THE ALTERNATIVE LENDING REPORT Volume 2, No

Total Page:16

File Type:pdf, Size:1020Kb

THE ALTERNATIVE LENDING REPORT Volume 2, No AlternativeLending.io Finance • Technology • Legal & Regulatory • Strategy THE ALTERNATIVE LENDING REPORT Volume 2, No. 2 January 25, 2018 INSIDE Poll Reveals Vigorous INDUSTRY NEWS Lending Scene for 2018 A recap of recent news By Mark Henricks of importance to lenders, brokers, and service providers .......................... 2 More than a third of U.S. lenders plan them lending more to borrowers. “These to loosen borrower requirements in 2018 calculated modest rate hikes look good LOANTAPE and nearly 90 percent expect to lend for lender sentiment,” Sioukas conclud- more capital, according to a survey by ed. The other 44 percent of lenders who Select Banks with Significant Magilla Loans. The survey of more than answered this question indicated, how- Exposure to Small Business Loans ....... 5 200 lenders included large and commu- ever, that Fed rate adjustments would not nity banks as well as alternative lenders affect how much they loaned. Specialty Finance Companies with and credit unions. In what could be a positive sign for Exposure to Small Business Loans ....... 5 Magilla, an anonymous search engine loan approvals, more than a third – 36 for business and residential loans, did percent – of the lenders said they would not break out results by source of funds. be reducing their current requirements Online Lenders ..................................... 5 CEO Dean Sioukas said, however, that for loan approval. A majority – 56 per- small and alt-fin lenders considerably cent – said they would not change their Funds of Interest .................................. 5 outnumbered the large banks included in requirements, and 8 percent said they the poll. would tighten requirements. Indices of Interest ................................ 5 “Since the majority were community “I took it as a positive,” Sioukas said. banks and alt-lenders, while there are “Banks don’t move that quickly. When we M&A + Partnerships ........................... 6 only so many big banks, it really does saw that over a third are willing to reduce show you what they’re thinking,” Siou- their requirements – what does that mean New Investments ................................. 7 kas said. “The sentiment was consistent for the other two-thirds?” across the different lender types.” Although only a minority of lenders New Technology & Product Launches .. 8 About 40 percent of the lenders sur- anticipated loosening borrower require- veyed indicated that they were primarily ments, Sioukas speculated that it could serving business borrowers. The other 60 turn into a broader trend. “I’d say that U.S. SMALL BUSINESS LOAN percent were providing residential mort- you’re going to end up with followers in INTEREST RATES BY LENDER gage financing. the other two-thirds,” he said. Nearly 9 in 10 Lending Optimism Depends Avg. Annual Interest Rate (AIR) Expect to Lend More on Where You Live Type of All SBA Lender Loans Loans One of the most definitive findings There was some regional variation of the survey was that a large majority of in the degree of optimism lenders had Online & 3.00% - 4.39% - lenders – 88 percent – said they expected about the market. Approximately 60 Alternative 71.00% 7.01% to lend more in 2018 than in 2017. percent of respondents indicated they Lenders “That was stronger than I’d expected,” would like to lend in the Northwest and Sioukas said. “I think that’s related to a Southwest. Just 16 percent each pre- Large 2.55% - National 5.14% 6.24% prediction on interest rate moves, their ferred the Northeast and Southeast, and Banks assessment of the Fed and their assess- about 25 percent expressed a preference ment of the economy in general. From a for the Midwest. Small 2.48% - National & 5.40% 5.96% personal standpoint, I think there’s still “That one was unpredictable,” Sioukas Reg. Banks pent-up demand.” said. “That was not