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Association of Alternative Business Finance launches




By Ryan Weeks on 1st February 2017

Source: https://goo.gl/D3PemW

New association breaks cover, John Davies of The Just Loans Group appointed Chairman.

 

The Association of Alternative Business Finance has officially arrived, after months of speculation. The organisation has been formed to champion best standards across the small business lending space.

 

The founding members – as reported by AltFi earlier in January – are Capify UK, Catalyst Finance, Credit4, Fleximize, Liberis, The Just Loans Group and YesGrowth. The group’s members will be required to adhere to four key operating principles: transparency, responsibility, fairness and security.

 

“A vibrant and diverse alternative lending sector has successfully established itself in the UK and we feel the time is right to give it a voice and promote best standards of industry practice,” said newly appointed Chairman John Davies (pictured above). “Not surprisingly our operating principles lean heavily on the well-established British Bankers Association Lending Code.”

 

Davies also spoke of the AABF logo acting as a kind of kitemark for alternative lenders going forwards. He said that the logo will provide some assurance to prospective borrowers that members of the association “embrace responsible lending”.

 

There is a notable absence of peer-to-peer lenders among the AABF’s founding members, but we understand that the organisation is open to peer-to-peer lenders joining. Until now, there has been a shortage of associations within the direct lending sector, while their peer-to-peer counterparts have been well catered for by the Peer-to-Peer Finance Association and UK Crowdfunding Association.

 

The AABF has said that it will aim to work closely with established finance associations, but Davies stressed that the body “will enable alternative lenders to speak with a common voice, promote best practice and influence how the sector develops”.

 

One of the organisation’s first planned steps is to create and subscribe to a centralised database for personal guarantees, which it hopes will help to flag fraudulent activity.

 

Members weigh in

 

“Capify US was a founding member of the Small Business Finance Association (SBFA), a non-profit alternative lending industry trade association in the United States, that has focused strongly on sharing data to help prevent merchants that have defaulted on SBFA members as well as potential businesses trying to defraud members, saving millions of dollars in potentially bad transactions through the years. The AABF’s proposed PG database system will be a valuable tool for all association members.” – Tony Pegg, UK MD of Capify UK

 

“Over the last few years, alternative lending in the UK has gone from strength to strength, and has become a viable source of funding for hundreds of thousands of SMEs. It is great to see the country’s leading SME lenders come together to share and promote best lending practices, improve security and transparency, and help shape the future of business finance in the UK.  We are excited to be a founding member of AABF, and look forward to working with everyone involved on achieving the association’s goals.” – Max Chmyshuk, co-founder and managing partner of Fleximize 

 

Comments

Tony Duggan

01 Feb 2017 02:59pm

The International Association of Alternative Finance, has been in operation for over 3 years and leads the way in establishing standards for alternative business finance iaafin.org working with the Bank of England, FCA, Federation of Small Business and others.


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