SCOTTISH Enterprise is to make £2.75 million of funding available to small and medium sized enterprises via the peer-to-peer lending platform LendingCrowd.

LendingCrowd chief executive Stuart Lunn said the business had approached Scottish Enterprise after the Scottish Government last year published a report highlighting the difficulty small and medium sized enterprises (SME) have in accessing funding in the £150,000 and below bracket.

“We proposed to Scottish Enterprise that we felt that’s exactly where we sit - it’s a space we’re engaged with and understand,” Mr Lunn said.

“This will help Scottish Enterprise with their aim of closing that gap and it will enable us to build our client base and lend out more.

“Hopefully the whole project will become self-fulfilling.”

Scottish Enterprise’s investment arm, the Scottish Investment Bank (SIB), is acting like any other investor on LendingCrowd’s site, with its cash being distributed across a portfolio of loans and earning a commercial rate of interest.

The average size of loan made via LendingCrowd is £75,000 but SIB will not provide the full amount being sought by any of the SMEs on the platform. It expects to lend between £5,000 and £250,000 on a case by case basis.

“The money will be used in such a way that they are participating in loans rather than fully funding them – they are looking to leverage the money they have with other people’s money,” Mr Lunn said.

“The more money that comes across the platform the better because we can scale up.”

From SIB’s point of view the deal will allow it to invest in a broad range of Scottish businesses that LendingCrowd has done credit checks on.

SIB head Kerry Sharp added that the deal will “increase competition in the marketplace and provide greater diversity and