WHY P2P

Why P2P ?

The P2P marketplace is a rapidly changing environment which has witnessed unprecedented growth 

Since 2010 £8.7billion has been raised for UK businesses, with typical business loans between £100K to £5m plus.

What has really changed the game in the last couple of years is the introduction of institutional investment to platforms, from pension funds, venture capitalists, family investment offices and even the UK Government, allowing borrowers certainty of funding in much larger amounts.

The expertise that we provide has helped many businesses raise finance in circumstances where traditional bank providers have been unable to help.  Banks themselves now recognise that although their credit policy may not help them assist their client, signposting them to Ludgate to arrange suitable funding elsewhere is all part of an added value service.

It is common now to think about business finance as a progression through a number of steps. 

P2P funding often acts as the first step in the journey.



Flexibility of Proposal & Speed of Decision

P2P is enabling finance.
P2P and direct lending can be a lot more flexible than more traditional forms of funding, especially when repayment is based around future projections rather than past performance.  This flexibility provides the means for us to structure innovative and pragmatic proposals which are outside the scope of mainstream lenders, enabling a deal to be completed speedily to meet your business deadlines.
Whilst banks can take several months to complete a proposal, typical turnaround time for a simple P2P proposal is 4-6 weeks. 
With typically no early repayment fees, any funding can be refinanced back to a bank or other provider within a couple of years.

Deal Size

P2P Deal Sizes are increasing.
Typically, facilities in the £1m-£2m range are now commonplace.
Typically, we arrange debt funding via P2P of between £250K to £5m plus. All sectors and purposes are considered. What has really changed the game in the last couple of years is the introduction of institutional investment to platforms. This has come from pension funds, venture capitalists, family investment offices and even the UK Government.
This allows platforms to give borrowers certainty of funding and to handle much larger loans.

New Platforms & New Funders

New Platforms are still launching regularly.
There are now over thirty platforms, each with a different credit/risk appetite.
Institutional money continues to back the P2P sector meaning many platforms now underwrite/fund their own deals. The emergence of direct lending by specific institutional funds means that deal sizes are getting larger and facilities can be arranged with greater discretion.

MBO/MBI & Acquisition Funding

P2P borrowing offers a significant avenue to raise cashflow lending against cashflow.
This opens up additional opportunities for strong management teams to take on companies with potential to ensure their success in the future.
Traditionally these transactions were funded through a bank or private equity fund but we have a number of P2P lending platforms that will finance an MBO/MBI.
Typically these are loans against future projected cashflows rather than tangible security.

Revolving Credit Facilities

In addition to the established platforms which provide loan funding, new providers are now making overdraft facilities available.
These offer far more flexibility and can be provided against debtors, stock, work-in-progress or a blend of all three.

Growth Funding & Development Finance

Growing businesses are often cash-hungry.
Because of this, further lending requests can be viewed with reticence by banks however, P2P and direct lending are ideally suited to development finance. Proposals can be accommodated whether they be residential, commercial, industrial or a mix of all three.
Speculative developments can be funded and drawdowns & repayments designed to suit specific circumstances and cashflows.

Bridging Finance

Because of the need for quick decisions, P2P borrowing is ideal for bridging finance. A wide range of situations can be accommodated and there are generally no standard rules - all circumstances can be considered and often borrowing can be tailored to suit.

Working Capital Funding

Cash is key to any business.
Banks nowadays tend to offer only invoice finance facilities for working capital. Often this is not appropriate and can be expensive. P2P and direct lending can provide tailored loan or overdraft facilities which are bespoke to your situation.
We always start from the position of 'What does the business need" rather than "What product is a 'least-worst' fit".  
One of the best things about P2P is that it can be completely bespoke to your business.





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