You may have seen the news about our £18.75 million funding deal with Scottish Investment Bank (SIB) and NIBC to help fund the ambitions of small and medium-sized business across Britain. Here we answer some questions about this unique partnership.
Which loans will SIB and NIBC invest in?
We have used our proprietary technology to randomly select the loans in which SIB and NIBC will invest. Rather than investing in loan parts, they will fund entire loans. As a result, the loans in which SIB and NIBC invest will not appear on our Loan Market.
Will SIB and NIBC be able to select loans?
No. Our platform will randomly and automatically allocate a proportion of loans for SIB and NIBC to invest in.
Will they receive a better return than other investors?
No. Under Financial Conduct Authority rules, we can’t offer preferential treatment to any investor. The rates that SIB and NIBC lend at will be consistent with the applicable Credit Band for each loan. This does not mean the rate will be the highest or lowest available within the applicable Credit Band. We credit assess every loan before our system randomly allocates which ones will be allocated to SIB and NIBC.
What if one of their loans falls into arrears?
Loans in which SIB and NIBC invest will follow the same default process as all our other loans.
Can I see which loans SIB and NIBC have invested in?
Just as other investors can’t see your portfolio, you won’t be able to identify the loans in which SIB and NIBC have invested. We will continue to make our full loan book available for download.
Does this mean there will be fewer loans to invest in?
No – our platform is growing rapidly. We are seeing record levels of demand for finance from businesses. This deal will enable us to support even more successful and established SMEs the length and breadth of the country. The recent launch of our AutoBalance feature also means that increasing numbers of loan parts will be available on our Loan Market.
Please remember that your capital is at risk when lending to businesses. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.
If you have any other questions, please email us at firstname.lastname@example.org or call 0345 564 1600.