something we knew Foreign Banks A majority – 56 percent – of the lend- or even had a good guess as to what the 1.45% - ers surveyed said they believe an interest answer was going to be. But those seem (by U.S. 5.66% branches) rate adjustment by the Fed will result in to be the targeted regions for the lend- Source: Federal Reserve, SBA Turn to ‘Poll’ on page 9 For use by original recipient only. It is illegal to forward or otherwise distribute without permission. THE ALTERNATIVE LENDING REPORT Industry News Why Is Asset-Based 100% growth in issuance over the year- Lending So Expensive? ago period. PeerIQ expects issuance to Editor & Publisher grow by 30% to $18 billion in 2018. bit. Steve Dresner There is a common belief, especially ly/2BivPuz among business borrowers, private equi- Managing Editor ty funds and M&A sponsors, that inef- SBA Lending Begins Steve Evans ficiencies leading to predatory pricing 2018 on High Note exist in the small-cap and lower middle Contributing Writers market business lending space. That The current fiscal year has already Teri Buhl assumption may be incorrect because the seen a record amount of loans backed William Freedman ABL cost structure is very different in by the U.S. Small Business Administra- Mark Henricks comparison to inexpensive bank lending. tion (SBA). The key lending program, Joao-Pierre Ruth bit.ly/2DWr1xY SBA 7(a) loans, surged nearly 20 per- cent year-on-year in dollar terms in the Production Editor Mulvaney Sets first quarter of the 2018 fiscal year. bit. Gary Newman Public Review of ly/2Ddzhf1 Entire CFPB Operations How Blockchain Will Mick Mulvaney, acting director of the Lenny La Sala Revolutionize Invoice- Consumer Financial Protection Bureau, Backed Financing has issued “a call for evidence” seeking Technology comment on how the bureau can fulfill One of the biggest risks in invoice Tarun Gupta its functions to best protect consumers. financing is fraud. Buyers often have Miguel Larreynaga The CFPB said it plans to publish a concerns over the legitimacy of an series of requests for information in the invoice, the power a given user has to Federal Register in the coming weeks. execute a transaction or even the pos- THE ALTERNATIVE LENDING REPORT bit.ly/2F0QBkT sibility of impersonation. In some cases, DealFlow Financial Products, Inc. the seller may have financed the invoice P.O. Box 122 Victory Park Eyeing repeatedly without the financiers being Syosset, NY 11791 Global Expansion aware of this. The use of distributed led- T (516) 876-8006 ger technology can put an end to these F (516) 876-8010 Chicago-based Victory Park Capi- concerns. bit.ly/2r4DKf0 [email protected] tal is reportedly looking at opportuni- www.alternativelending.io ties for expansion in global markets. Banks Cautious The Alternative Lending Report™ is published on every “For us, I see a worldwide opportunity,” Thursday, except on Thursdays where there is a holiday in Mulling Fintech during the week in which U.S. stock markets are closed. Brendan Carroll, senior partner and co- Subscription rate: $1,495 per year. Acquisitions founder said in an interview. He noted a All rights reserved. © 2018 DealFlow Financial Products, Inc. Photocopy permission is available sole- steady rise in “underbanked” populations Banks may be intrigued by fintech ly through DealFlow Financial Products. Copying, around the world. “I think the U.S. is a distributing electronically by email, or duplicating this innovations, but remain cautious when publication in any manner other than one permitted by massive, massive market, but I definite- considering M&A. Top officials at banks agreement with DealFlow Financial Products is pro- hibited. Such actions may constitute copyright ly think opportunities exist outside the have trouble gauging fintech targets’ earn- infringement and leave perpetrators subject to liabil- U.S.” bit.ly/2mYpsr1 ings power, and many find that there may ity of up to $150,000 per infringement (Title 