The evolution of peer-to-peer lending in the bridging market

The evolution of peer-to-peer lending in the bridging market




The world of finance, once dominated by large global banking giants, has, since the financial tsunami in 2008, been in a state of uncertainty and change.

The world of finance, once dominated by large global banking giants, has, since the financial tsunami in 2008, been in a state of uncertainty and change. But out of the ensuing funding crisis alternative sources have risen. Yasin Patel, Director at Mayfair Bridging, explains the evolution…


The most striking aspect of change since 2008 has been a revolution in the way that finance is raised, particularly here in the UK. The withdrawal of many banks and reduced lending of many more, along with the highly restrictive and cautious criteria now governing the mainstream lending market, has led to funding shortages for individuals and businesses. It has also had an unwelcome knock-on effect for savers and investors who have seen the value of investments fall and rates on interest paid on traditional ‘safe’ investments slashed.

This perfect storm of diminished lending capacity, growing demand for funding, along with private investors seeking more attractive returns, has created an environment to bring investors and those seeking funding together in what has become one of the financial success stories of the past few years. ‘Peer-to-peer’ lending, as it is known, offers a mechanism through which investors can invest directly through a third party in businesses or other investment opportunities through a UCIS (Unregulated Collective Investment Scheme).

Pioneering its own new scheme, bridging specialist Mayfair Bridging has developed an offering which improves upon existing collective peer-to-peer funds by placing the investor’s needs at the heart of their proposition.

Unlike other schemes, where investors’ money is pooled for an asset manager to apportion, Mayfair’s funders can choose the bridging deals in which they want to invest. Also, in the interests of full disclosure, investors have the benefit of access to all the documentation around a fully transparent, underwritten case and are able to perform their own due diligence through their own nominated third parties. The important distinction is that existing schemes have not provided investors with the flexibility to choose the deals in which they want to be involved, offer the complete overview of the case or the option to make their own assessment. 

The rise of peer-to-peer lending proves that it is perfectly possible to bring together investors and borrowers without bank intervention. But innovation in this field is important, so improving on the existing template, as Mayfair is doing, is part of building credibility for the overall proposition among a wider audience of potential investors, who are not only looking for a good return but also want to be fully aware of the background to the investments they are making. 

Mayfair Bridging is regulated by the FSA for its lending activity, but is also one of the few authorised to market this type of investment to professional advisers and their clients. Having received its authorisation in December, Mayfair Bridging is rolling out the scheme through IFAs and other professional advisers across the UK.

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