Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses its internal reserves to satisfy its necessity for cash, while the term financing is used when the firm acquires capital from external sources.
Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Peer-to-peer lending companies often offer their services online, and attempt to operate with lower overhead and provide their services more cheaply than traditional financial institutions. As a result, lenders can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates, even after the P2P lending company has taken a fee for providing the match-making platform and credit checking the borrower. There is the risk of the borrower defaulting on the loans taken out from peer-lending websites.
Zopa Bank Ltd. is a British online bank which offers deposit accounts, personal loans and credit cards. It began as the world's first peer-to-peer lending company in 2005 and gained a full banking licence in 2020. The peer-to-peer side of its business closed in December 2021.
The Enterprise Finance Guarantee (EFG) is a UK government-guaranteed lending scheme intended to help smaller viable businesses who may be struggling to secure finance, by facilitating bank loans of between £1,000 and £1 million.
Funding Circle is a commercial lender. Originally it was a peer-to-peer lending marketplace that allowed the public to lend money directly to small and medium-sized businesses. Through this exchange businesses access lower costs of financing than they would get at a bank and the public are able to become lenders and in doing so make a return on their capital. It closed its lending option to "retail investors" between 2020 and 2022, and then announced, in March 2022, that it had made the closure permanent.
RateSetter is a British personal loan provider, founded in 2009 as one of the pioneers of peer-to-peer lending. The London-based company traded in the United Kingdom and through a locally-owned and run business in Australia. The UK business was acquired by Metro Bank in September 2020, leading to closure of the peer-to-peer products in April 2021.
La Trobe Financial is an Australian credit asset management firm specialising in asset management and credit. It offers real estate credit, investment account offerings and private wealth management. The CEO is Mr. Chris Andrews. La Trobe Financial's head office is located in Melbourne, with corporate offices in Sydney, Shanghai and Hong Kong.
Rebuildingsociety.com is a Leeds-based peer-to-peer lending platform, founded in 2012 by Daniel Rajkumar, to facilitate the online arranging of finance between lenders and small and medium-sized enterprises. The first loans were completed in February 2013.
Assetz Capital is a British company which makes property-secured loans to businesses. It was established in 2012 as a peer-to-peer or "marketplace" lender which allowed private and institutional investors to lend money directly to small businesses (SMEs) and property developers. In December 2022 it became solely funded by institutional capital for new lending.
Capital for Enterprise Limited (CfEL) was a limited company in the United Kingdom owned by the Department for Business, Innovation and Skills (BIS). CfEL was responsible for managing BIS's financial schemes, such as venture capital funds and loan guarantees, aimed at helping small and medium enterprises (SMEs). It invested over £1.8 billion from its formation and alongside private capital provided £6.5 billion in credit for SMEs. It ceased operating independently on 1 October 2013 and became part of the British Business Bank.
LendInvest is a non-bank mortgage lender in the UK, and is a property lending and investing platform. As an alternative Fintech lender in the property market, LendInvest provides finance to property professionals and small and medium-sized businesses (SMEs) around the UK. It also makes it possible for individuals, corporates and institutions to invest in secured property loans originated and underwritten by its mortgage team.
British Business Bank plc (BBB) is a state-owned economic development bank established by the UK Government. Its aim is to increase the supply of credit to small and medium enterprises (SMEs) as well as providing business advice services. It is structured as a public limited company and is owned by the Department for Business and Trade. The bank has its headquarters in Sheffield.
Peerform is a peer-to-peer lending company based in New York City, which matches prime and near-prime qualified borrowers in the United States to accredited high net worth and institutional investors on its online platform. Its algorithm to determine loan eligibility focuses on a variety of factors including but not limited to FICO scores. In January 2011, Peerform raised $1.3 million during an angel funding round. In April 2014, Peerform raised $1.1 million in a seed funding round led by Corporest Development, a European investment firm.
The House Crowd was a UK peer to peer lending and crowdfunding platform that allowed people to invest in bridging loans and property development loans from £1,000. In 2018, the business achieved authorisation from the Financial Conduct Authority and launched their Innovative Finance ISA. As of January 2019, The House Crowd had funded 368 properties, raised over £93 million and paid investors returns in excess of £38 million. The House Crowd was placed into administration on 24 February 2021.
FOLK2FOLK is a Marketplace lending platform (MPL) specializing in secured lending for business owners across the rural and regional parts of the UK. It matches businesses looking for capital with individual (retail) and institutional investors who receive a fixed interest rate from 7.5% p.a. secured against UK land or property. Investors receive the same interest rate that the Borrower pays, with FOLK2FOLK making its profit from an arrangement fee and annual renewal fee charged to Borrowers.
Ezubao was a peer-to-peer lending scheme based in the eastern Chinese province of Anhui. It was set up as an online scheme in July 2014, attracted funds of about 50 billion yuan from 900,000 investors, and ceased to trade in December 2015. On 1 February 2016, the scheme was closed down and 21 involved people were arrested. Zhang Min, the president of the parent company, Yucheng Global, told investigators that the company operated as a Ponzi scheme. Following its establishment, Ezubao grew rapidly, masquerading as a legitimate investment opportunity while operating under the guise of peer-to-peer lending. Revelations about the fraudulent nature of Ezubao’s operations emerged after an exposé in late 2015, leading to public outcry and intensified scrutiny by regulatory authorities. The scale of Ezubao’s Ponzi scheme, which orchestrated a sophisticated ruse involving fake projects and returns, was unprecedented in China, contributing to an estimated loss of billions of yuan for investors. The scandal not only devastated the finances of nearly a million individuals but also prompted a nationwide tightening of regulations on the peer-to-peer lending industry, aiming to close loopholes and restore investor confidence.
Funding Societies is a Southeast Asia’s digital financing platform for small and medium-sized enterprises (SMEs), headquartered in Singapore. It was the first such platform in Singapore to engage an escrow agency to independently and safely manage investors’ funds. In Indonesia it is known as Modalku. Since its launch, it has disbursed more than US$2.6 billion in business financing to MSMEs through more than 5.1 million loan transactions.
LandlordInvest is a peer-to-peer lending platform that enables people to invest in residential, commercial, and semi-commercial bridging and development loans. The platform's target audiences are professional property investors and landlords. It was the first residential property-backed Innovative Finance ISA made available to UK savers.
Capital Match is a invoice financing platform for small and medium enterprises (SMEs) in Southeast Asia. Headquartered in Singapore, it operates an online platform for SMEs to seek funds from investors.
Judo Bank is an Australian neobank focused on small and medium-sized enterprise lending but also offers a range of personal term deposit products to consumers.
