PledgeMe launching first p2p lending campaign

Social enterprise Eat My Lunch takes a novel approach to raising debt.

PledgeMe is about to launch its first peer-to-peer lending campaign, for social enterprise Eat My Lunch.

The campaign, which will launch Monday, aims to raise up to $1 million through issuing bonds.

Eat My Lunch works on a simple premise – $12 delivers one packed lunch to the customer and one packed lunch to a child at a low-decile school, who otherwise would have gone hungry.

The year-old company has extended this principle to its debt raising too. For every $1000 lent, lenders will be able to choose between 6% interest plus a lunch given to a child each month, or no interest and two monthly lunches given.

“It’s going to be really interesting to see what happens when investors can choose between a good financial return on their investment or to help feed more kids in need on the same campaign page,” PledgeMe chief executive Anna Guenther says.

PledgeMe.Lend was approved as a p2p lender by the Financial Markets Authority in April, joining the four other platforms Harmoney, Squirrel Money, LendMe and Lending Crowd.

All have slightly different target markets, and PledgeMe will focus on growth companies, social enterprises, schools, co-operatives and communities, rather than individuals looking to borrow.

Although the obvious source of debt funding is the bank, crowd debt funding offers other benefits to a company such as getting its network more engaged with marketing as well as “democratising debt,” Ms Guenther says.

The borrowing company must pay back the money plus interest accrued although may offer other rewards to its lenders. The interest rate, loan time limit and any investor protection are set by the borrower.

Eat My Lunch, which has given more than 180,000 lunches with the help of volunteers, including top chef Michael Meredith, ran a crowdfunding campaign (not for equity) through PledgeMe in August last year.

About 2500 pledgers gave almost $130,000 to set up the company’s commercial kitchen.

Eat My Lunch founder Lisa King says the company has “only scratched the surface,” with 29% of Kiwi kids living in relative poverty, so needs more funding.

Debt raised will be used to launch in Wellington – it currently operates in Auckland and Hamilton – and improve its technology.

“We are heavily reliant on manual processes at the moment to organise ordering and logistics, so we think that, with a more robust technical platform, we’ll be able to scale and service more cities and towns,” she says.

Ms King and her partner Iaan Buchanan, who have held senior marketing roles at the likes of Watties, PepsiCo, Cadbury and V Energy Drinks, founded the company after deciding their marketing careers were no longer fulfilling.

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