The new peer-to-peer platform is one of four now operating in New Zealand.
The others are Harmoney, Squirrel Money and LendMe.
Lending Crowd is still in the soft launch phase and has not done any marketing to either investors or borrowers.
But founder Wayne Croad said there had been strong interest.
"We were surprised at the number of investors who registered for the services. Before Christmas a number of large investors came in and swallowed up loans."
He said that meant there was a day when there were no loans available to invest in.
Some investors took to online forums such as Sharetrader to question what was happening.
Many said they liked the security of investing through Lending Crowd and wanted to put more money there, provided there were enough loans to do so.
Since then, it had returned to a more normal patter of four to five loans per day.
There have been 64 investors register so far and $670,000 lent.
Lending Crowd offers loans up to $200,000 and specialises in business loans and vehicle finance.
“There is a huge need for alternative financing for SMEs,” Croad said.
“This sector is an engine room for the economy generating a third of GDP but despite this SMEs are often frustrated by the complexity of getting finance when they need it quickly and easily.
“Most find the bureaucracy and high interest rates from existing funding sources, including banks, limit their financial elbow room and ability to grow."
All loans are secured by either a registered vehicle or vehicles, a second security of residential or commercial property, or a combination of both.
Lending Crowd said this would reduce the cost of borrowing.
Lending Crowd will calculate an actual annual rate of return for investors after 90 days and provide all investors with net annual return percentages on their investment dashboards at the end of six months of trading history.
It will offer all borrowers the option of an insurance product to cover them for death and terminal illness. In early 2016 this will be expanded to include illness, bankruptcy, hospitalisation and redundancy. The aim is to mitigate risk and provide reassurance for investors.
| « Lending Crowd soft launches | Harmoney switches to real-return reporting » |
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