Post by Paper Street team on Nov 12, 2013 18:58:07 GMT
Paper Street is an online lending community through which businesses source debt capital. We provide a platform for companies wanting to create investment communities to engage with, and raise funding from. Our target market consists of UK SME’s, which are commercially viable with scalable business models, but have inadequate access to funding from the mainstream financial services sector.
We are in soft launch mode, and are working on getting our first company listed on the platform.
This is a new site to me! I would be interested to know a bit more such as what are the minimum lending amounts and rates on the site. The seasoned lenders will be aware of Quakle, which was a company that tried to use "community ratings" without much success, so can you explain what will be different with Paper Street?
The most powerful force in the universe is compound interest - Albert Einstein, 1879-1955
The platform enables lending to established UK SME's that are commercially viable. Once a business requests a loan Paper Street will undertake thorough due diligence and give a proprietary risk rating to the loan.
The size of the loan parts and interest rates or value of return in kind will be determined after discussions between the business and Paper Street.
A key feature of the platform is that members of the platform will be able to discuss the company and the loan with the representatives of the business and other members before investing. Members will also help with the promotion of the loan by providing a rating and comments on the loan and sharing the loan on social networks.
Post by Paper Street team on Nov 12, 2013 22:49:49 GMT
This is indeed a very interesting and relevant topic.
We at Paper Street take the concept of due diligence very seriously, and believe this will ultimately be a key differentiating factor in our business model. To clarify, our primary credit risk assessment process will be based on fundamental due diligence comprising a range of quantitative and qualitative factors using industry standard best practices. In short, we will spend time on understanding, ranking, and communicating the company risk profile to the investor community.
Paper Street has developed its own proprietary risk rating model and underwriting process, which it will use to carry out detailed risk assessment for every borrower that will raise a loan on the platform. The assessment process will cover the last three years financial analysis of the borrower, and forward looking financial projections. Our risk assessment process will result in a rating of every borrower from A to E, the definitions on which are on our website. However it doesn't stop here. We will have a quarterly review process with every company and where required, provide updates on company performance and outlook.
The concept of a community rating is to supplement our credit risk rating. The former is more for the community to rank the popularity of the particular loan issue. It cannot be a substitute for the actual risk assessment process. Separately, but linked to this, we want to create an investment community where people such as yourself engage with each other and voice their views on companies they are following or like.
Yes, we are familiar with Quakle, which took the concept of social ratings to the extreme, i.e; replacing the credit rating with social ratings.
Out view is that the risk factors need to be first and foremost assessed and communicated in a transparent manner to the investor community. We believe this to be inline with the recent FCA guidelines on p2p lending platforms.
On minimum loan amounts and interest rates, this will be a function of the borrower and hence differ from company and company and it's underlying risk profile. More to follow on this...
Hope this addresses to some extent your points. Happy to field any related or other points.
Post by Paper Street team on Nov 20, 2013 9:56:14 GMT
Paper Street enables businesses to borrow from lenders using social networks. We originate funding for established SME's through building communities consisting of their customers, friends, family and retail investors. Our business model facilitates the creation of lender investment communities who engage with each other, and fund companies they like and follow. The community engagement aspect is core to what we believe in.
We promote the concept of risk differentiated return, which will be based on the underlying risk rating of the borrower. Linked to this, we also plan to offer companies the ability to repay investors in cash or products (of the company).
In essence, we want to to create relationships between companies and investment communities. This doesn't necessarily begin and stop at the funding stage.
Having a fundamentally sound credit risk validation process is core to our model. We validate the companies that raise funding through the platform. We have a strong due diligence process, which includes a proprietary risk rating model. Our risk assessment process takes into account a number of financial and qualitative parameters, and focuses on both capacity and ability of the company to repay its debt obligations.
Hi, Just to give you some background and add to the discussion on why we are different. We have previously been investors in lending platforms, but we felt that there was a better way to serve both SMEs and Lenders. We are a social networking platform for business lending:
For Lenders: 1. Strong Due Diligence - We feel that most peer to business lending platforms are not diligencing companies effectively and are focused solely on growth. We have a strong team looking at all business fundamentals; the ability of businesses to pay off debts as well as its past credit history.
2. Post Loan Follow Up - We want to create relationships with businesses. Lenders will be able to engage with companies to ask questions of the business and discuss the investment with other lenders. Would you like to know what happened to the money you lent? Or even get updates from businesses before there are defaults?
1. Flexible loans - Businesses can define the payment frequency, term length, loan size and specifically interest paid in kind. Borrowers can define their loans with as much flexibility as possible. We originate, validate and facilitate loans on our site. Interest rates are defined for each loan. We may move to auctions in the future but this will happen when we reach sufficient scale to ensure risk is priced effectively.
2. Accessing Lenders through Social Networks - We are the first fully integrated platform that allows businesses to market their loan to supporters in and out of their networks. Using Facebook, Twitter and Linkedin, businesses can market their loans to potential investors outside of the platform. Financial services is the last sector to truly embrace social networking. According to Fedanta 74% of consumers rely on social networks to guide purchase decisions. With the rise of mobile commerce, we expect this to continue.
We will have our first loan on the platform in a few weeks, so feel free to check us out. Sign up is free!