The Lending Well withdraws from payday market

March 30th, 2013
The Lending Well

The Lending Well has announced it has widthdrawn from the payday loan market.  They attribute this decision to the difficulty in finding "high quality" borrowers within this market.  The total interest on a payday loan as a percentage of the capital lent may not be huge over the month which the money is lent, the interest rate - when compounded - is astronomical.  The OFT recently told payday lenders to improve following "widespread irresponsible lending" and therefore a responsible lender may find it difficult to operate within this market.

Here is the full statement which was sent by email on 29th March 2013:

Dear Lender,

Firstly, please let me say thank you for joining and supporting The Lending Well.

We know you have felt the frustrations of the speed of lending, which is a direct result of maintaining our strict lending policy and our commitment to lending responsibly.

It has continued to be a challenge to find high quality borrowers in the PayDay market especially as we have kept to our commitment not to relax our underwriting criteria. It is important to us that The Lending Well is an ethical and responsible lender and also that our lenders avoid any loan that may go into default.

Therefore, we have made the decision to cease lending in the PayDay market and concentrate on the development of a new product. We will make an announcement in time.

If you have any questions please do not hesitate to contact us at [email protected].

Once again, the The Lending Well team would like to thank you for the tremendous support and belief in us and we will get back to you with details of the new opportunity.

With best wishes


Tim Slesinger
Founder and CEO
The Lending Well

We look forward to the relaunch of The Lending Well with their "new product" and we will keep you posted.

Government lending through Funding Circle

March 25th, 2013
Funding Circle

Funding Circle have announced that the UK government have started to lend through Funding Circle as of today.

Here is their full statement, repeated on the Funding Circle forum:

Today, we’re pleased to confirm that the process with the Department for Business Innovation and Skills (BIS) has been completed, contracts have been signed and from Monday 25th March, the Government will start lending.

Before this begins, however, we wanted to update you all on how this will work and why we believe Government involvement will increase awareness of Funding Circle in the business community and consequently provide more lending opportunities for investors.

How will lending work?

From Monday, the Government will start lending to all businesses which meet their criteria (more details on this are available in our FAQs). They will fund each loan at a set amount which will be fixed at any point of time.

This will start at 20% of the total loan amount, as shown in the picture below, and will decrease over time as the £20 million runs down and the value of loans being accepted through Funding Circle increases.

The remaining 80% of a loan will be funded in the normal way and your lending experience will stay the same. Once a loan closes, the Government will fund the 20% at the average interest rate of all successful bids on that specific loan.

The Government will only take part in new loan requests and will not purchase any loan parts from existing investors.

Will this affect opportunities to lend?

Since the Government first announced plans to lend through Funding Circle we have seen an upsurge in interest from businesses. Many businesses have told us that this is directly as a result of the Government news.

Interest from businesses has particularly picked up over the last two months. As result, in the last 30 days there have been more opportunities to lend than ever before with £10m being lent to more than 170 different companies. The Government’s involvement will also allow us to list larger loans on to the marketplace and as such we have increased the upper loan limit to £1 million.

There is approximately £7 billion of lending to businesses every month in the UK, so the opportunities remain significant. We will be working hard over the coming months and focusing our efforts on attracting more businesses to join Funding Circle.

Demand for loans through Funding Circle has recently increased and caught up with the additional supply that had suppressed returns to lenders.  While 20% may seem a large figure, demand is growing at tripple digits per annum, so this should not have a major impact to lenders in the medium term.  With the additional press coverage, and the increase in the maximum loan to £1M, this should bring in additional borrowers.


More councils to lend on Funding Circle ?

March 25th, 2013
Funding Circle

The P2P money website picked up on a tweet from that Camden Council and 10 others and are to fund small and medium enterprises through Funding Circle.  It was back in November 2012 when the P2P money website reported that Lancashire Council had teamed up with Funding Circle to do the very same.

At a time when businesses are finding it difficult to obtain funding, it is encouraging to see councils supporting this sector, which is one of the very few providing any growth in financial services.

For the latest news, be sure to follow @P2PMoneyUK on Twitter and keep up to date with the P2P money Twitter feed on the P2P money website.

New entrants in the P2P market

March 20th, 2013

The first quarter of 2013 has brought no less than four new entrants to the P2P market, and there are at least two more companies preparing to launch.  These new entrants are Mayfair Bridging who specialize in bridging loans, Folk2Folk who specialize in commercial and buy-to-let mortgages, Assetz Capital who specialize in loans to small and medium enterprises and Funding Secured who specialize in secured lending to businesses.  The two companies still in the pre-launch phase are CivilisedMoney and Lend Loan Invest, who we have mentioned previously.

From the lender's perspective, Mayfair Bridging, Folk2Folk and Funding Secured are all targeting the higher net worth individuals, whereas Assetz Capital, Civilised Money and Lend Loan Invest are targeting the "retail lender" with minimum loan amounts in the tens of pounds rather than the tens of thousands of pounds.

Details of Mayfair Bridging and Folk2Folk are shown on the companies page of the P2P money website, and details of the others will be available shortly.

This is proving to be an exciting year for peer-to-peer lending with an industry that is growing at a huge rate compared with the economy as a whole.

Funding Circle passes the £80million mark

February 27th, 2013
Funding Circle

Funding Circle have passed another milestone by arranging a total of £80million in peer-to-business loans.  It was back in September 2012 when they broke the £50million mark.  Back then we calculated they were growing at a phenomenal 240% per annum.  We can now revise down this growth to 160% per annum, but this is still an amazing figure given the economical climate.

We can also publish that also in the last 5 months the peer-to-peer industry in the UK was growing at a rate of 90% per annum (this figure is based upon outstanding loan capital between September 2012 and February 2013).  This must be the one growth market within the financial services sector.