Peer to peer lending market gets new risk-capital entrant | City A.M.

THE BURGEONING peer-to-peer (P2P) lending market will get a new entrant today with the launch of Wellesley & Co, a shareholder-backed lending platform risking its own cash.

The firm, co-founded by Graham Wellesley, has been backed by £5m of its four shareholders’ cash. The structure makes it the only known P2P to put its own cash into the loans.

“We spotted a gap within the market which to date has not been addressed,” Wellesley said. “We are bringing to the market for the first time an asset backed model where the operator is taking a stake in every loan.”

The P2P lending market is predicted to surge over the next few years as companies look for alternatives to traditional bank lending. It is currently worth £550m but some estimates suggest it will increase to £1bn by 2016.

Wellesley said it will offer returns of 5.5 per cent of up to £1m, secured on a lenders’ property. It added that the platform will offer property investors and developers more access to funding.

Alongside Graham Wellesley, shareholders Anthony Fane, Colin Emson and Andrew Turnbull are also stumping up cash.