Paper Street is a new and innovative way to fund business

Our platform enables businesses to connect with potential and existing lenders using social media channels. Integrate your Facebook, Twitter and Linkedin accounts into your funding campaign to increase your reach to lenders.

We use Social Networks to help businesses borrow from lenders

We believe that there is a better way for businesses to borrow money, and we had an idea. Why not connect people with companies that need funding by using social networking? The idea is simple. Create your lending community and then issue a loan to your community. Investors lend to businesses they believe in and businesses get an alternative to borrowing from banks.

We create relationships between businesses and investors

Banks are important, but don’t often have close relationships with the companies they fund. They have limited interaction with businesses and rely on complex credit scoring tools to assess risk. We want to enable lenders to develop a long-term relationship with companies they support. Our platform enables lenders to communicate with company directors and other lenders, before and after a loan issue. We encourage businesses to issue financial updates, product launches and expansion plans to members of their community.

Payback investors in cash or products and services

Paper Street provides the perfect platform for companies to issues loans at flexible borrowing terms. Companies can borrow at flexible interest rates and repayment terms without the typical excessive banking covenants. The best part is that loans can be repaid in cash, products, services and even discounts on products and services.

Why not increase customer loyalty by paying back interest in kind? This ensures revenue and creates a marketing buzz.

Please note that lending to small businesses puts your capital at risk.

Our mission is to help great companies get funding from everyday people

We are a funding platform with a difference. We spend our time finding companies requiring growth capital and retail investors that want to support them. We originate, validate and facilitate lending on our platform, hence making it an efficient and safe fundraising process. We are working towards building our member base and will enable loans over the next few months.

We believe that everyday people want to see where their money is being invested, and we are thrilled to support great companies. Building a community of investors is a fantastic way to help businesses grow.

Community ratings combined with our risk rating protects investors

Most peer-to-peer lending sites use either a market model where lenders offer funds at defined interest rates, or a reverse auction where lenders bid on loans with the lowest rates winning. Our platform uses social networking to enable businesses to raise funding at flexible terms, such as fixed interest rates and payment in kind, defined by the borrower and validated by Paper Street.

Businesses can develop a long-term alternative source of funding from a community of retail investors, friends, family and customers. Lenders can receive interest payments in either cash or products and services. Our community-lending model provides borrowing flexibility, while giving people the opportunity to support businesses they know and like.

Please note that lending to small businesses puts your capital at risk.

Community ratings combined with our risk rating protects investors

We believe that current peer-to-peer lending sites do not provide sufficient risk management to protect investors. Our platform uses a combination of Paper Street's proprietary risk rating and a community rating on each loan issue. We encourage community members to rate loans and contribute to discussions on our platform, so that lenders have a holistic view of the borrower. We note that our risk assessment is a recommendation as all lending has an element of risk. Click here, for a full explanation of Financial Risk.

We enable investor due diligence through direct contact with company management

All loan issues on our platform have question and answering functionality so that potential investors can ask questions directly to company management. Community members can post questions to management and also discuss the company with other investors.

Members can link their social media accounts and provide work experience to build credibility as investors and commentors of loan issues as part of our functionality. Invite employees and company management on the platform to support and communicate with investors

Post investment monitoring and investor updates

Update We believe that businesses can create a relationship with investors. Paper Street is the only platform that enables companies to update investors and supporters on the use of borrowed money. We encourage businesses to post financial updates and communicate with lenders. Borrowers reduce risk ratings rates for future borrowing and lender's gain more confidence in lending.

STEP 1

Create a lender profile if you are a retail investor, customer or company representative. You can also link your Linkedin and Facebook profiles with your account to login easily and safely. We are currently increasing functionality and members will soon be able to add work experience from their Linkedin profiles.

Create a company profile to develop and manage your investment community. Invite customers, company management and even previous investors to become members.

STEP 2

When you become a member you can browse and discover companies that require funding and other members that want to invest. You will also be able to browse and discover investment opportunities when companies are issuing loans or bonds. When you find a company that you want to connect with press the follow button and become a part of a company’s investment community. You can contact other members and companies to discuss investments and comment on blog posts. Companies can engage and get feedback from the people that matter most.

STEP 3

We are currently working on issuing loans on the platform. Investors will be able to buy either a loan part of a bond through our customer payment gateway.

Paper Street adheres with UK anti-money laundering rules and validates all investors before any investments are purchased as part of the payment process.

STEP 4

At Paper Street companies have the flexibility to structure loans and bonds to fit their needs. Each company pitches to the Paper Street community via a microsite explaining why they need the growth capital and explains the structure of the loan including frequency and type of interest payment, length of loan and when the principal will be paid. We validate and assign a risk rating to the loan or bond to ensure that investors and borrowers are protected.

Most companies will pay interest in cash, but some may choose to reward investors with payment in kind. That is, companies may pay interest payments on a loan in products, services or vouchers. This is good for both parties as payment in kind is cheaper for the borrower, and yields a high interest payment for the investor.

Please note that lending to small businesses puts your capital at risk.

