By Andrew James
Interestingly, if you Google News “Folk to Folk Cornwall” today, the top listed items are on the “fish out of water comedy” – Fisherman’s Friends – I think because of the reference to “folk music” in the film reviews.
One of these reviews has a line from the film which describes “traditional folk music as the rock and roll of 1752” – which in some ways is a nice lead into a piece on Folk2Folk; as there is something very traditional about the business model of Folk2Folk. The “about us/ our purpose” section of their website has two bullet points that encapsulate the following::
- FOLK2FOLK is a business built on the value of “fair exchange”. We are transparent about our charging, and the interest rate the Borrower pays goes direct to the Lender
- FOLK2FOLK uses technology to enhance human relationships and bring them together. We remain one of the only companies of our kind to maintain and favour the existence of a local branch network. We therefore describe FOLK2FOLK not as a B2B or B2C business, but as H2H (Human2Human).
I was sure we have blogged on Folk2Folk previously, but a search on website could not locate a post – so I assume it was some time ago. So, time for a recap before looking at the relaunch. My focus will from the business (the borrower’s) perspective. There is of course another side – the Lender – this and a lot more is covered on the Folk2Folk website.
The recap – from the business perspective
Folk2Folk facilitate business loans. The loans themselves are made by individuals. As one news piece described, “Folk2Folk is an online platform that is akin to a matchmaking service where local investors at paired with local businesses in need of finance”
To be eligible for a business loan through Folk2Folk:
- You must own land or property, other than your home, against which to secure the business loan
- You’re looking to borrow £50,000 or more
- You’re based in the UK (excluding the Isle of Man and the Channel Isles)
- You’re over 18
- You pass Folk2Folk credit and other checks
The loans are available to businesses operating across a range of sectors and the monies can be used for a variety of business purposes. The term of the business loans is from six months to five years and they are interest only.
Since platform launch in 2013, Folk2Folk has financed over £275 million in SME loans.
There has recently been a fair amount of press coverage on the Folk2Folk relaunch. The key strands of this, again from the business perspective, appear to be:
- Reduction in starting rate for loans to 0.38% per month equivalent to 4.5% per annum
- Relaxation of basis for maximum Loan to Value to 60% of market value (I understand that LTV used to be based on closed value of the property)
I understand from a meeting one of my colleagues had with a contact at Folk2Folk, they have also formalised the offering in connection with property development finance.
More detail is on the website and in the Borrower Guide. The Business Guide and the website outlines the different product offerings across categories being: Leisure and Tourism; Hospitality; Farming and Agriculture; Property and SMEs. These categories are familiar to us and I suspect we will continue to think of Folk2Folk as a solution to our client’s funding requirements (as applicable).
Finance in Cornwall 2019
Folk2Folk will be presenting at Finance in Cornwall 2019 – for more details of the event and to book a place please click here.
In the interim, please contact me or your usual PKF Francis Clark contact to discuss a debt raise that you feel may be suited to Folk2Folk.