17, U.S. code). AlternativeLending.io™ and The Alternative not be a cultural alignment. bit.ly/2r25gdl Lending Report™ are trademarks of DealFlow Finan- MPLs Set Record-Breaking cial Products, Inc. 4Q Securitizations of Lendio Joins Entrepreneur’s The Alternative Lending Report is a general-circula- tion publication. No information herein should be $4.4B; 30% Increase Franchise 500 construed as legal advice or to be recommendations to purchase, retain, or sell securities, or to provide Expected in 2018 investment advice of the companies mentioned or Lendio announced that it joined the advertised. No fees are accepted for publishing any ranks of Entrepreneur magazine’s Fran- editorial information. DealFlow Financial Products, Peer IQ reports 10 marketplace lend- Inc., its subsidiaries, and its employees may, from ing securitizations priced in the fourth chise 500. Lendio was also recognized as time to time, purchase, own, or sell securities or other investment products of the companies quarter totaling $4.4 billion, a record the #1 brand in the Business Financial discussed or advertised in this publication. for quarterly issuance, representing Services category. bit.ly/2r3pByH AlternativeLending.io 2 January 25, 2018 For use by original recipient only. It is illegal to forward or otherwise distribute without permission. THE ALTERNATIVE LENDING REPORT Industry News Fintechs Offer Views Amazon Lending U.S. SME Lending Builds on Open Banking to SMBs Tops Momentum: PayNet $3B in 2017 Zopa and Spotcap executives weigh Small business lending expanded in on the implications for fintech firms Amazon in a press release said it in November, according to the latest in the wake of new open banking laws, loaned more than $3 billion in 2017 U.S. Small Business Credit Monthly where individuals and businesses manage to small businesses operating on its Report from PayNet, a provider of small their finances by opening up access to platform. More than 300,000 SMBs business credit data and analysis. bit. the heretofore closely guarded reserves joined the platform last year and ly/2DvCDYE of transactional data held by the big more than 140,000 small businesses banks.
Recommended publications
  • Pushing Boundaries: the 2015 UK Alternative Finance Industry Report
    PUSHING BOUNDARIES THE 2015 UK ALTERNATIVE FINANCE INDUSTRY REPORT February 2016 Bryan Zhang, Peter Baeck, Tania Ziegler, Jonathan Bone and Kieran Garvey In partnership with with the support of CONTENTS Forewords 04 Introduction 10 About this study 12 The Size and Growth of the UK Online Alternative 13 Finance Market Market Size and Growth by Alternative Financing 14 Models Increasing Share of the Market for Business Funding 19 Market Trends in Alternative Finance 22 Expanding Base of Funders and Fundraisers 23 Market Entrants and Partnership strategies 25 Seeking Growth Through Awareness, Increased 26 Marketing and Forging Partnerships 27 Institutionalisation of the Market Cross-Border Transactions and Internationalisation 30 The Geography and Industries & Sectors of 31 Alternative Finance Industry Perspectives on Regulation, Tax Incentives 33 and Risks Size and Growth of the Different Online 38 Alternative Finance Models Peer-to-Peer Business Lending 39 Peer-to-Peer Business Lending (Real Estate) 40 Peer-to-Peer Consumer Lending 41 Invoice Trading 42 Equity-based Crowdfunding 43 Equity-based Crowdfunding (Real Estate) 44 Reward-based Crowdfunding 45 Community Shares 46 Donation-based Crowdfunding 46 Pension-led Funding 47 Debt-based Securities 47 Conclusion 48 Acknowledgements 50 Endnotes 51 3 ABOUT THE AUTHORS BRYAN ZHANG Bryan Zhang is a Director of the Cambridge Centre for Alternative Finance and a Research Fellow at the Cambridge Judge Business School. He has co-authored !ve industry reports on alternative !nance. PETER BAECK Peter Baeck is a researcher at Nesta, where he focuses on crowdfunding, peer-to-peer lending and the role of digital technologies in public and social innovation.
