Scots crowdfunding champion says sector is servicing vital need in financial market

An audience in Inverness will hear tomorrow how crowdfundng is performing a vital role by filling a finance gap for Scotland’s investors and businesses.

Fraser Lusty, head of business development at Edinburgh-based LendingCrowd, will tell those assembled at the breakfast seminar in the Highland capital’s Kingsmills Hotel how borrowers and investors now have more options than ever.

He said: “A notable feature of the economic recovery following the collapse of the banks has been the rapid growth of new funding platforms.

“Crowd-lending (where no equity changes hands) accounts for 75 per cent of activity within the alternative finance market and is different from the more familiar crowd- funding model, where individuals give money in return for a reward, recognition, a product or a service.

“Additionally, the transaction volumes are also much smaller, with equitybased crowd-funding generating £28million in 2013, compared to peer-to-business crowd-lending volumes of £192million the same year.”

He added: “Since launching (LendingCrowd) in September 2014, we have facilitated over £1.2million of loans to 22 companies across the platform and have more than 750 people signed up as investors.

“The reaction from users of the platform has been enthusiastic. For example, Paul Farley, the chief executive of Tag Games, a Dundee- based mobilegaming development company, doubts he will ever need to speak to banks about growth f i nance again.

“After being turned down by the banks he was able to raise the £150,000 he needed for new production development and commercialisation from our investors.

“We are confident our peer-to-business model of crowdlending through a flexible and well-regulated system can help support a successful base of SMEs to make a valuable contribution to the economy.”