P2P and Crowdfunding – The specialist funding boom

I attended the Association of Bridging Professionals AGM last Thursday at the prestigious Haymarket Hotel in Central London, along with approximately 200 of the industries bridging experts, made up of brokers and lenders.

Rob Jupp, AOBP Chairman and CEO of Brightstar Financial gave his opening welcome speech and took a look back at the AOBP’s
achievements over the past year. This was followed by a fantastic round-up of 2014 Bridging Market from a lender’s point
of view, presented by my good friend Joshua Elash, Director of MTF.  Andrew Montlake (Monty as he is known by his peers
and colleagues) - Director of Coreco Group, then gave a presentation on the importance of ‘Social Media for Businesses’
and proved that whether we like it or not, social media is already a vital tool to business and how this will only grow
with future generations embracing social media at a younger and younger age.

Daniel Rhodes, Branding, Design and Marketing Consultant at Daniel Rhodes & Associates then addressed the audience on the
importance of ‘brand’ and the importance and power of brand within your business.

Finally, there was what I considered to be the ‘main-event’ of the afternoon, when five of our industry’s finest bridging
experts sat on a lender panel in a Q&A session, taking questions from both AOBP Chairman, Rob Jupp and also members of the
audience in attendance. The lender panel was made up of industry experts; Alan Cleary (Precise Mortgages), Christian Faes,
(LendInvest), Alan Margolis (United Trust Bank), James Bloom (Regentsmead) and Andrew Bloom, (Masthaven Bridging Finance).


There was a mix of serious industry subjects that were debated, such as compliance, regulation, loan to value limits and
peer-to-peer lending - which for me was of real interest. The concept of Crowdfunding or P2P lending is not new, but has
really rocketed post credit-crunch (much like the bridging sector). The Peer-to-Peer Finance Association (P2PFA) include
members such as Zopa, RateSetter, Funding Circle,Thin Cats, LendInvest, Madiston LendLoanInvest, MarketInvoice, Lending
Works and Landbay (the most recent member to join). The P2P market lent a combined total in excess of £500 million during
the first six months of 2014, and is set to top the £1 billion in alternative funding lent during 2014.  This is very
similar to the rapid rise in bridging lending year-on-year.

The two markets share many similarities and crossover in places with an increasing number of bridging finance lenders
being funded in this way and perhaps not surprisingly, as banks continue to say “no” the alternative lenders increasing
say “yes”. With recent government announcements around plans for investors to be able to earn tax-free interest on
invested funds via ISAs, the sector will be even more appealing than ever for investors looking for a better return on
their funds than standard savings accounts and the high street banks are currently offering.

Whilst the government’s own initiatives (Funding for Lending and Help to Buy schemes) to stimulate lending and economic
growth showed willing, but were questionable in their success, the alternative funding market, including bridging finance,
P2P (such as LendInvest) and funds being lent by the challenger banks (such as Shawbrook, Interbay and Aldermore) would
appear to be having more success and surely it is only a matter of time before we stop referring to these sources of
liquidity as ‘specialist’ or ‘alternative’ as they become more and more mainstream and would certainly put more pressure
on the main banks to address their own systems and procedures for assessing credit and issuing good quality loans.