businesses in the South West, with loans averaging around £40,000. Small businesses borrow from individual people who themselves bid to lend the money. The lowest interest rate offers become part of the loan offer, so the borrower can be sure of a great deal! Meanwhile investors stay happy, as they get a better rate than on the high-street. On average, it takes 12 days for businesses to complete the process and have their loan paid out and the gross yields are currently around 8.3%.
Crowd Funding platforms have been growing in popularity over the past couple of years. The most popular feature of this type of financing is the flexibility in how businesses can use the finance.