RateSetter to ramp up direct strategy to find business borrowers
RATESETTER is planning to boost its direct marketing methods to diversify its sources of new business borrowers.
The ‘big three’ peer-to-peer lender currently originates the bulk of its business loans via intermediaries, such as accountants or commercial brokers.
“Our business lending is going up quite dramatically now,” Paul Marston (pictured), managing director of commercial finance at RateSetter, told Peer2Peer Finance News.
“We strengthened our team last year and improved our technology this February, so now we’re ready to go out and find business borrowers as part of our next strategy.”
This could involve more PR, marketing on Google or approaching potential borrowers within trade parks, Marston said.
“It’s not about replacing our intermediaries, it’s about diversifying and finding different origination sources,” he added.
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RateSetter is also eyeing the British Business Bank’s Enterprise Finance Guarantee (EFG) scheme as a way to grow its business lending segment. The government-backed initiative provides a guarantee to lenders if they take on loans where the business borrower has insufficient security to meet their normal requirements.
The scheme was re-launched last year with a view to expanding it to a wider range of finance providers and RateSetter applied to participate in June 2016.
“I’m seeing two to three deals a week where the EFG scheme would have enabled them to have been approved,” said Marston.
“We’ve got a meeting with the British Business Bank about the scheme in the next month.”
RateSetter is approaching £2bn of cumulative lending since its launch in 2010. Last month, the firm raised a further £13m from City investors, bringing its valuation up to £200m.
Co-founder Rhydian Lewis, who was awarded an OBE in the Queen’s birthday honours list earlier this month, recently confirmed the firm has long-term plans for an IPO in order to solidify its position as an “investor brand”.
The firm is still awaiting full authorisation from the Financial Conduct Authority, despite fellow ‘big three’ lenders Zopa and Funding Circle gaining approval in May.
