Founded in 2014 by CEO Stuart Lunn, LendingCrowd is the only fintech lender to be born and bred in Scotland. The Edinburgh-based platform matches investors looking for a better return on their investment with SMEs seeking business loans.
SMEs are the powerhouse of the Scottish and UK economies, but many still face difficulties in accessing the funds they need to expand and enter new markets. To support Britain’s vibrant and growing community of small and medium-sized businesses, LendingCrowd uses industry-leading technology to bring investors and borrowers together and speed up the financing process.
LendingCrowd aims to provide access to simple, lower-cost lending. It has developed its own proprietary peer-to-peer platform and also uses a mix of industry-leading technology tools and platforms to deliver the best investor and borrower experience.
Since its launch, LendingCrowd has matched more than 6,200 investors with over 500 businesses, lending in excess of £45 million. LendingCrowd is a fintech business that has a distinguished and proud financial services background, with a focus on regulatory compliance and governance.
LendingCrowd can arrange loans for every type of SME – including sole traders, partnerships and limited companies – providing the business has been trading for at least two years and has an annual turnover of at least £100,000.
The list of businesses that have secured loans through the platform includes Glasgow-based digital communications agency Dog Digital, skiing, snowboarding and surfing retail specialist Freeze Pro Shop and Summerhall Distillery, producer of the award-winning Pickering’s Gin brand, which secured £500,000 in debt financing to expand its facilities and meet demand for its hugely successful gin-filled Christmas baubles.
Matthew Gammell, director and co-founder of Summerhall Distillery, said: “Not only have we been impressed with the speed and standards of customer service from LendingCrowd, it’s also refreshing when you get such a personalised approach to understanding the requirements of your business.”
LendingCrowd is fully authorised by the Financial Conduct Authority and in 2017 became one of the first platforms to launch an Innovative Finance ISA (IFISA), providing investors with tax-free returns on their portfolios.
In 2016, LendingCrowd partnered with the Scottish Investment Bank, the investment arm of Scottish Enterprise, in an initiative expected to stimulate loans of up to £35 million to SMEs across Scotland and help fill the funding gap experienced by businesses looking to borrow between £25,000 and £500,000.
LendingCrowd is currently shortlisted in the Best Crowd Funding Platform and Best Innovative Finance ISA categories in the Shares Awards 2018, along with the Alternative Finance Provider of the Year category in the British Small Business Awards.
LendingCrowd was founded in 2014 by CEO Stuart Lunn, who had identified that there was a massive funding gap experienced by SMEs looking to borrow to fund the growth of their business. Banks were still cautious about lending to small businesses and Stuart believed that there had to be a better way to close the gap by mixing the latest technology with vast financial experience.
The fintech lending platform began with a team of two and has expanded rapidly since it was launched with the aim of making it easier for SMEs to access growth finance from investors. It has grown to a team of 25 across roles in business development, credit analysis, marketing, finance and technology development.
Having created a business with strong financial service fundamentals, especially around credit assessment and compliance, LendingCrowd became one of the first fintech platforms to move from interim to full Financial Conduct Authority permission in November 2016. This meant the business could also become an ISA manager and launch one of the first Innovative Finance ISAs on the market in February 2017.
In early 2018, LendingCrowd secured an external funding round of £2.2 million that was led by angel syndicate Equity Gap and included Scottish Investment Bank and a number of prominent private investors from Scotland’s entrepreneurial and finance scene.
SMEs are the backbone of the economy, making up more than 99% of the business population and accounting for some 60% of all private sector employment. However, many SMEs have struggled to secure the finance they need to grow because of a “persistent funding gap” highlighted by the Scottish Government’s Council of Economic Advisers. We wanted to do something to close this gap.
The business lending market is dominated by a small number of large banks that have scaled back lending to small businesses following the financial crisis of 2007/8.
More than 6,200 investors have signed up with the platform, which has arranged over £45 million of loan funding across Britain since its launch, including a record £13.9 million of lending in the first half of 2018. LendingCrowd feels passionately about its Scottish heritage and is proud to have loaned more than £12 million to Scottish businesses, stimulating growth and employment in the local economy.
From a standing start, LendingCrowd has grown its brand and service successfully. The business has doubled its loan book in each of 2016 and 2017 and is on track to do so again in 2018. Compared with the same period a year earlier, total lending in Scotland trebled to £3.9 million for the six months to the end of June 2018.
Businesses from Kirkwall to Kilmarnock have approached the platform seeking support for their funding requirements. Analysis of LendingCrowd’s Scottish loan book shows that its lending spans the breadth of the country’s economy, from agriculture and manufacturing to retail and transport. Creating opportunities, creating jobs, creating futures.
Having laid solid foundations, LendingCrowd is gaining traction in the market. The company forecasts that it will significantly ramp up its Scottish loan book over the next 18 months as awareness of its brand and business model continues to build.
Stuart Lunn: Chief Executive Officer
Sir Sandy Crombie: Chairman
Mike Allan: Director of Operations
Ian Cunningham: Head of Credit
Scott Gray: Financial Controller
Adrian Innes: Head of Origination