PRESS RELEASE: Crowd-Funding comes of age with the launch of R100m Business-to-Retail loans on the RainFin Credit MarketplaceDec 1, 2016 RainFin In the news Credit Marketplace
As the pioneer of financial services disruption in the lending industry, RainFin’s new Business-to-Retail product makes it possible for corporates and established businesses to participate in the mega-trend of Crowd-Funding / Crowd-Lending.
Prior to this launch, the Credit Marketplace has been primarily used by small businesses seeking small (less the R750K) loans for working capital. Now any size company can also benefit from raising larger capital amounts, outside of the conventional banking system i.e. directly from a previously untapped funding source: the retail market, institutional lenders, asset managers and even their existing customer and supplier bases.
Without the use of a Credit Marketplace, large businesses had no real cheap way of accessing retail and institutional lenders efficiently and quickly. The RainFin credit team is able to list loans on the Credit Marketplace that are either fully asset backed or rated businesses with significant trading history and assets. Once on the marketplace lenders are able to lend as little as R1000 or as much as R10m to any borrower. RainFin collates these fractional participations and issues one consolidated loan to the borrower.
Established businesses will now, for the first time, also be able to access institutional funds, which have previously been reserved for corporates via the corporate bond market. Corporate and established businesses can apply for funding up to R100m.
“The Business-to-Retail product leverages RainFin’s technology to significantly reduce the cost burden associated with traditional loan origination, which in effect enables alternative capital providers and individuals to price loans based on the true economic cost of lending.” – Andrew Whitty, RainFin: Chief Commercial Officer
“Personally we wanted a product that could earn you and I, as individuals, the same types of returns normally only reserved for the big institutions on large debt transactions. The math is simple: individuals give their money to banks as deposits for returns between 7% and 8%; banks lend that money to large corporates at nearly a 50% markup. We want to give individuals the ability to earn the markup themselves by participating directly in these large loans.” – Sean Emery, RainFin: Chief Executive Officer
A business’s community therefore benefits – by being given the opportunity to earn financial returns (fixed interest income and capital growth) that have previously only been accessible to institutional investors and high net worth individuals. Furthermore, in keeping with the principles of the sharing economy, RainFin collaborates with businesses to incorporate other socio-economic benefits to lenders e.g.
- Exclusive access to once-off products e.g. signature ranges or customised products
- Exclusive access to once-off experiences
- Formal recognition for contributing to the business’ growth
- Formal recognition for contributing to socio-economic impact (economic growth, job creation, wealth creation, etc.)
- Employment Opportunities
- Future Investment Opportunities (shareholding)
- Branded Merchandise
Below is an infographic, which explains the product and its benefits in more detail. For further information please contact:
RainFin: Chief Marketing Officer
087 820 5200
About RainFin: RainFin’s technology platform enables private companies to raise debt capital outside the conventional banking system, directly from institutional and retail capital providers. RainFin’s alternative finance solutions succeeds in quickly finding appropriate growth capital that limits ownership dilution.