THE LendingCrowd funding operation has enjoyed a surge in business following the Brexit vote, which it said reflected expectations the Bank of England would cut interest rates to boost the economy.

Edinburgh-based LendingCrowd has developed a crowd funding platform which links companies that want to borrow with investors that have cash that they are willing to lend.

The company said applications for loans increased by over 500 per cent in July, compared with the same month last year although many fear the June vote in favour of the UK leaving the European Union will result in a sharp slowdown in growth in the UK economy.

The Bank of England cut the base rate by 0.25 percentage points yesterday, to a fresh record low of 0.25 per cent, as part of a package of moves designed to stave off the threat of recession.

However LendingCrowd believes the prospect of an official rate cut may have encouraged firms to consider expansion moves in the expectation that the cost of borrowing in the market to fund deals was likely to fall. Asset prices may fall amid uncertainty about prospects for the economy.

“Deal activity reached record levels during July, with a definite post-Brexit effect in the corporate dealmaking market following on from June’s EU referendum,” said chief executive Stuart Lunn.

The increase in activity at LendingCrowd contrasts with reports that the Brexit vote has prompted some firms to put mergers and acquisitions activity on hold until the outlook is clearer.

LendingCrowd said the total value of applications rose by over 600 per cent annually in July.

It expects the rate cut to increase interest in the platform among potential investors given the prospect that banks will cut the already low rates paid on many savings accounts.

“What is also noteworthy, on the back of widely predicted interest rate cuts, is that more investors are signing up to invest on the platform,” said Mr Lunn.

LendingCrowd did not give details of the value of loan applications or the number of enquiries received from potential investors.

Founded by Mr Lunn with serial technology entrepreneur Bill Dobbie, LendingCrowd made 34 loans worth a total of £1.75 million in its first year of operations, to 30 September. It signed up 1100 investors.

The venture has recruited Michael Allan as director of operations. He was formerly chief operating officer of IT analytics specialist Sumerian.