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LendingCrowd thinks outside the bank using the power of the crowd

Andy Moore
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A fintech with a view...SDI can help London fintechs like yours grow in Scotland (Source: Scottish Development International)

Peer-to-peer firm LendingCrowd was quick to attract investment to grow in Scotland's niche crowdfunding sector. The company also had the vision to appreciate the vast fintech potential here, which thrives on over 1,000 tech firms, together with 600 financial and business companies.

It’s not hard to see why peer-to-peer lending has established such a strong foothold in just a handful of years. Seeing the opportunity, LendingCrowd offers a real alternative to traditional bank funding with loans up to £250,000 at competitive rates. This is also good news for the loan funders — many are private individuals — who can earn a return significantly higher than what is on offer from traditional bank deposits.

The unique offering of the Edinburgh-based firm helped it to attract support and investment from business support agencies, Scottish Development International (SDI) and Scottish Enterprise (SE). They have helped LendingCrowd with key areas of getting off the ground - from funding for growth to an official lending partnership with Scottish Enterprise.

CEO, Stuart Lunn says:

They’ve been very useful in introducing us to a number of organisations which could help us develop, such as other technology businesses and someone to help us manage our PR.”

SE has also supported LendingCrowd through their financial systems improvement programme, which could prove an inspiration for any fintech firm wishing to pursue opportunities in Scotland. This gives companies access to a senior finance expert who will work with them for up to 12 months to improve their accounting and finance functions — expertise that LendingCrowd couldn’t otherwise afford.

An idea born, a first for Scotland

When Stuart's job as an equity analyst brought him from London to Edinburgh, he quickly fell in love with the way of life here — if only he could launch a venture that he could call his own. After examining the financial markets for opportunities, he opted for peer-to-peer lending to small and medium-sized businesses.

Along with his co-founder, a well-established technology entrepreneur, he formed Scotland’s first peer-to-peer lender for business borrowers. A subsequent round of fundraising was supported by a group of angel investors.

How did it grow in Scotland?

LendingCrowd was attracted to Scotland's complete and complementary financial sector.

Its customers come from right across the UK and span a wide range of industries — from technology and professional services to manufacturing and agribusiness. Since 2014 the company has facilitated over £6m through more than 80 loans. More than 2,000 individual investors have signed up to their online platform.

Stuart sees his market remaining firmly onshore however. He explains:

Our technology is certainly exportable and though we’ve had approaches from companies wanting to white label our expertise, our focus for the moment has to be on growing our core business."

A wealth of expertise in Edinburgh

Edinburgh has proven to be a strong location for LendingCrowd; recruitment has gone well, with a wealth of skilled technology professionals at all levels. Stuart describes Edinburgh as having a, “vibrant tech community” and there are many, like himself, who have moved there in search of an attractive place to live and work. Banking experience and credit control are also essential elements of its operation.

Locating in Scotland has been instrumental in helping to find the right skills — the company’s lending team have credit expertise gained with RBS and Clydesdale Bank. The next stage of its development is already advanced: the company has raised share capital — part from private investors whose funding is matched by Scottish Investment Bank’s Co-investment Fund — that will allow it to accelerate growth.

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