Funding Circle, an online lending marketplace dubbed Zopa for small businesses that lets firms and savers bypass banks, has launched in the UK.
With banks accused of failing to lend to small businesses, the new site says it provides an alternative that offers firms and savers a better deal.
Lenders will earn an average of six per cent to nine per cent, claims Funding Circle, lending small amounts to a wide variety of different creditworthy businesses, providing a fraction of the total to spread their risk.
There is no limit to the amount that can be lent but participants can only provide between £20 and £2000 per business, offering an amount and interest rate to borrowers through the site. The lowest interest rate offers become part of the loan through an online auction similar to eBay.
Savers can lend to many different businesses using an autobid tool, which lends their money according to chosen criteria or, alternatively, they can hand-pick individual businesses. In addition, loan parts can be sold on to other lenders at any time, offering investors a pre-term exit.
With banks accused of failing to lend to small businesses, the new site says it provides an alternative that offers firms and savers a better deal.
Lenders will earn an average of six per cent to nine per cent, claims Funding Circle, lending small amounts to a wide variety of different creditworthy businesses, providing a fraction of the total to spread their risk.
There is no limit to the amount that can be lent but participants can only provide between £20 and £2000 per business, offering an amount and interest rate to borrowers through the site. The lowest interest rate offers become part of the loan through an online auction similar to eBay.
Savers can lend to many different businesses using an autobid tool, which lends their money according to chosen criteria or, alternatively, they can hand-pick individual businesses. In addition, loan parts can be sold on to other lenders at any time, offering investors a pre-term exit.
