Crowdfunding for Debt

I have been following the crowdfunding market very closely over the last 12-18 months.

One area that has fascinated me is the use of crowdfunding for debt products. Interest rates at 0.5% don’t really support the income requirements of lots of individuals in the UK. Crowdfunding (which I accept is more risky than bank deposits) is an interesting area for consumers who feel that they are willing to take a little more risk.

The size of business and the serviceability have been a big issue over the last 12 months, but we are seeing more mainstream businesses adopting crowdfunding for their needs. This is a classic example of disruption of financial services (traditionally people and infrastructure heavy) to marketplace models.

Although not for everyone we managed to complete a £1.5m debt finance with LendingCrowd recently that helped fund a management buyout. We were attracted by the ability to introduce funders that would normally have to provide the whole part of the debt to the deal.

You can read more about this at The Scotsman.

There is an excellent video about the future of crowdlending by Samir Desai

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