Connective Lending has secured £125,000 of equity investment from senior executives involved with high street pawnbroker Cash Converters.
Ben Ling, a managing director at Cash Converters, and Peter Scrancher, who runs some of the store’s franchises in the south of England, have become shareholders of Connective Lending after making equity investments.
It comes after the platform surpassed half a million pounds of lending despite only launching in February 2021.
The company’s latest accounts for the year ending February 2021 show net assets of £46,755 but Connective Lending co-founder Daniel Grimes said this only reflects the period when the platform was seeking regulation and preparing to launch.
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Now that it is regulated and operating, Grimes said the platform hopes to reach profitability by next year.
He said the platform’s largest loan so far was for £125,000, secured on an expensive watch and backed by 60 lenders.
Average rates have hit 12 per cent and there has been just one default so far but the underlying asset was sold and investors got all their money back.
To date, secured assets have focused on gold, watches and jewellery.
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Grimes said there were plans to introduce other pawnbroking assets such as luxury cars and fine wine.
“We were a bit worried whether investors would have the appetite with us being so new,” he said.
“But they seem to like my history of being a pawnbroker. P2P lending is a market that if done in the correct way will give people yields forever more.
“The pawnbroking style has already been in existence for hundreds of years.
“There is plenty of scope for the future of P2P as long as you are producing decent yielding products.”
The platform said it believes yields have to be at seven per cent or more to make the risk in P2P lending worthwhile for investors.