Money&Co.'s plans to apply for a UK banking licence next year to allow the taking of deposits from retail investors are no secret. Less well-known are the exciting new lines of business coming up. Watch this space.The convergence of mainstream and alternative finance is underlined by a move from HSBC to offer a app aimed at small businesses seeking funds for growth.HSBC is set to launch its own digital bank called Kinetic to take on NatWest's Mettle and challenger bank Tide in the SME banking space, according to AltFi."Kinetic's website went live this week and the bank opened registrations to join its waiting list to beta test the app.HSBC looks set to aggressively take on its mobile-only rivals with a £100 Amazon gift promotion for early sign-ups. Kinetic is said to fully launch to the public in 2020, and has been created by HSBC "based on real-life insights from over 2,400 UK businesses".
Loans LatestMar-Key 6, rated A+, is 29 per cent filled at the time of writing. The yield on offer is 7 percent. Platform lending of the kind we facilitate here at Money&Co. can be a lucrative activity. The average yield achieved by our registered lenders over more than five years of loan facilitation on this platform is more than 8 per cent, before we deduct our one per cent charge. That retREAD MORE
Platforms like ours are relatively new kids on the block in the world of high-yield products. It's so new the terminology hasn't settled down. It's known as platform lending, marketplace lending or peer-to-peer (P2P) lending.The novelty is relative. Platform lending began in the US in the depths of the 2008 credit crunch. The banks simply stopped lending to each other and also to their business clients. The culture of the internet stepped in to fill the breach created by this crisis of capitalism. It's interesting to note that Bitcoin's first "reference implementation" (geek-speak for launch) occurred at this time – also, allegedly, to deal with the failure of mainstream finance.The essence of platform lending is to bring individuals seeking a good return on capital together with carefully vetted small companies seeking funds for growth. The role of the lending platform is to act as an administrative intermediary – to do the risk analysis on would-be borrowers, collect the interest on the credit extended by the individual lenders and pay it out. Again. Lending platforms, with their communities of registered lenders, are plugging the funding gaps left by the banks.Lending can be a lucrative activity. The average yield achieved by registered lenders at Money&Co., for example, is more than 8 per cent after more than five years of loan facilitation. That return is gross - before we deduct our one per cent charge. Nevertheless the average return has handsomely outperformed retail price inflation, which has averaged around two per cent over this time.There is more to come on this topic.