1pm, the Bath-based specialist lender, has opened up a new funding channel after becoming the first UK-based loan originator to join Mintos, a leading online marketplace for financing business loans via global retail investors.
The firm, which is listed on the London Stock Exchange’s AIM market, joins around 30 other loan originators from across the world in Mintos, which since launching in 2015 in the Latvian capital Riga has become the world’s largest marketplace of its kind.
The move means retail investors can participate in a range of loan types originated by non-bank loan providers.
1pm said it would be able to reap the benefits of the peer-to-peer lending model in financing loans that have traditionally been funded on its own balance sheet.
By becoming a loan originator on the marketplace, 1pm will be able to harness the resources of the fully developed fintech capability and instantly reach around 50,000 registered retail investors across the world for the first time – so creating an important new funding channel.
The firm said the leverage created by this new funding source will allow it to increase the number of loans written through its loans division without taking on significant additional risk of default.
Access to the Mintos marketplace created greater lending flexibility and more growth potential than a solely balance sheet approach to lending, 1pm said.
All business loans assigned by it will be in sterling and up to 90% of each loan originated and made available on the Mintos marketplace will be assigned to investors on a non-recourse basis. The Cooperation Agreement starts with an initial six-month trial period.
1pm CEO Ian Smith said: “An important part of our strategic growth plan is to harness the benefits of financial technology. By joining the Mintos marketplace, we will now be able to accelerate our loans business origination without increasing risk and to access retail investors globally and efficiently, a funding source that would be unavailable to us without this digital capability.”
1pm has six trading subsidiaries operating from seven sites across the UK employing 158 staff and serving more than 16,000 small and medium-sized businesses.
The firm’s operations are organised into three product groups – asset finance including vehicles, loans and commercial finance.
In the six months to November 30 its increased pre-tax profits by 77% to £3.6m on revenue up 74% to £13.9m following a string of strategic acquisitions.
