Discussion
Has anyone set up a p2p lending business ?
We currently do a lot of bridging finance in our property businesses, and id like to offer a sort of platform like blend etc to be able to offer a lot more to our customers.
I know I’ll get the sceptics replying saying it’s unregulated nonsense etc but I’m just looking to get some help setting up
Thanks
We currently do a lot of bridging finance in our property businesses, and id like to offer a sort of platform like blend etc to be able to offer a lot more to our customers.
I know I’ll get the sceptics replying saying it’s unregulated nonsense etc but I’m just looking to get some help setting up
Thanks
Do you have a good handle on how much it takes (knowledge, resource, and funding) to set up a platform like that? If you haven’t done so already, look at the series raise figures for some of them.
It may be unregulated from an investor perspective, but that doesn’t mean there aren’t regulations to comply with… and of course you have to get comfortable with all of the issues associated with p2p as a business. As a concept it is very simple, but it is very complex and costly to deliver.
A better approach if all you want to do is offer a soliton. would be to not build it yourself but instead partner with someone already in the space on a referral basis or by collaborating to extend their product (which they’ll only be interested in if there is serious flow) or do it without a platform.
It may be unregulated from an investor perspective, but that doesn’t mean there aren’t regulations to comply with… and of course you have to get comfortable with all of the issues associated with p2p as a business. As a concept it is very simple, but it is very complex and costly to deliver.
A better approach if all you want to do is offer a soliton. would be to not build it yourself but instead partner with someone already in the space on a referral basis or by collaborating to extend their product (which they’ll only be interested in if there is serious flow) or do it without a platform.
Think about what a customer facing platform is/does and what back end processing you need and you’ll have your answer! 
At its most simplistic, the “platform” (and I’m going to deliberately misuse this term to refer to a website) in p2p is just an interface layer that allows your user base to interact with your back end processes.
It’d be entirely possible to run a p2p programme without a user front end, or indeed without much automation or integration at all, but you’d still need back end processes that passed muster. These could be manual or automated. Obviously without a front end UI, back end automation, or integration between your front end and back end systems you change the dynamics of your operation (resourcing model, processing velocity, capacity, and user base) very significantly.
The biggest problem is that the less you put out there that gives users pretty dashboards and a warm glow about what they’re investing in, the less likely you are to attract retail money (that doesn’t know how to correctly price risk) and be pushed towards sources of funding that will ask you difficult questions.
It wouldn’t actually be hard to build if you know what you’re doing, and there are some operators (including people with no obvious expertise) out there doing it on a shoestring (albeit I would not suggest investing with them!), but for something as niche as you’re proposing it it hard to see how you’d make a return unless you have some way of building a significant lending book (if you’ve done the maths you’ll realise it needs to be significant) without others deciding to extend their products into that space.

At its most simplistic, the “platform” (and I’m going to deliberately misuse this term to refer to a website) in p2p is just an interface layer that allows your user base to interact with your back end processes.
It’d be entirely possible to run a p2p programme without a user front end, or indeed without much automation or integration at all, but you’d still need back end processes that passed muster. These could be manual or automated. Obviously without a front end UI, back end automation, or integration between your front end and back end systems you change the dynamics of your operation (resourcing model, processing velocity, capacity, and user base) very significantly.
The biggest problem is that the less you put out there that gives users pretty dashboards and a warm glow about what they’re investing in, the less likely you are to attract retail money (that doesn’t know how to correctly price risk) and be pushed towards sources of funding that will ask you difficult questions.
It wouldn’t actually be hard to build if you know what you’re doing, and there are some operators (including people with no obvious expertise) out there doing it on a shoestring (albeit I would not suggest investing with them!), but for something as niche as you’re proposing it it hard to see how you’d make a return unless you have some way of building a significant lending book (if you’ve done the maths you’ll realise it needs to be significant) without others deciding to extend their products into that space.
Gassing Station | Business | Top of Page | What's New | My Stuff