Fourth p2p lender gets licensed today

New Zealand’s peer-to-peer lending sector is set to heat up after new player Lending Crowd received its licence from the Financial Markets Authority today.

The new p2p platform will open for business later this year, and will focus on small and medium size businesses, offering loans up to $200,000.

It will also offer vehicle finance and personal loans.

Peer-to-peer lending matches individual borrowers anonymously with lenders looking to invest, determining the loan’s interest rate by the credit risk of the borrower.

Lending Crowd will manage loans between $2,000 and $200,000, secured by a registered vehicle, a second security of residential or commercial property, or both.  

The business has evolved out of independent financier Finance Direct.

Managing director Wayne Croad says Lending Crowd’s prime focus is to drive down the cost of borrowing money.

“The flip side is investors know that all borrowers have skin in the game, or security of an asset, that’s baked into all loans at inception,” he says. 

“We know from experience business owners have a lot of frustration at the unnecessary bureaucracy when trying to access funds from big banks to purchase assets, obtain working capital or fund business expansion.”

Mr Croad says the finance market is ripe for disruption. “Banks and other finance companies have a one interest rate fits all approach to borrower risk, which is unsuitable for most.

“Borrowers and investors are also paying for bloated overhead structures, such as bank branches, through inflated or deflated interest rates. These are now completely unnecessary and effectively expensive billboards.”

Lending Crowd joins Harmoney – the first p2p lender licensed in New Zealand last September – as well as LendMe and Squirrel Money.

The market may be starting to heat up, but Mr Croad says there is plenty of room for another player.

He says once the business is successfully launched in New Zealand, it will expand into Australia, with trademarks already secured.    

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