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Peer Funding Limited, a recently established UK peer-to-peer business lending platform, announced it has obtained full authorization from the Financial Conduct Authority (FCA) and would start its activities in the autumn of 2016.
According to the company, the full authorization would allow Peer Funding to launch a new and differentiated platform in the UK P2P business funding sector. The platform’s goal is to be a one stop shop for various types of business loans spanning from 1 to 60 months, as well as asset backed security options and more investor choice.
Here are some of the conditions of the business loans that will be available once the platform launches:
“Gaining full authorisation from the FCA to operate a p2b platform is a significant milestone and achievement for Peer Funding Limited. It has taken considerable effort to get to this stage. Unlike many of the existing players in this market who are trading under interim permission, the service offering from Peer Funding Limited has been built from the outset with regulation in mind giving the company a solid base from which to operate and setting up a well-defined framework from which to grow,” said Risk and Compliance Director of Peer Funding, Roger Smith.
Currently Peer Funding is offering early bird registration on its website. The pre-launch offer applies to the first 150 qualifying registrants on a first come first served basis.
Peer-to-peer lending is a method of debt financing that enables individuals and companies to borrow and lend money without a financial institution as an intermediary, thus removing the middleman. Usually the P2P lending works through an online platform that matches borrowers and lenders and connects them.
This makes the loan for the borrower cheaper and the return for the lender higher than more traditional types of investment. It, however, is somewhat riskier than the traditional method, especially for the lenders.
The three largest P2P lending companies in the UK are Zopa, which was the first to launch – back in 2005, RateSetter and FundingCircle. As of 2014 the P2P lenders have to be authorized by the FCA. According to some data, in 2015 those companies in the UK collectively lent more than £3 billion to consumers and businesses.