Educating intermediaries is paramount

By Damien Druce, director and head of intermediary sales at Assetz Capital

The education of intermediaries is crucial to the future success of peer-to-peer (P2P) lending.

At its core, P2P is a simple exchange between investors and borrowers. But it’s becoming more important for third parties to get involved and make the transaction more seamless.

P2P opens up a whole new world of funding options for intermediaries and their borrowers. Rates can be competitive, and there is a far greater element of flexibility which can often result in getting deals over the line much quicker.

It is important that intermediaries understand the finer details around P2P, so they can start to add greater value to clients and offer a level of due diligence during the process. This will help intermediaries make more informed decisions for their clients.

I’m sure everyone in the industry agrees that in order for us to further boost the UK economy, we must make it easier for SMEs to access funding, allowing them to take their business to the next level and ensure productivity remains high.

In my role at Assetz Capital, it is my responsibility to work closely with intermediaries and help them to understand how P2P can meet the needs of their clients. As P2P is still considered as the alternative form, some brokers are not willing to place their clients with a P2P lender until they have utmost confidence in the proposition.

I understand that, in the context of more traditional forms of finance, P2P is still a fairly new option and that some intermediaries are waiting to see how robust the business model is before testing the water. However, we can learn a lot by looking across the pond. The majority of finance to businesses in the US is funded through alternative platforms and I firmly believe that the UK is beginning to catch up – meaning loans through P2P will soon become the norm.

We’ve also heard from some intermediaries that there is a lack of demand from clients for P2P loans. We would argue this is simply a lack of awareness. Busy business owners aren’t always aware of alternative funding options in the market. It is important that we try to break through these barriers and ensure P2P is seen as the viable alternative.

I would always encourage people to step out of their comfort zone and familiarise themselves with the range of financial products out there. If you’re able to sit in front of a new customer and explain the pros and cons of all funding options, that puts you in a much stronger position with the client. Our goal is to partner with intermediaries and help them become trusted advisers who are experts in P2P.

You can read more from Assetz Capital in the March supplement of NACFB Magazine.