    [Show full text]
  • (P2p) Lending Model in Islamic Finance / Shariah-Compliant Form
    CAPCO ISLAMIC FINANCE CAPABILITY APPLICATION OF PEER TO PEER (P2P) LENDING MODEL IN ISLAMIC FINANCE / SHARIAH-COMPLIANT FORM INTRODUCTION Islamic finance is growing in prominence globally owing to strong interest from consumers due to both theological reasons and its strong ethos of ethical investing. In this environment it is imperative that participants in this sector consider avenues that help with growth acceleration and expanding consumer interest. One of the most interesting avenues for potential expansion is within the alternative finance market, specifically in the P2P lending segment. This paper aims to explore the viability of deploying the P2P lending model in a manner that remains true to the framework of Islamic finance principles such as RIBA (prohibition of interest) and Shariah (prohibition of certain product types). WHAT IS P2P LENDING? P2P lending is a form of finance that enables the exchange however there has been a significant uptick in the invoice of capital without the reliance on a conventional financial lending category for the last three years (From ~£310 million institution to oversee and manage the transactions. This format in 2016 to ~£1.1 billion in 2018)2, this is due to the strong enables the borrowers and lenders to interact directly, usually demand for this service from small to medium sized enterprises facilitated through a web application or platform. (SMEs) and is likely to surge due to the impact of to the socio- economic factors of the past year. P2P lending online can trace its origins to the UK with Zopa being the first firm to market this concept, followed by firms UK Overall Volume Growth (£) such as Prosper and Lending Club in the US.
    [Show full text]
  • Peer-To-Peer Lending Annual Report 2019
    PEER-TO-PEER LENDING STATE OF THE MARKET ANNUAL REPORT 2019 | WWW.ALTFI.COM UK MARKETPLACE ONLINE LENDING RETURNS IN THE FINTEX LISTED DIRECT ADVERTISED IMPAIRMENTS LENDING IN EUROPE REALITY WAY LENDING RETURNS AND DEFAULTS We follow the trends so you can stay ahead of them. P2: We are specialist advisers in the AlternativeRSM Finance space. At RSM, we make it our priority to understand your business so youADVERT can make confident decisions about the future. Experience the power of being understood. Experience RSM | rsmuk.com The UK group of companies and LLPs trading as RSM is a member of the RSM network. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm each of which practises in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 50 Cannon Street, London EC4N 6JJ. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. 3 INTRODUCTION PEER-TO-PEER LENDING: STATE OF THE UK MARKET After rapid growth from the ashes of the financial crisis, the alternative finance sector appears to be maturing. However, it faces internal and external challenges that will dictate the industry’s long-term viability and success.
    [Show full text]
  • Lendit-Pitch Deck FINAL
    The World’s Leading Event in Financial Services Innovation April 9-11 * Moscone West * San Francisco Fintech | Blockchain | Digital Banking | Lending Sponsor Prospectus The Big Picture Unparalleled Networking and Business Development Opportunities What’s New? ● 3 Days of Content and Networking ● BlockFin Summit dedicated to content, networking and experts in Blockchain for Financial Services ● Expanded 1:1 Meetings Services to help you schedule and meet everyone on your list. Your Decision Makers in One Location 1,700+ C-Level or Higher 5,000+ Focused on Financial Services Innovation 2000 PE, VC, Institutional Investors, Hedge Funds 1500 1000 Commercial, Digital, Regional 500 AI, Blockchain, 0 CXOs Vice Directors Digital Banking, & Founders Presidents & Managers Cryptocurrency, Payments, Lending, RegTech 2017 LendIt USA Stats Driven by Content Industry Pioneers take the Stage at LendIt “It’s never been more important to understand the enablers 350+ of our global mission and there’s no more important conference than LendIt in terms of understanding the power Speakers of technology and what’s happening in the financial world” Andrea Jung President and CEO Grameen America Ash Gupta Jackie Reses Antony Jenkins Richard Cordray Peter Thiel President, Global Credit Square Capital Lead Founder & Exec Chairman Director Entrepreneur, Investor Risk & Info Management Square Capital 10X Technologies CFPB Co Founder American Express PayPal Our Audience includes Everyone You Need to Meet 800+ 500+ Investors Banks 2017 LendIt USA Stats 5 Spotlight on
    [Show full text]
  • Marketplace Lending a Temporary Phenomenon? Foreword 1
    Marketplace lending A temporary phenomenon? Foreword 1 Executive summary 2 1. What is marketplace lending? 4 2. Marketplace lending: a disruptive threat or a sustaining innovation? 8 3. The relative economics of marketplace lenders vs banks 11 4. The user experience of marketplace lenders vs banks 23 5. Marketplace lending as an asset class 24 6. The future of marketplace lending 30 7. How should incumbents respond? 32 Conclusion 35 Appendix 36 Endnotes 37 Contacts 40 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. © 2016 Deloitte LLP. All rights reserved. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom.
