Tag Archives: Direct Lending

LFP165 – Relationship Banking – the Surprising Answer to the Needs of Growing Techs? Tom Butterworth MD Silicon Valley Bank

In a world ever-more focused on transactions and digitisation what place is there for relationship-banking? Apparently not a lot, yet the market-leader – SVB – wholly embraces this approach over the whole journey from Startup to FTSE. In this show we discuss what relationship banking means in the 21stC for one of the hottest sectors in the market.

SVB is the commercial bank for high growth companies and the biggest banker for PE/VC firms. In the UK they have 4,000 clients, over one thousand of which are pre-series A. As we heard in LFP163 SVB are also the world leaders in Venture Debt.

Tom Butterworth is the Head of Early Stage at SVB in London and joins us today to talk about the importance of relationship-banking, of looking after the customer and of viewing the financial aspect of the relationship across the whole life cycle of high growth companies.

We discuss how serving a vertical can enhance the clients in many ways as well as produce the deal flow to make the approach commercially viable – knowing a single sector in great depth leading to, inter alia, a much deeper understanding of credit-risk than simply putting numbers in a spreadsheet.

Topics discussed in this show include: Continue reading

LFP163 – A Deep Dive Into Venture Debt – An Important But Underused Funding Option? w/Alex Baluta CEO Flowcap

What is called Venture Capital is most of the time actually Venture Equity – the predominant funding model for Startups/ScaleUps. But in many sectors, Fintech included, some UnlistedCos are Very large – valuations in the billions. These are no small companies. Traditional corporate finance theory says (correctly) that equity is expensive and should always be geared with debt. After all it’s what most people do when they buy a house. So for larger Fintechs and other fast-growth sector Venture Debt may well be an important tool.

Alex Baluta is CEO of Flowcap a listed Canadian provider of Venture Debt and with nigh-on thirty years of experience in investment banking as a whole is well placed to contextualise the use and abuse of both equity and debt.

My simple takeaway is with “small companies” getting ever larger that the equity:debt mix for their capital is a must-consider for their Boards – just as it is on BigCos, next to none of which fund with 100% equity. In terms of debt solutions for the growing firm Venture Debt is an avenue which must be investigated at a certain point/stage.

Topics discussed on the show include: Continue reading

LFP159 – “Payments Terms As A Service” w/Lara Gilman iwocapay

Iwocapay is a new business venture from iwoca, one of London’s leading Fintechs, to offer payment terms as a service. Metaphorically this is a cross between a domestic version of trade finance – helping finance a supply chain – with an oldschool (and rather harder to get these days) bank overdraft – ie a flexible facility which can be paid up and down at will. PTAAS means that suppliers get what they want – goods out, cash-in whilst customers get optionality to manage payment terms as proves most convenient to them.

 In this world of post-covid destruction of the economy in the UK small businesses have had the largest hit ever. Fintech cannot sort that but it can oil the wheels of financing supply chains and as we know most businesses go broke due to inadequate cashflow/financing than as they are making losses.

Thus now more than ever innovations for the small businesses that are iwoca’s core market are needed.

In this episode Lara Gilman,, co-lead of iwocapay, takes us through this. Topics discussed include: Continue reading

LFP112 – FCA Proposes Undemocratisation: Taking the “P” Out of P2P with Ryan Weeks Editor AltFi News

You may not be rich, you may not be “sophisticated” but what kind of Stalinism is it that means The State can order you re what you can and cannot do with your money?!?

The entire ethos of “P2P” – the heart and most successful sector of Fintech – was connecting ordinary people, enabling lenders and borrowers to meet via the internet and both get a better deal than they would going through the megabanks.

Now if current FCA proposals go through this is all but dead – Ordinary Joe can keep borrowing (the system loves people being indebted) but the lending will only be unrestricted for Ingsoc Party members (“rich”, “sophisticated”) – Ordinary Joe will be capped at 10% of his investable assets.

It is also a constitutional outrage. The FCA’s job is to regulate platforms and ensure the bad/dodgy ones get shut down. The FCA is undemocratic and unelected – unlike our MPs we cannot vote them out of office – how dare they “regulate the people”? Regulating the people is something that ought to go through parliament not an office in Canary Wharf.

This topic undermines everything we have seen since the Magna Carta in 1215 became the first piece of legislation to limit the arbitrary power of the monarch.  Are we to return in this area to early Medieval Monarchical powers?

Ironically it was the UK’s Zopa that invented the UK globally. For a long time the UK State as a whole was highly supportive of Fintech and P2P. Now with government distracted, over a dozen years of success (&the records of the leading platforms have been far far better than bank returns for a diversified portfolio). Now only Party Members can fully avail themselves of these excellent returns. “To them that hath shall more be given”.

Ryan Weeks is the editor of AltFiNews the longest running AltFi news site, a real insider in this area. He is also the host of the successful Millennial Money Matters podcast and author of a best selling book as we shall come on to.

He joins us to discuss the Proposals in the round. Its a long document after a long consultation. Some proposals are sound, some so-so but this one is just plain wrong.

