As part of our series of Spotlights on alternative lenders, we're interviewing Rob Roscoe, head of funder relations and strategic partnerships at Platform Black. He tells us about what sets Platform Black apart, and gives us the lowdown on trends to watch out for in P2P finance.
Tell us about yourself and why you decided to join Platform Black.
I joined Platform Black because I saw how exciting FinTech is becoming. The internet has had a huge effect on commerce and the way people spend money. We’ve now got to the point where people are happy to invest and save via the internet too, and the effects are going to be dramatic.
While Platform Black is based in Basingstoke, I spend the majority of my time in London. We have strategic partnerships with a number of financial institutions based in the City, and as we develop a more institutional investor base, more and more of our clients on the funding side are based in London.
We have external funding from GLI Finance, an AIM listed investment company focusing on the crowdfunding space.
What’s the typical profile of a successful business seeking finance from you?
Our clients on the borrowing side all share one characteristic – they provide goods or services to large corporations who take time to pay their invoices. This is a feature of business across most sectors, although we see significant take-up in manufacturing, construction, technology and recruitment.
A digital marketing company, for example, could be waiting for a client to pay a £20,000 invoice; meanwhile, they need the money quickly, to pay contractors, and so on. They could access a percentage of that invoice before it is due by auctioning their invoice on Platform Black. Investors compete, thereby driving down the cost to the marketing agency.
In terms of age, we appeal at one end to fast-growing businesses, which can be quite young, and at the other end we serve long-established businesses that appreciate the flexibility and efficiency of our service.
What information should a business have prepared before applying for a loan on your platform?
We need to see information pertaining to the operations of the business, including historical financials and current management accounts. We also need to see supporting documentation relating to the invoice that we are financing, including the invoice itself, PO, a relevant contract, and so on.
In terms of documentation we are not dissimilar to a bank, but we differ in the speed of response and the flexibility of our service, which has no lock-in and can be used for a single invoice.
What’s your advice for a small business seeking funding?
Research the market and think about which of the many alternatives available will work best for you. And don’t be afraid to try something new – just because you haven’t used a type of finance before doesn’t mean it won’t be right for you.
What measures could the government introduce to make life easier for new and growing companies?
I think the government are doing a lot to make P2P lending and crowdfunding in general attractive to investors. In our particular space we want to see changes that will make it easier for borrowers to use our service – to make it easier for SMEs to finance receivables. This means addressing topics such as Ban on Assignment and liquidated damages clauses.
What do you see as the most important trends in peer-to-peer lending?
Up to this point the important trends have been the high level of government support and the spike in awareness among the ranks of financial and tech enthusiasts. I think the most important trend going forwards will be growing awareness and adoption among SMEs and the broader community. Consumers have been quick to adopt P2P borrowing because it’s prominent in the comparison sites, but SMEs, for now at least, don’t have that benefit and need to catch up.
Rob Roscoe is head of Funder Relations and Strategic Partnerships at Platform Black. Platform Black is a market leading alternative finance provider. They provide invoice finance and supply chain finance by way of a completely new market place for businesses to trade their receivables. Follow @platformblack on Twitter.
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