Folk2Folk

Overview

Folk2Folk is a peer-to-peer business lender (P2P) specialising in local secured lending. As a P2P lender it matches local businesses looking for finance with individual investors giving both sides a great rate and bypassing traditional banks. Folk2Folk only provides secured loans, meaning that each loan is underwritten with property or land as a form of security. It is based in the Launceston, Cornwall, England, and operates online as well as having high street branches across the UK, currently in Devon, Cornwall, Somerset and Gloucestershire. It is the sixth largest peer-to-peer business lender of funds in the UK having lent over £120m to UK businesses.

Contents

• Overview
• People
• History
• Regulation
• Sectors
• Loan Milestones
• Other Milestones
• Awards
• How it Works
• Ethos
• References

People

Folk2Folk’s Chief Executive Officer Jane Dumeresque was appointed in April 2015. The company chairman is Tim Sawyer, CEO of Start Up Loans and former managing director of internet banking operation, Cahoots. The head of business development and sales, Matt Waterfield, was appointed in June 2016. His former position was general manager for the Middle East & Africa at Friends Provident International.

History

Launched in April 2013, Folk2Folk was set up by Mark Parnall and Louis Mathers, both equity partners of Cornwall-based Parnalls Solicitors. Parnalls is a legal practice with family links to Parnall & Sons Ltd, a British shop and ship fitting and aircraft component manufacturer in Bristol, founded in 1820.

Regulation

Folk2Folk is authorized and regulated by the Financial Conduct Authority

Sectors

Folk2Folk borrowers come from diverse industries including renewable energy, house building, agriculture, leisure facilities and land and property acquisition.

Loan Milestones

After its first year in business (April 2014), Folk2Folk had secured £22m in loans.

By March 2015, Folk2Folk had introduced almost £50m of funding to borrowers predominantly in Cornwall and Devon.

By November 2015, it had introduced over £75 million of funding from its lenders.

In June 2016 the company had passed the £100m milestone of loans funded.

At the time of writing, August 2016, it had secured £107m worth of loans.

Other Milestones

In October 2014, Folk2Folk chose Crediton as the location for its first agency outside of Cornwall. The expansion has helped over 100 new homes to be built and created new jobs.

In August 2015, the firm introduced funding to kick start a mixed-use development project that will help facilitate infrastructure for Cornwall's 6,000-seat sports stadium.

In the same month, it announced the appointment of Stifel, a global wealth management and investment banking firm, as its financial adviser.

In January, 2016, the company announced the creation of a ‘legal panel’ to support its national roll-out strategy. This national network of local law firms carries out the legal work necessary to complete loans in their locality and provides Folk2Folk with local knowledge as part of the security process.

In February 2016, it looked to place shares in the value of £3.5m. The offer consisted of £1.5m in new shares and £2m in shares offered by the founders.

According to Altfi Data: “Folk2Folk has seen year-on-year growth of 433% from August 2015 which compares favorably to the 60% growth of UK P2P (peer-to-peer) business lenders over the same time frame.”

In August 2016, Folk2Folk moved into their new national headquarters at Number One, Launceston.

In August 2016, Folk2Folk pledge support to the Save the High Street campaign.

Awards

In 2015, Folk2Folk was named Best Lending Platform for Small Businesses by news site, AltFi. An independent panel of industry experts and SMEs at the AltFi Awards 2015 said Folk2Folk had “excellent fundamentals, strong values, good customer engagement and clear transparency of fees”. The judges of also highlighted that Folk2Folk's high street offices, which provide an opportunity for face-to-face meetings, was a “key advantage” for its customers, adding: “this kind of access cannot be underestimated or undervalued”.

How it Works

Folk2Folk introduces people with money to invest to businesses looking for finance of at least £25,000. The company requires loans to be secured by land or property owned by the borrower but not the borrower’s home. Lenders are high net worth individuals usually located in the same county as the borrower.

It aims to complete the whole lending process, from application to release of funds, in approx. a week.

This model of allowing people in business to access interest-only funds (and an opportunity for people to lend within their local area) is said to have helped mobilise money in the countryside and re-energized many small businesses that would have otherwise lacked the necessary investment to develop.

According to one lender, it’s a “virtually guaranteed, very low risk lending proposition with a superb rate of return which can’t be beaten by any deposit account”. For borrowers, the interest rates will be the same or slightly higher than from a bank, but, according to one borrower, the speed, flexibility and interest-only repayment make up for it.

Ethos

Folk2Folk is a hyper-local lender based on “traditional values” and a simple, “back-to-basics” way of funding local people and businesses. The company has supported local businesses and injected millions of pounds through investments, by helping local money work for local people. Folk2Folk believes the more business it can help, the more the local economy will thrive. Approximately 75% of Folk2Folk investors are now repeat lenders and 96% of the company’s customers surveyed said their experience has been good or excellent.