Peer to peer (P2P) lender Ratesetter received another round of good news as CEO Rhydian Lewis announced publicly the British Business Bank will start lending through the Ratesetter platform on July 21st. The government owned entity was created to make financial markets work more effectively for small business.
We are pleased to let our customers know that the British Business Bank is to start lending through RateSetter, effective from next Monday, 21st July. The British Business Bank is a new Government-owned financial institution set up with the goal of making financial markets work better for small businesses.
Apparently Ratesetter has been in discussions with the the bank for more than 18 months with the arrangement recently finalized. The British Business Bank will target its lending exclusively at RateSetter’s business loans: individuals, sole traders or partnerships borrowing for business purposes. There is an initial commitment of lending £10 million via Ratesetter. Lewis called this amount a “sensible figure” stating;
“.. a fair match for the loan demand over the three year deployment period, without in any way swamping our market. The Bank will lend at the same rate as our existing 13,837 RateSetter lenders – this is important to us because we are proud of the way our marketplace sets rates, and important to the British Business Bank too as they want to lend on equal terms.”
Lewis continued discussing the government relationship;
“Talking openly, I am not always convinced of the merits of government involvement in finance. My personal view is that government is right to scale back its implicit back-stop of banks in order to eradicate the stifling effects of “too big to fail”.”
The Ratesetter founder does believe in government acting as a catalyst for change. In this situation he believes the UK has recognized the potential of peer to peer lending and they are sending a message to businesses and banks there are new alternatives for financing today.
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