FOLK2FOLK is a peer-to-peer business lender (P2P) specialising in secured lending for rural businesses and SMEs. It matches businesses looking for finance with local individual and institutional investors who receive a fixed interest rate of between 4.5% and 9% p.a. secured against UK land or property. Lenders receive the same interest rate that the Borrower pays, with FOLK2FOLK making its profit from an arrangement fee and annual renewal fee charged to Borrowers.
|Industry||Financial technology, Peer-to-peer lending|
|Headquarters||Launceston, Cornwall, UK|
|Roy Warren, Managing Director
Tim Sawyer, Executive ChairmanLouis Mathers, Director and Co-Founder
Commercial and industrial loan
Formed in 2013, FOLK2FOLK exists to help create and sustain financially and socially successful local communities, empowering local businesses requiring debt finance by matching them directly with investors through its Peer-to-Peer lending platform. FOLK2FOLK enables Lenders to participate in supporting local UK businesses to grow and thrive driving positive impacts in local communities, creating job opportunities and contributing to the UK economy.
FOLK2FOLK's Managing Director is Roy Warren, who was appointed in September 2019 having been the company's Head of Risk & Loan Portfolio for four years. FOLK2FOLK's chairman is Tim Sawyer CBE, CEO of Bank of Maldives and formerly Chief Investment Officer of Innovate UK the investment arm of UK Government and a former CEO of Start Up UK.
FOLK2FOLK is authorized and regulated by the Financial Conduct Authority
By August 2017 it had secured £176m in loans.
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.
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 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 and institutions with at least £20,000 to invest to businesses looking for finance of at least £50,000. 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 often located in the same county as the borrower.
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.
FOLK2FOLK promotes itself as 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. FOLK2FOLK reports that approximately 75% of investors are repeat lenders.
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