    [Show full text]
  • A Case of Regulatory Evolution
    Forum A CASE OF REGULATORY successful integration of sector regulation, alongside continued government support for alternative finance. EVOLUTION – A REVIEW OF While many member states have opted for a “wait and THE UK FINANCIAL CONDUCT see” approach to crowdfunding regulation, the United Kingdom was of the first nations to create bespoke reg- AUTHORITY’S APPROacH TO ulation for crowdfunding activities. As the regulating CROWDFUNDING body that monitors and supervises crowdfunding ac- tivities in the UK is the Financial Conduct Authority (FCA)2, this article will centre on the regulatory regime that it has adopted. ROBERT WarDROP AND 1 The FCA defines crowdfunding as an umbrella term to TANIA ZIEGLER capture various “categories” of activity, some of which are regulated whilst others are not. The general defini- Introduction tion of crowdfunding, according to the FCA is “an inter- net-based business model […] in which people and busi- Across Europe, crowdfunding is quickly moving from a nesses (including start-ups) can try to raise money from fringe funding instrument to becoming a mainstream fi- the public, to support a business, project, campaign or nance channel, connecting “crowds” to fund businesses, individual” (FCA 2016a). This broad term includes four projects and individuals. In its recently published Report sub-categories: on Crowdfunding in the EU Capital Markets Union, the European Commission details the importance of crowd- • Donation-based crowdfunding: people give funding as “an important source of non-bank financing money to enterprises or organisations whose activi- in support of job creation, economic growth and com- ties they want to support. petitiveness” (European Commission 2016).
    [Show full text]
  • Links to Gender Diversity Targets
    Commitments of the Women in Finance signatories as at November 2018 Signatories (links to Signed Commitment Progress gender diversity targets) 10x Future July 2017 Committed to promoting diversity Technologies Ltd and creating an inclusive culture. Aberdeen Asset July 2016 • 42 – 45% of UK employees to Management be female by 2022. Within this, the goal is to increase female representation at senior management level to between 31 – 33%. • Also setting a target of 47% of global population to be female by 2022, with a variance factor of 2%. Admiral Group July 2018 To be announced AE3 Media July 2018 To be announced. Affinity Capital July 2016 Ensure at least 75% of senior Met target before management team remains signing. female. Ensure at least 50% of our shareholders are female. Ageas UK March By 2021, 35% women in senior 2017 management. AIB UK November At least 30% women in senior roles 2016 by 2021. Aldermore Group plc July 2016 • 30% of senior managers will be female by 2020. • Gender split of the Bank will remain broadly 50%. Allianz Insurance November By 2020, minimum 35% female 2017 representation across management. American Express November To be announced. 2018 Armstrong Wolfe July 2018 To be announced. Aon March To be announced. 2018 Employment/000005-00011/-1/JOXB JOXB(LDNL31659) L_LIVE_EMEA1:39978898v1 Signatories (links to Signed Commitment Progress gender diversity targets) Association for November By January 2021, 30% of female Financial Markets in 2017 representation in senior Europe management. Association of March By March 2022, 40% women in Accounting 2017 senior management. Technicians Association of British July 2016 By 30 June 2019: Met in 2017: Insurers (ABI) • 45%/55% female to male 45% by 2019 gender split across management positions.
    [Show full text]
  • Marketplace Lending Verso Nuove Forme Di Intermediazione Finanziaria?
