14 June, 2016

RateSetter to Increase SME Lending

RateSetter Expands its SME Lending

RateSetter, a peer-to-peer lending giant, is bolstering its commercial loan origination having already lent £250million to UK SMEs since the platform's formation in 2010.

‘British Business Bank to lend £10m to SMEs via RateSetter platform’

In an effort to capitalise upon impressive growth in the last six years, RateSetter is attempting to lead the way in P2P lending by facilitating loans to individuals, property and business - no other platform lends to all three asset classes in the space currently.

With banks coming under increased pressure to conform or face P2P platforms "eating their lunch", big names like HSBC are opening up their SME lending capacity. This year, HSBC has committed at least £10bn worth of loans to SMEs. However, the legacy of slow, inefficient lending will likely encourage SMEs to look to P2P lending as a source of quicker capital, especially now the government is backing it - British Business Bank partnership, for example.

As institutional investment and strategic partnerships become more prominent within peer-to-peer lending, it is no surprise RateSetter has forged yet another interesting one.

British Business Bank will increase liquidity on the P2P platform and ensure SMEs have the best opportunity of being funded.

Senior figures appointed

The peer-to-peer lending platform, which has lent over £1.2bn to-date since 2010, has had an eventful and productive 2016 so far. RateSetter has made several key hires since the turn of the year in order to improve upon its SME lending capabilities. These hires were announced in a press release posted on RateSetter’s website in early June and include:

Paul Marston, Head of Commercial Finance Divisions; Marston was previously MD of the business and commercial division at Secure Trust Bank.

Brian Cartwright, Head of Business Finance; Cartwright joined RateSetter from challenger bank, Cambridge & Counties.

RateSetter's loan classes

Predominantly, RateSetter has facilitated loans between retail investors and consumers. It has, more recently, moved into the two other asset classes lent to via peer-to-peer lending: SME businesses and property.

RateSetter lent £500m in 2015, split by:

Consumer: 65%

Commercial: 24%

Property: 11%

Aside from key hires, RateSetter has developed an entire division built to enhance the platform's proposition in business lending. The press release last week exclaimed:

RateSetter has now built a team of Relationship Managers spanning the whole of the UK to make RateSetter significantly more accessible for SMEs and their advisors.

RateSetter’s thoughts

Paul Marston had this to say in their June press release:

£250m is a great milestone, and there’s more to come. Commercial lending is one of the fastest-growing areas of our business, and that’s because there’s a genuine need: the market for SME finance is not fit for purpose and businesses are still being let down by the banks. The faster the SME receives their loan, the faster it can be put to good use. There’s an exciting and significant opportunity for forward-thinking companies like RateSetter to provide the desperately needed finance that will enable UK SMEs to grow and improve their productivity. With great tech and great people, we’re building up a first class business lending team with experienced senior hires, putting ourselves in an excellent position to take our business lending to another level.