Months ago I discovered Grid Finance and opened an investor’s account. Here and there I got a notification about new loans, usually in the range of 10 to 20k Euro. So far I haven’t invested, as the company representatives told me, they will not try to expand their p2p lending. I thought it would not make any sense to invest, although I really like the Irish p2p sector, due to my great experiences with Linked Finance and Flender. During the last few weeks I noticed an increased number of new loan notifications, so I thought maybe they changed their mind, but this is not the case. Nevertheless, I asked them some questions and got a nice reply from Andrea Linehan, the groups commercial director.
1) can you tell me when was grid business founded and by whom?
GRID was founded in 2013 by Derek F. Butler who is now GRID Chairman and CEO (https://www.linkedin.com/in/derekfbutler/)
2) how does business and wealth match together in one company?
GRID Business services the small business community in Ireland with funding solutions made up of one or more finance products. The capital for these finance products comes from a broad source of providers including institutional lenders, family offices and GRID Wealth’s retail lenders. GRID Wealth is a dedicated business unit representing and servicing retail lenders for our P2P product.
3) how many loans have you funded so far? How many delayd/defaults?
Default rate is at 0.25%
4) what are your goals for 2018?
We are adding additional finance products and capital providers to the platform so that we can service a wider range of businesses and with larger loan facilities.
5) who can invest with grid?
We work with national and international investors from institutional lenders, family offices, corporates and retail investors.
6) how do you separate from your irish competitors like linked finance/flender and one soon to enter player?
GRID gives Irish businesses access to a number of finance products fulfilled by a broad source of capital providers. While we do provide access to P2P as a finance product, it is only one part of a larger offering. We understand that the one-size-fits-all approach to finance does not work for Irish SMEs and a more bespoke designed solution is required to truly help a business to achieve their growth and expansion goals.
7) are there fees for investors?
Yes, investors pay fees also but each fee structure is different depending on the size of the funds, the product they are financing and the cost of their capital. The fees are deducted from the monthly payments, when received.
8) given my experiences with lending to irish business which are great, can you explain why irish borrowers mostly pay on time. What is the secret behind irish paying morale?
The very low default rate at GRID is due to a number of factors. Firstly, our credit model is exceptionally robust, meaning we only approve applicants that have a proven capacity to comfortably repay their loan. Secondly, despite when a proven capacity to repay has been demonstrated sometimes businesses get into difficulty. Our team work closely with our customers to help them navigate difficult times if they occur and offer advice on how to bring their repayments back up to date. Often times it is simple guidance on cash flow management that can lead to a loan performing again. Our experience is that business owners want to meet their obligations and having a supportive finance partner helps them to do this.
Thank you Andrea for your answers. What a pitty that Grid Finance is not trying to grow their p2p business. I believe there would still be room in Ireland to grow. Maybe they change their mind, if there will be more and more loan requests….