Sector-wide growth rate continues to creep upwards
An exciting new entrant into the Alternative Finance bracket emerges
An especially strong month for Wellesley & Co.
The Index’s original six participating platforms produced a February growth rate of 7.70% between them – up from 7.06% the previous month. Among our more recent entrants, sector expansion remained relatively constant: 8.19% in January, 8.22% in February. It will be a few weeks before we can determine industry growth rates with the newest of our newcomers in mind (i.e., Clifton, Seedrs). These sector-wide growth rates are a simple reminder that AltFinance platforms are edging further into the mainstream with each passing month.
We typically divide alternative finance into three broad categories: peer-to-peer lending, crowdfunding, and invoice trading. It may be time to add a fourth. Pension-led funding (PLF) is a rapidly growing source of unconventionally sourced finance for businesses. The unique service is being provided by Clifton Asset Management, and has to date supplied a whopping £210.5 million for UK companies. This is enough to establish PLF as an alternative finance bracket unto itself – and a significant one at that. Adam Tavener, Chairman of Clifton Asset Management, provided an explanation of the service:
“Pension-led funding uses directors’ personal, existing pension funds to raise capital for their business. It provides finance without having to give a personal guarantee to a lender and can provide protection for business assets held within the pension scheme.
Funds are deployed from existing pensions on an approved commercial basis and repaid to the scheme with interest at a commercial rate. Typically this is achieved by the pension making a loan to, or purchasing an asset from, the business, with it subsequently making loan/ lease payments back.
This methodology utilises value in commercially owned assets including intellectual property to secure these funds. All funding is repaid via loan payments over a fixed term or lease payments as agreed by the trustees and at an agreed commercial rate, providing a chance for real growth for the pension scheme.”
Finally, Wellesley & Co. have well and truly flown out of the gates. After an impressive few months since launching, the p2p lending platform has now leaped from a loans funded figure of roughly £4.5m on February 1st, up to just shy of £8m today! Such a marked increase is testament to the service provided by the platform, which we believe distinguishes itself through being able to offer a superior level of investor protection. Graham Wellesley, Chairman and Joint CEO of Wellesley & Co., commented on the good news:
“We are focusing on the middle and lower end of the borrowing market (£1m-£10m) and the market has confirmed our suspicions that this area is underserviced.
Being able to quickly process and commit to lending opportunities, our clients find us a reliable source of capital.
Rates of Growth we would expect to continue and our target loan book is £100m in the short to medium term”.
You can view this month’s stats for yourself below:
At February 1st
At March 1st
Zopa
459,875,710
479,400,900
4.80%
4.25%
Ratesetter
167,015,622
182,311,494
10.80%
9.16%
Funding Circle
211,100,520
231,582,680
6.46%
9.70%
ThinCats
53,870,000
58,382,000
11.38%
8.38%
Market Invoice
112,844,477
130,000,000
10.25%
15.20%
Rebuildingsociety
3,689,969
4,394,019
10.84%
19.08%
Total
1,008,396,298
1,086,071,093
7.06%
7.70%
CrowdCube
17,574,970
19,856,520
6.59%
12.98%
Platform Black
37,980,377
41,586,832
7.18%
9.50%
Assetz Capital
14,267,335
17,202,495
22.81%
20.57%
Wellesley & Co.
4,553,500
7,919,606
14.83%
73.92%
FundingKnight
3,868,000
4,378,000
12.02%
13.19%
LendInvest
26,395,451
27,476,600
65.90%
4.10%
Total
1,113,035,931
1,204,491,146
8.19%
8.22%
Clifton Asset Management
210,550,002
Seedrs
6,100,000
Total
1,421,141,148