We all make mistakes and these are proposals. I call on the FCA to rethink this marketing restriction proposal. Already we have seen plenty of platforms changing from being P2Ps to avoid increasingly Draconian legislation. Already we have seen institutional money flooding into the sector. The whole purpose of the Fintech revolution was to make FS something of the people for the people. Let us keep it that way.

Topics discussed on the show include: Continue reading

LFP111 – The Role and Purpose of P2P Aggregators with Iain Niblock CEO Orca

Using “P2P loosely there are over fifty to invest in, all with different standards and approaches. It’s a “fragmented and complex” market. Professionals do much due diligence before investing. How is an individual investor to cope? One strong contender for The Answer is “Aggregators” who do the due diligence, sign you up with said platforms and offer model portfolios

Iain Niblock co-founder and CEO joins us today to lay out the problems and challenges of investing in “P2P” which in practice covers many approaches in a diverse landscape.

Orca are also a rare example of a well-regional Fintech being based in Northern Ireland with an office in Edinburgh.

Topics discussed on the show include:  Continue reading

LFP103 – Online Lending/Borrowing (Formerly P2P), Past, Present, Future with Christian Faes CEO Lendinvest

Once upon a time P2P was a simple thing. Now it’s more accurate to see it as online lending and borrowing. Models vary, regulation varies, the most successful platform was started by a bank, direct lenders have wholesale flows in funding retail or corporate outflows, others have just retail funds and others mixed.

Quite a complex state of affairs and in this episode Christian Faes joins us for a wide-ranging conversation about where this all came from, where it is and where it is going.

Lendinvest itself is no longer a P2P in the current definition but an online investment platform which is itself only one of their many channels.

Topics discussed include: Continue reading

LFP083 – Matchmaking Lending and Borrowing with Conrad Ford CEO Funding Options

Conrad was on the show back in LFP020 since when he has built Funding Options (strapline “your free marketplace for business finance”) into one of the most successful London Fintechs. They were chosen as one of three UK government mandated SME Referral Portals, are the largest of those by an order of magnitude, increased revenue fourfold last year, are on target to triple again this year as well as being on target to be the UK’s largest introducer of working capital finance.

Funding Options essential task/service is lining up all the many SME borrowers out there with relevant sources of Finance. A task made all the harder by the plethora of lenders and the many types of lending finance available.

How has this task evolved over the past 2.5yrs?

How is lending right now?

How is borrowing?

Topics discussed on the show include:  Continue reading

LFP079 – Diving Into UK Challenger Banks with Darren Meek London FS Lead at PwC

Twenty or so new banking licences have been granted since 2010. The UK Retail Banking Sector is incredibly diverse but this is often disguised by the single label of “Challenger Banks” which hides far more than it reveals. UK Retail Banking is a very diverse sector with players with very different focuses and motivations.

In compiling their report “Who Are You Calling A Challenger Bank?”, PwC has interviewed dozens of CEOs and senior executives and, worked with YouGov to establish consumers’ views and preferences. In doing so they have produced a grounded, well-researched analysis (it’s free – check it out) that sheds light on how competition is improving customer choice and driving innovation in UK retail banking.

Darren Meek has 26 years at PwC and joins us today in conversation about the must-know, main important themes of the vibrant scene that exists today.

Topics discussed include:  Continue reading

LFP066 – Solving Fintech’s Profitability Problem with Bob Jones CEO & Founder Blue Motor Finance

LFP Blue Motor Finance2016 is the year Fintech realised it had to aim for making a profit. Very few do and for the tiny handful that do its mostly “minimal”. Solving this problem is absolutely vital for the Fintech revolution. This is the story of a Fintech that has done just that – satisfying customers, staff and shareholders. Blue Motor Finance has gone from 12 to 100 staff, 0 to 40 people “on the road”, £0 to £200+m loans, and £0 to seven-figure profits in just two years. A phenomenal achievement, and by a firm not widely known in the broader Fintech world.

Bob-JonesSo listen up and find the real secrets of balanced Fintech success as CEO and founder Bob Jones shares how a lifetime’s lessons (having been in asset finance for over 50 yrs) has enabled him to reach these goals.

Bob has been a CEO of some big companies, many of which he turned round. An management buy-in provided a bridge from the top roles in BigCo to starting from scratch and leveraging all that experience.

So without further ado topics we discuss include: Continue reading

LFP064 – P2P in the US, China and UK with Peter Renton

Lendit US 2017After organising nearly 1,000 folks in the O2 for Europe’s largest P2P conference ever I managed to grab Peter long enough to have a fascinating tour of the globe and P2P sitrep in the three major hubs.

Peter Renton PhotoPeter Renton has perhaps has more of a broad and deep understanding of P2P worldwide than anyone.

When he first came on the show way back in LFP015 he shared with us the fascinating history of US P2P with its hugely up and down roller-coaster road.

Since then he has created the world’s go-to conferences on P2P in the US, China and Europe which gives him a unique insight into what’s what and where.

It’s a big world and P2P is a vast domain these days so there is plenty to discuss. Key topics are: Continue reading