RateSetter to help SMEs become more productive
RateSetter is to help SMEs by providing business loans. The peer-to-peer lending company, which connects investors with lenders, has so far helped individuals and sole traders, facilitating £1.3 billion of lending.
The company has now hired a specialist team to enable it to break into business loans. The service is being backed by the Government and supported by the British Business Bank.
Commenting on the new service, Head of Commercial Finance Paul Marston said that RateSetter’s aim is to “help SMEs scale up and become more productive.”
He added that the company has been testing the lending service to the sector over the past few months.
The company is aiming to provide loans of between £25,000 and £1 million for small businesses, with terms of three months to five years. Businesses will be able to have access to funding within two weeks.
The service will be aimed at small businesses that have been trading for a few years rather than start-ups, which are seen as being much riskier.
RateSetter’s decision to introduce business loans has now put it into competition with other peer-to-peer lending companies, such as Funding Circle.
Banks have also responded to the growing online competition by boosting their lending services to small businesses. Earlier this year, HSBC announced that it would be committing at least £10 billion of loans to small businesses, its largest funding package to date.
The company joins a number of high-street lenders that are beginning to reintroduce small business lending after the financial crisis.