Fever Pitch

Crowdfunding is generating excitement of “fever-pitch” levels, but it needs to be regulated by the Financial Conduct Authority (FCA), according to Richard Martin of Central Union Partners (CUP). CUP is a consultancy providing alternative financing for property projects and investments and linked to peer-to-peer platform ThinCats.

Martin has penned a piece in Real Business in which he argues that while the funding gap left by banks retrenching from SMEs and medium-sized businesses definitely needs plugging, it is important that lenders and borrowers approach the peer-to-peer lending sector with due care and attention. The covenant strength, or likelihood of repayment, for different loans varies widely and so it is a positive that the FCA is encouraging caution and a certain degree of investment knowledge before enabling individuals to take the plunge and snap up loans.