PEER-TO-PEER lending platform Flender is planning to synchronise its foray into the UK market with the launch of an Innovative Finance ISA (FISA) within the next couple of months.
The platform gained full authorisation from the Financial Conduct Authority at the beginning of May and recently soft-launched in Ireland, attracting £4m in demand over five weeks. The business and consumer lender is now looking to build up enough volume to launch a tax-free wrapper at the same time as it kicks off its UK operations.
The return on its IFISA investments would mirror the current average yield rate of between eight per cent and 14 per cent, the firm’s co-founder and chief executive Kristjan Koik told Peer2Peer Finance News, although the nature of Flender’s business means that rates on the platform can vary widely and start from as low as zero per cent.
The company was set up to enable individuals and small business owners to launch fundraising campaigns targeting their circle of acquaintances and to allow both sides to choose their own interest rates.
Koik said he expects that the balance between its consumer and business borrowers in the UK will be “very much in line with current P2P statistics in the country, where the former stands at slightly below 50 per cent,” and he hopes to quickly scale up lending thanks to the larger scale of the British market.
P2P firms raised £11m of funds in Ireland over 2016, which compares with about £1bn of investment channelled in the UK in first quarter of 2017 alone.
The expansion could allow the platform to shift from retail, high-net worth and small family office lenders to institutional investors within six months, Koik said.
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“We are focusing on building up a good track record to bring results to the table for larger investors,” he said.
Mainstream banks as well as challenger lenders such as Metro Bank could be a strong match for the platform, which offers a more secured type of lending compared with other P2P firms, including director guarantees on business loans, Koik said.