News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – FinTech

P2P Finance News reports:

“Funding Circle has announced that digital bank Starling will lend £300m to small firms through its platform, under the coronavirus business interruption loan scheme (CBILS).

The peer-to-peer business lender said that the new strategic partnership aims to further increase the flow of funds available to small firms during the coronavirus crisis, using the government-backed emergency loan scheme.

Starling will lend through Funding Circle alongside other institutional investors. Retail investors cannot participate in CBILS loans.

The announcement follows Starling’s and Funding Circle’s accreditation to CBILS, with both fintechs opening for applications last month.

“Small businesses form the backbone of the UK economy and will be at the heart of the nation’s future recovery,” said Lisa Jacobs, UK managing director at Funding Circle.

“At Funding Circle we are pleased to be able to offer businesses a decision in as little as four minutes through our instant decision technology. This partnership will help to ensure the UK’s vital small business community has the financial firepower required to not only survive this period, but to go on and thrive.”


2. UK - FinTech

Alternative lender Growth Street saw financial losses deepen during 2019 to £1.86m, according to filings posted on Companies House. AltFi reports.

“In 2019 the peer-to-peer lender had a profit and loss reserve of £4.68m up from £2.81m the previous year, suggesting a loss of £1.86m in the year ending 31 December 2019, compared to £1m the previous year.

London-based Growth street had a rocky 2019 and start to 2020.

Almost two months ago, Growth Street initiated ‘a liquidity event’ and closed investor access to its platform in a bid to stabilise its operations amid the coronavirus pandemic.”


3. UK – FinTech


Caterers take care of themselves. The Caterer reports:

“A hospitality crowdfunding campaign looking to challenge insurance companies refusing to honour business interruption policies has surpassed its initial £20,000 target.

The campaign, led by Rob Atkinson, a leading in-house hospitality lawyer from Black and White Hospitality, which operates the Marco Pierre White portfolio of restaurants, will now work with lawyers to review policies and insurers' reasons for declining claims.

The lawyers will then issue advice under each category of policy in advance of possible legal action against businesses it judges to be unfairly refusing claims.

UKHospitality, Best Western and Vine Hotels are among the businesses to have signed up to the campaign allowing it to proceed.”


4. UK – FinTech

AltFi reports:

“Digital pension provider PensionBee saw another sharp change in savers behaviour this April, with withdrawal rates now dropping below its 2019 figures.

Last month the online provider saw withdrawals down 33 per cent year on year, and withdrawal sizes falling from £10,900 in 2019 to £8,200 last month.

Its tax year-end contributions were up over the same period by 40 per cent, with average monthly contributions in April at £1,752, up from  £1,225 in April 2019.

The news comes after the worrying month of March that saw a spike in anxious PensionBee savers looking to make early withdrawals as markets around the world saw stock prices fall sharply.”

5. US – FinTech

Crowdfundinsider showcases an equity investment platform.

StartEngine is one of the largest investment crowdfunding platforms in the US by funds raised. A full stack platform, StartEngine is raising capital under Reg CF, Reg A+ and, in the past, under Reg D. But the platform’s vision for the future of online capital formation and private securities goes beyond raising money.  StartEngine is also a FINRA regulated Broker-Dealer – a precursor to operating an ATS (Alternative Trading System) as StartEngine not only wants to help smaller firms raise capital but then it wants to provide liquidity for investors too, thus creating a more robust securities ecosystem.

In a blog post at the end of last month, StartEngine reported “unprecedented interest from entrepreneurs who want to launch new equity crowdfunding offerings” on the platform.  Anecdotally, we have heard similar comments from other online capital formation platforms from around the world.

Even while VCs and institutional money have slowed or paused their investment activity, it appears that crowdfunding platforms are holding their own. In fact, StartEngine reported its strongest quarter during the first three months of 2020 raising $24.4 million.”