Last year Liverpool-based Fruitful successfully raised £140,000 for 8% equity in only two days on Crowdcube. Along with a private investment of £380,000, the company launched its new peer-to-peer lending platform today, on November 24, 2014. Fruitful is a platform for “everyday savers and full term commercial mortgage borrowers,” and is one of many companies starting to take advantage of the shift away from banks and toward direct lending.
Fruitful was founded by 25 year old Luke Barnes, a design engineer who found himself frustrated at the lack of alternatives to banks that offer low interest rates or reduced risk options for high interest investments:
“After firsthand experience of P2P saving, I felt there was a gap in the market that could offer a much easier and more secure alternative for savers like me. When the investment world backed me, I knew I was launching a viable, significant product. I recruited a stellar team and together we have built a new style of financial technology company from the ground up with simple and accessible methods of saving, which are incredibly secure.”
Customers are not charged to open an account, there are no fees, lock-ins, or maximum amounts (the minimum investment is £250). There are also no charges to withdraw fees and the process takes only a week. Savers are paid back 6% interest and the company assures them that their rates will always be at least 5% over the Bank of England’s base rate.
One of the security features included in the platform to help guarantee people’s savings is the fact that Fruitful will only lend to low risk borrowers who pass a credit check. According to an article in the Mortgage Finance Gazette:
“Repayments are also backed by personal guarantee so a second person has to sign a contract, agreeing to make the repayments if the borrower is unable to do so … Instead of lending a depositor’s money to one mortgage, savings are lent to a number of different borrowers, which spreads the risk … If a borrower misses a repayment, the Fruitful Canopy Fund acts as a type of insurance fund meaning savers still receive their interest.”
The company is also hoping to create nearly 80 jobs in Liverpool by the end of the year as they start to grow. They have partnered up with Send a Cow in their efforts to be an ethical finance company; for every new customer who deposits at least £1,000, Fruitful will buy a dairy cow for a family in Africa who needs it.
The company’s Director of Lending, Shane Tibbitts (formerly with the Bank of Ireland Group) is looking forward to shaking up the market:
“Once we’ve launched our tax-free ISAs we will see further demand for Fruitful products. For business borrowers, Fruitful will become a welcome alternative in the commercial mortgage sector at a time when business is finding access to commercial loans a challenge. Having worked in the finance sector for more than 30 years, I am certain that Fruitful will become an incredibly popular savings account and go-to for business mortgage borrowers.”
Currently they are sending out small numbers of invitations for savers to participate in their platform in order to maintain manageable growth. Interested savers can request an invite on their website.