    Quaderni FinTech Marketplace lending Verso nuove forme di intermediazione finanziaria? A. Sciarrone Alibrandi, G. Borello, R. Ferretti, F. Lenoci, E. Macchiavello, F. Mattassoglio, F. Panisi 5 luglio 2019 Nella collana dei Quaderni FinTech sono raccolti lavori di ricerca relativi al fenomeno «FinTech» nei suoi molteplici aspetti al fine di promuovere la riflessione e stimolare il dibattito su temi attinenti all’economia e alla regolamentazione del sistema finanziario. Tutti i diritti riservati. È consentita la riproduzione a fini didattici e non commerciali, a condizione che venga citata la fonte. CONSOB 00198 Roma - Via G.B. Martini, 3 t +39.06.84771 centralino f +39.06.8477612 20121 Milano - Via Broletto, 7 t +39.02.724201 centralino f +39.02.89010696 h www.consob.it e [email protected] ISBN 9788894369755 Marketplace lending Verso nuove forme di intermediazione finanziaria? A. Sciarrone Alibrandi, G. Borello, R. Ferretti, F. Lenoci, E. Macchiavello, F. Mattassoglio, F. Panisi (*) Sintesi del lavoro Il marketplace lending è uno fra i fenomeni più interessanti in ambito FinTech, non solo per la rapidità con cui negli ultimi anni, specie in Paesi diversi dall’Italia, è venuto ad espandersi in termini di volumi (sia pure ancora limitati quanto a valore assoluto), ma soprattutto per il carattere innovativo dei modelli di business in cui il fenomeno stesso si traduce: modelli in grado di mettere in discussione consolidate partizioni e categorie del settore finanziario, ponendo rilevanti questioni dal punto di vista della strategia regolatoria. Si tratta di una forma di finanziamento alternativa a quelle tradizionali e riconducibile, per un verso, all’applicazione al settore dei servizi finanziari di tecniche di intermediazione digitale sviluppate nell’e-commerce e, per un altro, al più ampio ambito del crowdfunding.
    [Show full text]
  • Diverse Economies of Debt: the Possibilities for Socially Useful Finance in Peer-To-Peer Finance and Reward-Based Crowdfunding
    Diverse economies of debt: The possibilities for socially useful finance in peer-to-peer finance and reward-based crowdfunding. by Gemma Bone Dodds A thesis submitted to Newcastle University for partial fulfilment of the requirements for the degree of Doctor of Philosophy in the School of Geography, Politics and Sociology Newcastle Upon Tyne, March 2019 Author’s Declaration I declare that this thesis is my own account of my research and contains as its main content work which has not previously been submitted for a degree at any tertiary education institution. Gemma Bone Dodds iii iv Abstract In the wake of the global financial crisis of 2007–8 and the persistence of mainstream forms of finance, this thesis aims to explore the possibilities for achieving more socially useful forms of finance with particular reference to case studies of peer-to-peer lending and reward-based crowdfunding in the United Kingdom. The thesis is situated within the diverse economies theoretical approach to human geography. Despite the centrality of finance to the wider economy, diverse economies theory has to date largely neglected finance. As such, the social relation of credit-debt that sits at the heart of money and finance has not been theorised in ways that foreground the diversity of ‘the social’ and open out political possibilities. The thesis analyses the diverse social relations of credit-debt as relatively discrete processes composed of spatial, temporal and subjectivity-creation practices. Peer-to-peer lending and reward-based crowdfunding are shown to assemble particular kinds of socialities that not only shift over time in relation to the mainstream, but which also exhibit the persistent tensions and possibilities that mark more socially useful forms of finance.
