The small business and entrepreneurial intelligence site, www.startups.co.uk, is one of many to report that that the British Business Bank, a government-owned financial institution, is to lend £10 milion to businesses owners through peer-to-peer (P2P) funding platform RateSetter.
“The deal, which will commence from Monday 21 July, is targeted at supporting the growth of individual entrepreneurs, sole traders and partnerships through RateSetter’s business loans,” reports startups.co.uk. “The Bank will lend 40% of any qualifying loan on the site until the first £4m has been utilised, and will then move to 20% for the remaining £6m; facilitating a total of £40m in funding.”
The FCA-regulated RateSetter was launched almost four years ago, and claim s over 13,000 savers who have provided some £279 million.”
Ratesetter calims to be able to provide finance to individuals in "a couple of days"
The site “provides P2P loans directly to the individual rather than the business which it claims is a faster way of raising funds; providing capital within a ‘couple of days’”.
This is the latest in a series of deals between banks, albeit a government-owned on in this case, and alternative finance providers. The highest profile deal in recent weeks was the Santander hook-up with Funding Circle, as featured in Another Crowd.
RateSetter CEO and founder, Rhydian Lewis, said via a press release: “We have been talking to the British Business Bank for over 18 months. The Bank does thorough due diligence before making any commitment and we, too, wanted to make sure we were ready – as a business and as a marketplace.
“I believe in the power of government to catalyse change. The government is not propping up peer-to-peer lending or underwriting any loans; it is lending, on commercial terms, to stimulate lending to the real economy and to catalyse the emergence of peer-to-peer lending as a competitive force in finance.
“It is sending a message to borrowers that there are now alternatives.”