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FINANCE & INSURANCE 33


PEER-TO-PEER: DO YOUR RESEARCH


Jason Tebb of Go Develop explains how recent issues with peer-to-peer lending have highlighted the need to do research when funding a new project.


construction finance. P


Online alternative funding (in large part P2P) rose from £3.2bn in 2015 to £4.6bn over the next 12 months – an annual growth rate of 43 per cent.


EXPLANATION


The reasons behind this growth are relatively clear. What might be termed ‘conventional’ lending sources, such as the major banks, have not always necessarily made an effective transition to this new


eer-to-peer lending (P2P) continues to be an extremely popular solution for companies that are looking for


fast-moving business world. Some continue to be risk-averse, relatively inflexible, and weighed down by bureau- cracy when construction borrowing propositions are submitted. The end result of all of that can be extended delays in getting a decision, and an iterative process that can sap the enthu- siasm and energy of the company seeking the finance. It can also lead to the commer- cial opportunity disappearing due to delays in approvals etc. In contrast, P2P lending is available


online, is fast, dynamic, and typically entre- preneurially-oriented. It is therefore no real


surprise that potential borrowers are attracted to it.


CAUTION However, there are issues for borrowers and investors to be aware of in this marketplace, as illustrated by recent events with one such lender.


Featured and promoted as an illustration of modern P2P techniques in various media sources, the platform has recently received less favourable media exposure due to a threatened legal action against it and its investors for several million pounds. The issues behind this legal action are


WWW.HBDONLINE.CO.UK


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