IN this week’s SME Focus we hear why two veterans of the technology market decided to move into the business of alternative finance.


Stuart Lunn.



What is your business called?


Where is it based?


What service does it offer?

LendingCrowd helps SMEs raise loan funding from individual investors. This is a form of crowdfunding, known as crowdlending and also peer-to-peer or peer-to-business. At the core of our business is a highly experienced credit team who carry out a comprehensive risk-assessment on borrowers to ensure that we present good quality lending opportunities to investors. Significant investment has also gone into building our own bespoke technology platform to make the service as easy as possible to use.

Whom does it sell to?

On the investor side we have a broad range of individual clients of all ages and levels of financial sophistication. Many people start by lending out smaller sums, say from £100 upwards, then continue to lend out more as they become comfortable with the platform, understand the risks and realise potential returns. On the borrower side, the focus is on SMEs that require loan funding, often for working capital, expansion and growth. Many of these companies now bypass the banks completely and go straight to alternative finance providers.

What is your turnover?

The business is in an early growth phase so turnover is not significant at this stage. However, we’re pleased to see traction building and we have completed 34 loans totalling £1.75 million to SMEs in Scotland and across the UK.

How many employees do you have?

Eleven employees and five contractors.

When was it formed?

Back in January 2014 my co-founder Bill Dobbie and I started scratching our heads as to how to build the business. By September that year, we had built a viable platform and an infrastructure that allowed us to formally launch on 1 October 2014.

Why did you take the plunge?

Bill Dobbie and I had been talking for a while about different financial technology business models and where we thought there was a gap in the market. Bill has an excellent track record of starting and sustaining successful business including iomart and Maxymiser while I had been working with high-growth tech companies providing investment banking services and supporting their capital funding for over 10 years. So given our respective backgrounds in technology and stockbroking, crowdlending played to our strengths and the lack of a Scottish platform gave us a geographic region to focus on.

What were you doing before you took the plunge?

I’d been doing some consulting work but really trying to work out what kind of business I wanted to set up. Prior to that I worked in the City as an equity analyst, focusing on technology companies.

How did you raise the start-up funding?

Bill and I have both funded the business throughout, although we are currently assessing the best route to scale up. We’ve also committed personal funds to each loan and will continue to participate on the platform.

What was your biggest break?

Well, we are delighted to have just won the Herald Digital Business Award last week in the business to business category – so maybe this is it?

What was your worst moment?

Realising that despite years of being involved in fundraising, driving investors to the site was much tougher than we’d expected and we’ve learned a lot over the last six months. We want to continue to increase awareness of crowdlending and in particular take advantage of the April 2016 launch of the new Innovative Finance ISA which will bring crowdlending into a mass-market environment.

What do you enjoy most about running the business?

Building up a business from scratch has been extremely hard work but now we’re over a year down the line, there’s a real sense of achievement looking at how much we’ve achieved in this time. In particular I’m really proud of our technology team given that they’ve delivered a completely new platform that is really user-friendly. It’s also been extremely satisfying to see how LendingCrowd has helped so many companies to develop their potential by expanding, taking on new people and making a real contribution to the economy.

What do you least enjoy?

Admin. It’s gets in the way. However, we’ve focused on processes and systemising what we do so I’m having to get less involved. Building the right team has definitely helped.

What are your ambitions for the business?

To become one of the UK’s leading alternative finance providers.

What are your top priorities? We need to build scale by increasing the number of investors and volume of loan funding on the platform. We can then help to fill the acknowledged gap in financing SMEs to a much greater extent. The infrastructure is in place and we are well positioned to leverage the investment we’ve made to date.

What could the Westminster and /or Scottish Governments do that would help most?

Westminster has actually been doing a lot to encourage alternative finance providers, including announcing the Innovative Finance ISA, the new tax-free interest personal allowance (which includes interest earned through crowdlending) and the work of the British Business Bank (BBB). Unfortunately, LendingCrowd hasn’t been a beneficiary of the BBB funding but we see a significant opportunity to work with the Scottish Government to facilitate funding to Scottish SMEs. This is in line with the Government’s own research which highlights a serious issue in sub-£1m debt-funding in Scotland.

What is the most valuable lesson you’ve learned?

People don’t always have the same mentality as me.

How do you relax?

Unfortunately being in start-up land combined with a two-year-old child and six-month-old twins means that relaxation won’t be achievable until 2017 at the earliest.