A new peer-to-peer lending platform is set to launch in early 2021, offering consumer loans secured against a range of luxury items.
Connective Lending received full authorisation by the Financial Conduct Authority (FCA) a few weeks ago, and will proceed with a soft launch of the platform in January 2021.
Co-founder and veteran pawnbroker Daniel Grimes told Peer2Peer Finance News that the platform would be targeting returns of between five per cent and 16 per cent to both retail and institutional investments.
All loans will be secured against mortgage-free properties, or personal assets such as jewellery, gold, or antique cars.
“I have been a pawnbroker for 23 years so it’s a natural progression for me,” said Grimes.
“It’s an evolution of the pawnbroking business. The P2P business allows us to give investors a return, allow us to treat borrowers fairly and give them a lower interest rate.”
Connective Lending was founded in February 2018 and applied for FCA authorisation soon after. The team is made up of Grimes, along with co-founder Noman Akram, accountant Ehsan Maher, property underwriter Kristian Henery, and compliance specialist Shakeel Hasham.
The new platform will offer manual lending only, and it will primarily target sophisticated retail investors. A secondary market will launch alongside the main platform, and an innovative finance ISA offering could follow.
“We’ve been working on the P2P platform for a while now,” said Akram.
“We saw an opportunity to allow savers in alternative investment products especially in the current market with low to negative interest rates we thought there was a good opportunity.
“There is scope for us to offer something slightly different that is a bit competitive in the market with enough of a margin to give investors or lenders a good return.”