Crowd2Fund plans to relaunch its platform in July and offer two government-backed support schemes to help small- and medium-sized enterprises (SMEs).
The peer-to-peer business lender, which paused new investments and its secondary market in April, is readying to launch a future fund product for entrepreneurs and offer loans under the coronavirus business interruption loan scheme (CBILS).
The future fund, which launched at the end of May, offers convertible loans ranging from £125,000 to £5m from the government, subject to at least equal match funding from private investors.
Crowd2Fund is hoping to launch a future fund product that has the ability for private investors to co-invest alongside the government, to give another source of capital for SMEs.
“The future fund is a generous scheme and we’re working on the best product we can produce for entrepreneurs,” said Chris Hancock (pictured), founder and chief executive of Crowd2Fund.
“We’re looking at various ways to collaborate with the government on the future fund to ensure capital gets to the right entrepreneurs and the process involves entrepreneur investors.”
Crowd2Fund has been provisionally approved to deliver CBILS and has been securing institutional credit lines in preparation for the relaunch.
Through CBILS, the platform plans to deploy £100m SMEs between now and 2021 and will use this volume to scale up.
Crowd2Fund has written to the Bank of England requesting support to help raise £100m from the international credit markets, meaning it would not need an intermediary bank.
However, Hancock said that by having private credit available which is mobilised via platforms, Crowd2Fund won’t have to rely on the international credit markets where the cost of the borrowing may increase in the medium to long-term.
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“CBILS lending will give us the volume to grow the platform but we will do so without losing the essence of our proposition which is having a community for entrepreneurs which will still be important, and we will maintain,” Hancock said.
“There’s a massive opportunity for fintech and P2P to embrace and recognise the role they can play in supporting the British economy.
“Accessing CBILS is a massive milestone for the industry and creates more of a level playing field for platforms and banks.
“I think more platforms offering CBILS is fairer and good for growth. It’s another step in the right direction.”
Hancock said news that P2P lenders are being represented in talks for cheaper funding from the Bank of England is a welcome endorsement for the sector, but added the process would need transparency and supervision.
“P2P will prove its value going through the downturn,” he said.