From humble beginnings to national lender for British small businesses, Roy Warren, FOLK2FOLK Managing Director, tells the coming-of-age tale of a successful regional business…
Every idea starts with a problem. Ours was in 2013 when the nation was still reeling from the global financial crisis, banks were withdrawing from rural areas, business funding was drying up, and savers were receiving rock-bottom levels of interest.
An idea for an alternative finance option was conceived to help local people. The thinking was that ‘good folks’ could help other ‘good folks’ by lending their money in fair exchange for a good rate of interest, secured against land or property. This local money exchange was named FOLK2FOLK, and three years later it became a regulated Peer to Peer (P2P) lender, fully authorised by the Financial Conduct Authority.
Motivated by a desire to help financially disenfranchised local and rural communities, FOLK2FOLK spearheaded a Local Lending Movement nationally, setting up office in Gloucestershire to help businesses across the three counties and Midlands. Typically, businesses in large conurbations have easier access to finance, but what about businesses in more sparsely populated areas? We want to help level the playing fi eld in the availability of finance.
The pandemic created a national pause and like others we took the opportunity to reflect. 2020 was a surprising year of success for us. We announced profitability for the first time; became accredited by the British Business Bank to deliver CBILS; reached a milestone lending total of £400 million; and experienced headline-grabbing levels of liquidity in our secondary market. Most importantly we continued to serve business owners and investors.
“We want to help British businesses grow, diversify or adapt following COVID-19.”
Our business has come a long way. Most people knew us as a South West P2P lender for farmers. But, as we celebrate our eighth birthday, FOLK2FOLK has emerged as a national Marketplace lender for British businesses.
Our evolution from P2P to becoming a Marketplace Lender (MPL) is a significant step. A P2P lender only accepts investment from individuals (retail investors), while a Marketplace Lender (MPL) is a platform which accepts retail and institutional investment. We were delighted that Cheltenham Borough Council and Forest of Dean District Council were the first local authorities to register as FOLK2FOLK investors.
But our approach remains human. Over the years we’ve seen changing customer expectations of financial services, and these were brought into sharp focus by our collective lockdown experience.
Business owners and investors want financial services they can trust with aligned interests. During the pandemic we didn’t lose sight of the ‘human factor’ in our interactions. People will remember those financial services who stayed fair; who provided good service; who didn’t fail to support their customers with honest, human communications.
While accessing finance is important, business-owners are looking for more than money. They are looking for funding relationships that fit their needs; finance providers who believe in their business vision and see the humans behind the business. Similarly, when it comes to investing their money, investors will only consider opportunities from platforms, and people, they trust.
Our customers, both borrowers and investors, see that we genuinely have their interests at heart, we want to see them grow and prosper. Going beyond that, we’re always delighted to see the happy by-product of borrowing and lending – job creation or bolstering local supply chains – that results from the movement of money through local economies. We even coined a special term, FOLKOMONICS™, to describe this human impact of finance.
We want to help British businesses grow, diversify or adapt following COVID-19. To fund this, we offer attractive investment opportunities for people and institutions who have money to invest and want to make the most of it.
If you’re looking for finance to grow your business, or looking for an investment to grow your capital, why not talk to us. Perhaps we can help. 01566 773296.