Growth Street tops £500m of small business loans

The small business peer-to-peer lender plans to attract more institutional investors this year.

Growth Street said it has originated more than £500m of loans since the business lending platform was launched five years ago, as it plans to boost its institutional funding.

The peer-to-peer lender added it had hired Aman Mehra from UK rival MarketInvoice as head of corporate development earlier this week “to lead its efforts to attract institutional investors”. Mehra was responsible for investor strategy at MarketInvoice.

The firm currently has around 2,500 investors, who are a mixture of business and individual backers.

The London-based fintech’s flagship product is GrowthLine, which works much like an overdraft, with small businesses given a limit, they can draw down on and make repayments as often as they like, within agreed limits.

Funding rounds

Growth Street was founded by chief executive Greg Carter (pictured) and serial investor Thomas Hoegh in 2014.

Carter said: “We have some ambitious goals for 2019 and beyond as we look to support more growing businesses while also developing our investor propositions.”

The fintech has raised £17.5m of cash in two rounds of funding this year led by existing investor Merian Chrysalis Investment Company, a Guernsey-based investment company traded in London. The second tranche, worth £10m, was completed last month.

In May, the business also launched a one-year fixed term Innovative Finance ISA, offering a 5.8 per cent annual rate of return.

Peer-to-peer lenders moved into small business lending following the financial crisis in 2008, as banks cut back on loans to smaller firms, fearing defaults.  

Most of these platforms are loss-making, but attract investors who believe they will eventually emulate the success of Big Tech giants such as Facebook and Google.