Linked finance in an Irish peer to peer lender. Garrett Lee a marketing executive at Linked Finance explains the strength that investors can rely upon when using this platform.
What is Linked finance?
Linked Finance is Ireland’s leading P2P lending platform. We connect great local businesses who need loans with a vibrant online lending community. This is about using technology to make business lending better. Real people with savings, alongside institutions and other investors, lending to great local businesses at attractive interestd Linked finance manage t rates.
Can you tell me more about the management team?
You can find out about the various members of the management team here: https://linkedfinance.com/about-us
What peer to peer market regulation in Ireland?
There is currently no regulatory framework available for P2P lending platforms in Ireland.
Is Linked finance regulated?
We recently secured full authorisation from the FCA in the UK under firm registration number 714019
What are the main advantages for lenders who use the platform?
- Largest range of P2P lending opportunities in Ireland
- Good mix of established businesses across all industry sectors
- Rates of between 8.5% and 15%
- Low default rate. 0.86% as of 31.3.2017
- Low fees. Just 1.2%
What are the risks when lending to SMEs, what measures is Linked finance taking to mitigate such risks?
As with any P2P lending platform, the main risk for users is that defaults or arrears eat into returns and cause lenders to lose some or all of their money. We are very conscious of the fact that our long-term success is contingent upon our ability to provide lenders with attractive returns. As such, we have invested heavily in developing a robust and rigorous credit evaluation process which ensures that only creditworthy businesses are presented to lenders. We also provide a grading system which allows lenders to make decisions based on their appetite for risk. Ultimately, our commitment to finding the best Irish SMEs to support is reflected by our very low default rates across the platform, less than 1% at the end of Q1 2017.
Can investors use an Auto-Invest tool on Linked Finance?
Yes, there is an ‘Autobid’ tool in place. Lenders can access their accounts and set the amounts
they automatically want to bid across each loan grade and term.
Is your platform open to international investors?
Yes absolutely but lenders are required to have an EU bank account for withdrawals.
What is the minimum investment amount in each loan an investor can make?
What are the fees for investors to use the platform and what are the advantages in this fee structure?
There are no set-up fees for regular lenders. You can create an account absolutely free and
start lending with as little as €50. The only fee lenders pay, is a charge of 1.2% on the principal outstanding. This is levied on a monthly basis at 0.1%. The benefit of this fee structure and the lack of any set-up costs means that the platform is open to all and attractive even to smaller investors.
How did Linked finance manage to lend 21,743,045 Euros to SMEs in Ireland as of 01/06/2017?,
A lot of hard work and determination. Our first few years have been an incredible journey. The business has been doubling in size every year since we launched. We are still just getting started though. We plan to continue this growth trajectory and make Linked Finance the biggest source of non-bank SME funding in Ireland.
Why does this market not interest the traditional banks?
I’m not sure that’s the case. All of the main banks are actively promoting SME credit facilities so I don’t think they are not interested in this area of the market.
Why do SMEs want to borrow from Linked Finance?
Our loan offering is very attractive for SMEs. The main benefits are speed and ease of access. We don’t ask for complex business plans or cash flow projections. All a business needs to apply are 6 months bank statements and the last set of financial accounts.
Once we have those documents we can provide a credit decision within 8 hours and once approved businesses could be drawing down funds the next day. Beyond that, business owners also like that there are no early repayment penalties, no collateral requirements, no legal fees and they get the opportunity to promote their business to thousands of local lenders.
Would you like to add anything not covered in the above?
Just that we are always happy to talk to prospective lenders. Anyone interested in the platform can call our office during business hours on +353 1 906 0300 and we’d be delighted to answer any questions.
Where can potential investors find more information about Linked Finance?
On our website, www.Linkedfinance.com, we have a fantastic resources section that should answer any queries our lenders may have.