PEER-TO-PEER business lender Rebuildingsociety has secured an agreement with Leeds City Council whereby the local authority funds loans through its platform.
The council will review business loan requests from companies with an LS postcode prefix, consider the industry and location of the company, and contribute to the loan amounts required by suitable applicants.
Daniel Rajkumar, founder of Rebuildingsociety, said this showed that businesses could look beyond London-based lenders for finance.
“There is no need to rely on London for local funding needs,” he said.
“By arranging finance online and locally, regions can prosper and go on to further support local communities.”
The loan performance will be regularly monitored by council representatives.
“This is the first public sector organisation to be investing through Rebuildingsociety,” Simon Brereton, acting head of economic policy and sector development at Leeds City Council, said.
“We hope it will attract the interest of other public-sector lenders, as well as prospective borrowers.”
This is not the first council to get involved in the P2P space.
Herefordshire Council launched a partnership with Funding Circle in January 2014 to lend £50,000 to local businesses through the platform. The agreement ended in January 2017.
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