A £120,000 loan arranged by RateSetter boosted child care placements in an Essex-based foster care company by almost a quarter.
The peer-to-peer lending platform helped Brighter Futures Foster Care increase the number of new foster households from 67 to 83, making its foray into a sector where it found “finance is desperately needed”.
The borrower works with local authorities in the South East to find foster families for young people amidst a national shortage of 10,000 foster places, and is looking to raise further finance to bring the number of placements to 110-120.
“Brighter Futures took us into a new sector where finance is desperately needed,” said RateSetter’s regional relationship manager Donal Vaughan, who handled the fundraising.
“With its 10-year record, the company is well run, with excellent qualified staff and lots of ideas for the future. We were very happy to help and it is good to see that the additional finance is already being used to good effect.”
Read more: RateSetter targets growth in SME lending
The borrowing firm’s co-founder Justina Gay said applying for bank funding would have been a vexing process.
“We did consider talking to our bank, but concluded that the process was too complicated and restrictive,” she said.
“With RateSetter we were able to talk in person to people who genuinely seemed interested in our business, and who understood what our options might be. We were talked through the process at every stage and it was pain-free.
Read more: SME access to finance ‘worse outside London’
“We earned a ‘good’ rating from Ofsted last year and we want to protect that status by growing carefully, rather than making a dash for growth and risk dropping our standards. We currently have six people in the fostering pipeline, which exceeds our original target by some margin.”
RateSetter’s own research shows that only a third of the small- and medium-sized businesses consulted in the region would approach their own bank for financial advice.
Read more: RateSetter poaches RBS manager for SME role