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New entrant Squirrl.com
A new heavyweight peer-to-business provider has launched in the UK with an innovative business model, called Squirrl.com. Here is their introduction.
Squirrl.com provides a platform for well established Suppliers (seeking finance) that provide assets to their Customers through which services are supplied and paid for over a period of time. This can be seen in the motor industry, industrial machinery, office equipment, mobile-phones, vending machines etc. If the Supplier has no other financial arrangements in place they must pay for the equipment at the start of the contract and only receive their money back over the life of the agreement. Few companies can suffer the impact of this negative cash flow, yet customer demand is continuing to grow for this type of service. In the Squirrl community you invest in established Suppliers secured against a portfolio of at least 20 high quality Pay For Use Agreements. So you can earn attractive rates of return at the lowest possible level of risk, and Customers get the equipment needed for their organisation. Squirrl.com has worked hard to develop a 13 point risk minimisation strategy to help ensure the security of investments and make saving as risk free as possible. Everyone wins with the Squirrl.com way of saving.
This model is perhaps closest to MarketInvoice (who we haven't covered as they focus on institutional investors and high net worth individuals). With Squirrl.com's minimum loan segment of £25 opens up this arena to all peer-to-peer lenders. Taking to Sophie Coles, Director of Business Development at Squirrl.com, she reiterates this is a secured investment with expected bad debts significantly below 1%.
All security contracts are either with the public sector (schools, health care, universities, councils etc) or large quoted public companies. On top of that we use a monitor called the Gross Receivables Percentage (GRP) this ensures that there is always a greater amount of cash flow available than the loan plus interest. As the investor has a first call on this cash flow it follows that at a 50% GRP then up to 50% of the security could go before a loss was declared.
This is another exciting development in peer-to-peer lending and we look forward to watching this sector expand.