Last post: Oct 13, 2013
A new peer to peer lender is creating waves in the market. As we are always keen to work with new peer to peer lenders and have much experience in this sector, we thought a review of Funding Empire would be useful to our clients.
A new peer to peer lender is creating waves in the market. As we are always keen to work with new peer to peer lenders and have much experience in this sector, we thought a review of Funding Empire would be useful to our clients.
Who do Funding Empire lend to?
Loans are provided to creditworthy new business start-ups and existing businesses based in the UK including limited companies, sole traders, partnerships and LLP's.
The funds can be used for a variety of purposes including working capital, one-off expenses, expansion capital and asset finance.
How much can a business borrow?
Between £5,000 and £100,000 although sole traders/partnerships are limited to a maximum advance of £50,000. The loan can be repaid over 6 to 60 months.
Interest rate and charges
The interest rate will be the weighted average of the various interest rates that have been pledged by the lenders who will be competing with one another to give you the most competitive rate. The fixed interest rate could be anywhere between 4% to 15% per annum.
An arrangement fee is payable if you accept the loan offer and varies between 2% and 6% of the amount advanced with a minimum of £250. There are no early repayment charges, no upfront fees and no hidden charges.
Security
Personal guarantees are required from directors/shareholders of limited companies. Loans below £50,000 can be arranged either on a secured or unsecured basis with either asset security or an asset debenture. Loans above £50,000 have to be secured by either asset security or an asset debenture.There are no security or valuation fees.
Procedure
Funding Empire bring together a number of individuals that can lend from as little as £20 each to a business.
Potential borrowers register with Funding Empire who will check identity electronically. A loan application is completed which is assessed by the underwriting team at Funding Empire who carry out various due diligence checks taking 2 to 3 working days.
Successful loan applications are listed on the website of Funding Empire to enable registered potential lenders to make a loan offer at an interest rate set by them in an auction process that lasts for 1 to 2 weeks. Those potential lenders bidding the highest interest rates are removed from the auction process leaving the lowest interest rate bidders in the portfolio. Once the loan amount that was requested has been raised the borrower is offered the loan at the weighted average interest rate. The potential borrower can either withdraw their request for finance, accept it or extend the auction period by 7 days to allow potential lenders to compete over the interest rate yet again in the hope that it can be reduced even further.
If the loan offer is accepted, the appropriate paperwork is completed and, for unsecured loans, the funds are normally released within 2 to 3 working days. If the loan is secured the funds will not be released until the security has been put in place.
The way forward
If you feel that the Funding Empire peer-to-peer lending scheme is of interest just give us a ring here at Choice Loans on 0845 1260350 or fill in our Commercial Loan inquiry form and we'll be in touch to advise you of your options.
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