    [Show full text]
  • Pushing Boundaries
    PUSHING BOUNDARIES THE 2015 UK ALTERNATIVE FINANCE INDUSTRY REPORT February 2016 Bryan Zhang, Peter Baeck, Tania Ziegler, Jonathan Bone and Kieran Garvey In partnership with with the support of CONTENTS Forewords 04 Introduction 10 About this study 12 The Size and Growth of the UK Online Alternative 13 Finance Market Market Size and Growth by Alternative Financing 14 Models Increasing Share of the Market for Business Funding 19 Market Trends in Alternative Finance 22 Expanding Base of Funders and Fundraisers 23 Market Entrants and Partnership strategies 25 Seeking Growth Through Awareness, Increased 26 Marketing and Forging Partnerships 27 Institutionalisation of the Market Cross-Border Transactions and Internationalisation 30 The Geography and Industries & Sectors of 31 Alternative Finance Industry Perspectives on Regulation, Tax Incentives 33 and Risks Size and Growth of the Different Online 38 Alternative Finance Models Peer-to-Peer Business Lending 39 Peer-to-Peer Business Lending (Real Estate) 40 Peer-to-Peer Consumer Lending 41 Invoice Trading 42 Equity-based Crowdfunding 43 Equity-based Crowdfunding (Real Estate) 44 Reward-based Crowdfunding 45 Community Shares 46 Donation-based Crowdfunding 46 Pension-led Funding 47 Debt-based Securities 47 Conclusion 48 Acknowledgements 50 Endnotes 51 ABOUT THE AUTHORS BRYAN ZHANG Bryan Zhang is a Director of the Cambridge Centre for Alternative Finance and a Research Fellow at the Cambridge Judge Business School. He has co-authored five industry reports on alternative finance. PETER BAECK Peter Baeck is a researcher at Nesta, where he focuses on crowdfunding, peer-to-peer lending and the role of digital technologies in public and social innovation.
    [Show full text]
  • Peer to Peer Lending Report
    PEER TO PEER LENDING REPORT Accredited for CPD by CISI, CII, PFS OPENING STATEMENT Welcome to this in-depth report on Peer to Peer Lending. (“P2P”). TISA has long been interested in the potential Individuals can earn competitive interest Editorial of Peer to Peer Lending (P2P) and lobbied from peer to peer lending, albeit with risk, Daniel Kiernan successfully for P2P to be included within ISAs. and borrowers can be matched directly with Lisa Best willing lenders, either directly or through a Peer to peer lending enables lenders to be pool of lenders. This can be more flexible than Ryan Zeng matched directly with borrowers, whether borrowing through traditional banks, both individuals or businesses through online in speed of offer and lower fees, and interest services. Peer to peer lending companies rate. Borrowers do not have to pay for the Creative operate entirely online, so they can operate traditional infrastructure of banks, including with lower overheads and provide the service Mar Alvarez lots of High Street premises. more cheaply than traditional financial institutions like banks. Competition ecourages traditional banks to improve their offerings to savers (lenders) Sub-editing As a result, lenders can often earn higher and borrowers. In the meantime, savers can returns than from banks, while borrowers can Daniel Kiernan get better rates, and the opportunity to get borrow money at lower interest rates, even involved in backing businesses, though many Lisa Best after the P2P lending company has taken a savers choose not to. Borrowers get access to Ryan Zeng fee for providing the service and carrying out cheaper and more flexible finance.
    [Show full text]
  • PS19/14: Loan-Based
    Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms: Feedback to CP18/20 and final rules Policy Statement PS19/14 June 2019 PS19/14 Financial Conduct Authority Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms: Feedback to CP18/20 and final rules This relates to Contents Consultation Paper 18/20 1 Summary 3 which is available on our website at 2 Changes for P2P platforms 9 www.fca.org.uk/publications 3 Investment-based crowdfunding platforms 32 Email: 4 P2P platforms: mortgages and home finance 33 [email protected] Annex 1 List of non-confidential respondents 35 Annex 2 Abbreviations used in this paper 37 Appendix 1 Made rules (legal instrument) 2 PS19/14 Financial Conduct Authority Section 1 Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms: Feedback to CP18/20 and final rules 1 Summary 1.1 In July 2018, we consulted on changes to the rules and guidance that apply to loan- based crowdfunding platforms (P2P platforms). We also discussed existing rules that apply to investment-based crowdfunding platforms (IB platforms). 1.2 This Policy Statement (PS) summarises the feedback we received to our consultation (CP18/20) and sets out the final policy positions we have reached, taking into account the feedback we have received. It also contains the final rules, which implement the policy decisions that have been made. 1.3 Having considered the feedback we received, we have decided to implement most of our original proposals, but have made modifications in some areas to provide more clarity and regulatory certainty.
    [Show full text]