A crowdfunding venture is launching an introducer arm and says it intends to place strong focus on the intermediary market.
The platform, rebuildingsociety.com, has launched into the ‘alternative finance’ market and will pay a 1.5% fee on completed loans resulting from adviser referrals.
The business has been co-founded by young entrepreneur Daniel Rajkumar (pictured) and financial services industry heavyweight Gary Lumby, head of retail and small business lending at Yorkshire Bank.
Their venture, launched last year, provides an online platform that connects businesses looking for finance with investors looking to achieve strong returns. Businesses submit their funding requirements to the site and are given a risk grading. Investors then pledge their funds and repayment conditions in a short time-window with the best rates put forward as loans.
Loans range from £2,000 to £50,000 and are provided to limited companies, limited liability partnerships, social enterprises and PLCs, with terms between six and 60 months.
The firm is encouraging businesses not to borrow more than they need, instead enabling them to reapply or refinance very easily online and making borrowing in multiple stages more cost-effective.
Crowdfunding, also often referred to as peer-to-peer finance, is quickly emerging as a way for businesses in the UK to sidestep the high street route to raise capital, with some forecasting that more than £200m will be lent to organisations and individuals in 2012.
However, earlier this month the FSA – which does not regulate the sector – issued a warning about crowdfunding, saying it was only for investors prepared to lose their money.
But Rajkumar, managing director of rebuildingsociety.com, said: “If introducers are working to secure funding for their clients, they should consider crowdfunding because it’s fast and uncomplicated, and rates are typically much lower than those offered by banks.
“We want to become a leading source of alternative finance in the introducer market so we’ve designed a process and fee structure to reflect that.”
Registration to the introducer scheme is free and can be applied for via its website:
rebuildingsociety.com
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