PEER-to-peer platform LendingCrowd is offering new investors a 2.5 per cent joining bonus as it seeks to increase the pot of cash it has available to lend to small and medium sized enterprises.

The Edinburgh-based firm, which matches investors with small businesses seeking finance, will pay the bonus to anyone investing £5,000 via its site by the end of November.

Chief executive and co-founder Stuart Lunn said the offer was being made both to raise awareness of peer-to-peer lending as a source of alternative finance and to boost the number of investors LendingCrowd has on its site.

“Particularly in Scotland there remains a lack of awareness and education around alternative finance in general and peer-to-peer within that,” he said.

“As a platform we’re looking to scale up – we’ve now been going for almost two years and we have a lot in place in terms of the infrastructure, systems and processes we have invested in.

“We’re in a good place to be ramping up the number of transactions we are doing,” Mr Lunn added

LendingCrowd lends money mainly to SMEs, with loans tending to be in the £250,000 and below bracket.

All companies seeking to raise cash via its platform undergo the same credit assessments as they would at a high street bank with the former head of corporate and commercial credit at Royal Bank of Scotland, Ian Cunningham, leading the credit team.

Once those seeking a loan have passed the eligibility tests they are listed on the LendingCrowd website, where investors can allocate their money between a number of different loans.

To date 2,000 investors have lent a total of £7 million via the website, with Mr Lunn hoping the joining bonus will attract around 200 additional investors.

Although Mr Lunn noted that peer-to-peer lending is seen as a safer investment than crowdfunding, where investors buy a small stake in a business, he stressed that as it is a form of investing rather than saving the cash invested is not protected by the Financial Services Compensation Scheme.