News Briefing - Crowdfunding, SME And Alternative Finance

Construction workers eat lunch 200 feet up in the air.

1. UK – FinTech 

A new challenger bank seeks out a wealthy client base. The Times reports:

“A former chief executive of the Co-operative Bank, has become chairman of a start-up digital lender seeking to shake up the market for wealthy customers.

Niall Booker, 61, who also held senior roles at HSBC during a 30-year career there, joins several other industry veterans at Monument, which has applied for a banking licence and aims to capture some of the 3.5 million people it believes have the means to use its services.

The new bank will lend up to £2 million to customers through an internet-only application, which it believes it can do because of superior technology for credit checking.”

2. UK – FinTech

AltFi carries a feature on an insurance product launch by Yolt:

“Per-mile car insurance has arrived in the Yolt app, with the help of insurtech By Miles. 

It’s the latest addition by Yolt, which now has partnerships with pensions, investments, utilities and insurance providers all from its smartphone app. 

The move puts Yolt one step closer to becoming a central hub for finances, but without providing the core features like a current or savings account itself.”

 

3. UK – AltFi

 

The Business Desk is running a webinar on how disruption and crisis are shaping the future of finance. Details below. The event is slated for tomorrow morning.

 

“The economy is in the midst of change. The fourth industrial revolution – characterised by technology and disruption – is well underway and now it faces a once in a generation challenge as a result of the Covid-19 pandemic.

But this ‘perfect storm’ is also creating opportunities to shape the future for those disruptive, technology driven businesses brave enough to try.

The latest webinar from TheBusinessDesk.com in partnership with Evai.io, will look at the parallels between the post Covid-19 era and 2008 recession as reset moments for the financial world and leading businesses. It will also focus on the opportunities the current situation provides FinTech businesses and challenger brands sector to transform the financial sector.

The panel of experts – including Rashee Pandey, head of partnerships at Innovate Finance, Matthew Dixon, CEO and co-founder of Evai.io, Jonathan Thompson, CEO and founder of B-North and Professor Andros Gregoriou, Brighton Business School, Research Excellence Lead (Brighton University) – will consider areas such as the role of digital currencies, crowdfunding and the opportunities and challenges innovation poses to traditional investors.”

4. UK – AltFi

Yahoo Finance looks at the flexibility it suggests will be needed to help SMEs:

“Small businesses need “flexible debt repayment schemes” in order to survive the next 18 months, a leading industry report claims.

The quarterly SME lending monitor, by online business funding marketplace Funding Xchange, highlights the need to address the stresses currently experienced by up to 40% of the businesses who have borrowed from alternative lenders.

Funding Xchange is an online portal which directs small businesses unable to access funding from their high street bank to other lending providers.

The data shows two out of every five businesses that currently have loans from “alternative lenders” are now in discussion with the lenders, as they are struggling to fulfil their repayment programmes as a result of the coronavirus lockdown impact.

“Alternative lenders” have provided another option for business who are unable to access funds from their high street bank.

They established themselves following the last financial crash, as the market looked to introduce a “more competitive business lending market.”

5. US - AltFi

The “exempt offering eco-system” is evolving. Crowdfundinsider has the latest.

“Not too long ago, the Securities and Exchange Commission (SEC) concluded the comments phase of a proposal to update, and hopefully improve, rules pertaining to the exempt offering ecosystem. This includes Reg A+, Reg CF, and Reg D (506c), each a variant of online capital formation (crowdfunding).

The actual proposed rule change, “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets,” was first published last March.

At the time of the announcement, SEC Chairman Jay Clayton said that emerging companies, from early-stage start-ups seeking seed capital to companies that are on a path to become a public reporting company, use these exemptions “to access critical capital needed to create jobs and scale their businesses.” But, over time, the rules have become overly complex and difficult to utilize – especially for smaller firms that lack the resources more established firms can tap into.

As we all know, smaller firms and entrepreneurs are vital to the economy and thus facilitating access to capital is a key policy goal.

The proposed changes include a much-needed increase to Reg CF from the current anemic $1.07 million to a more viable $5 million funding cap. Reg A+ may be inched up from its current $50 million maximum to $75 million. There are other proposed rule changes that will have a material impact on capital formation if enacted. Many of these proposals are quite good but some adjustments will be necessary to put it all together in a workable package.”