LendingCrowd snags £2.75m from Scottish Enterprise
Scottish Enterprise, Scotland’s main economic development agency, commits £2.75m to Scotland’s biggest peer-to-peer lender.
LendingCrowd, an up-and-coming business lending platform which is headquartered in Edinburgh, has clinched £2.75m in loan capital from Scottish Enterprise. The investment will be made by Scottish Enterprise’s investment arm, the Scottish Investment Bank (SIB).
The investment marks the SIB’s first foray into the alternative lending market, as it seeks to boost and broaden the variety of funding available to small business in Scotland. The £2.75m is expected to stimulate up to £35m in lending to Scottish SMEs – as all of the money will be co-invested alongside other investors on the platform.
The SIB agreement covers loans to small businesses of between £5k and £250k, with terms ranging from six months to five years.
“Under our expanded remit, we are increasing the diversity of finance provision in Scotland, and this new initiative with LendingCrowd is the first example of how we are opening up innovative sources of alternative funding to Scottish SMEs,” said Kerry Sharp, head of the SIB.
LendingCrowd, to some the Funding Circle of Scotland, has facilitated £7m in lending since launching in 2014, with over 2,000 investors signed up to the platform.
The deal between the SIB and LendingCrowd is reminiscent of the funding commitments that have been provided to Funding Circle by a range of government entities over the years. These include commitments from the British Business Bank, a number of local councils, and even through to supranational groups like the European Investment Bank.
“Our groundbreaking agreement with Scottish Enterprise, one of the first initiatives of its kind in Europe, will help to fund the next stage of growth for some of Scotland's most exciting SMEs,” said Stuart Lunn (pictured above), CEO and co-founder of LendingCrowd. “This recognises the increasing importance of peer-to-peer access to finance and, in practical terms, will allow a significant number of small to medium-sized businesses the chance to pursue their ambitions to expand and compete in the UK and internationally.”