24 . Glasgow Busines August 2016


THE MANY FACES OF LENDING


CROWDFUNDING...


Report underlines the growing scale and sophistication of investment options C


rowdfunding in Scotland has grown significantly in popularity with


businesses and investors over the past three years, developing in scale and sophistication, according to a major report supported by Glasgow Chamber of Commerce. Te Scotish Crowdfunding


Report 2016 report, commissioned by Glasgow Chamber of Commerce and supported by LendingCrowd, law firm Harper Macleod LLP, and Santander Corporate & Commercial, was the first major report on this alternative form of investment since the original Crowdfunding – the Scotish Perspective report published in 2013. Te new report found that


more than £27 million was raised by Scotish business through lending, equity and reward between October 2014 and September 2015, compared to less than £1 million identified in the


Tim Wright, twintangibles; Geoff O’Brien, Santander; Ian Cunningham, LendingCrowd; and Paula Skinner, Harper Macleod


2013 report. Te report also found that some 1,263 successful projects were completed in the 12 months. Te largest part of the sector is


the now ‘crowdlending’ or P2P (peer to peer) which contributed £20.5 million and is predominantly aimed at financing expansion and growth. Te rapid growth of the P2P part of crowdfunding in Scotland mirrors similar expansion in the rest of the UK, while reward campaigns


raised £2,586,594 and Equity campaigns raised £3,948,777. Te report noted that the


£1.5million loan raised by Diet Chef, a Scotish online diet business, through LendingCrowd allowed an exit for early-stage investors and demonstrates increasing sophistication and use of crowdfunding as a finance strategy. Stuart Patrick, Chief


Executive, Glasgow Chamber of Commerce, said: “Tis is a highly


illuminating report which clearly shows the emergence of crowdfunding as an alternative option. It is now a credible part of the financing mix for some businesses and cannot be underestimated.” Te report also found that


crowdfunding is now acknowledged and accepted by the more traditional and established finance sector in a way that it would not have been just a few years ago. Finance professionals in Scotland now accept that for many crowdfunding is ‘definitely filling a gap’. In April 2014 the UK’s Financial Conduct Authority (FCA) introduced new and additional regulatory provision dealing specifically with crowdfunding. Equity campaigns are growing


in number and the single most valuable project in Scotland was the FreeAgent campaign, while Food and Drink was the most popular sector raising £1,776,966 of the £3,948,777 total.


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