STEP 5

Follow your companies during the course of the loan and receive financial updates, product launches and general news from the business. We believe that investors and companies benefit from developing a long-term relationship. Investors get to see how their money is being used to expand the business and companies engender loyalty and get feedback from customers and investors.

We are a team of highly experienced professionals in finance, risk, due diligence, and technology development. Our team is growing everyday and we are focused on our growth while ensuring that both company and investor risk is managed effectively.

Nyron Gopeesingh

Co-founder

Nyron leads the team strategy, business development and marketing, and loves nothing more than to have a conversation with anyone about Paper Street. He has spent five years at PwC, where he worked in Mergers and Acquisitions across industries including retail, consumer goods, industrial and chemical manufacturing. He holds a bachelor’s degree in Aerospace Engineering from Florida Institute of Technology and an MBA from Manchester Business School.

Sumit Agarwal

Co-founder

Sumit is our tech guru and is in charge of development and deployment of our community platform. He holds both a Bachelor's and Masters' degree in Computer Science from University of Manchester, where he specialised in databases and transaction processing. He has over eight years of experience in the financial brokerage services sector, in which he has worked in development, support, data security, and compliance for a large software house. Sumit will oversee the administration of Paper Street's technology, data and information services.

Simon Down

Special Adviser

Simon is a Senior Investment Manager at a major Japanese Fund Management House based in London. He has been an investment manager for over 17 years, and has full discretionary management of a variety of investment funds encompassing emerging and developed markets and ranging from single currency money market to global bond / global emerging markets. Simon has strong relationships with a number of the major supranational issuers and has played a key role in launching a number of products as well as specialising in the Green bond market. His funds have received numerous awards including the Morningstar Fund of the Year award 2007 and ESG Most Innovative Development in ESG 2010.

Simon is a CFA (Chartered Financial Analyst), and has an Economics graduate degree from Exeter University.

Our risk ratings help lenders make informed investment decisions

We rate every loan issue on our platfrom using an easily understandable risk rating from A to E (A being lowest risk and E being highest risk). Our rating provides a recommendation to investors of the potential investment risk of lending to a company.

We originate, validate and facilitate loan issues on our platform to ensure that only companies with a strong operational performance track record, profitable business model and potential for future growth can list loans. We specifically look at whether a company has the capacity to repay your investment using both qualitative and quantitative metrics.

We also use external credit agencies and databases such as Experian and Due Dil to supplement our risk assessment. As part of our risk assessment we credit check borrowers to understand the historical and future credit worthiness of companies on our platfrom, and our investor approval process uses identity and bank account verification to validate all investors on our platform.

Please note that lending to small businesses puts your capital at risk.

Our detailed risk assessment protects investors

Step 1 - Submit your proposal

Create a loan application on our platform and submit your proposal to our underwriting team.

Step 2 - Company Validation

We assess company financials (two years), historical track record and management profiles.

Step 3 - External Checking

We will use external agencies like Experian, Companies House, Duedil and other related sources.

Step 4 - Paper Street Rating Model

Assessment covering but not including industry outlook, Company market position, Management profiling, Debt coverage, Profit and Loss analysis, Balance Sheet analysis.

Step 5 - Company Validation

Acceptance or Rejection of loan application

We reserve the right to reject a loan application at any step of our assessment process.

A community rating supplements our recommended ratings

We believe in the power of the crowd. Paper Street community members can rate loans to help investors feedback to companies. Members can rate each loan from one star to five stars (five being excellent and one being poor). An average rating between one to five stars is calculated based on each member's vote.

Our community members range from everyday people to investment professionals and company management. Feedback from community members are highly valuable and may contribute to interest rate changes, pitch feedback and company performance discussions.

We want you to be involved in the investment process

We believe that investment decisions should not be taken in isolation. Paper Street's functionality encourages dialogue with your Paper Street community members and with the company seeking funding.

Discussions can range from most recent company performance to new product launches to the investment itself. We hope that investing on our platform will be engaging and fun for you.

All investments have risk

We need you to recognise that there are risks in lending to any company. The main risk for you is the company defaulting on the loan and not returning your investment. Whilst we make every effort to disclose the relevant company background and information, situations can change and companies can default.

Investing on Paper Street gives you the advantage of evaluating a company on its own merit, while engaging with the wider community as part of your decision making process. You ultimately get the chance to see your investment yields an appropriate return.

General Questions

Peer to peer (P2P) lending is the practice of individuals lending money to unrelated individuals and companies, or “peers". P2P lending (commonly known as a form of crowdfunding) provides an alternative lending channel to traditional financial intermediaries such as banks. Lending takes place online on ‘peer to peer’ lending websites where people can lend directly to other people or businesses. Businesses are increasingly looking to P2P lending platforms as an alternative source of finance. Learn more.
Lending money on P2P lending platforms usually takes one of two forms, lending to individuals or lending to businesses. The risk profile of each is very different. In the case of lending to businesses, the type of companies determines the level of risk, and in general their credit risk profile. The main risk is that businesses either don’t repay on time, or worse still default on their outstanding debts. The eligibility criteria that P2P platforms have in place are likely to have an important effect on the ultimate repayment prospects of the business. We at Paper Street are very selective about which businesses are allowed to raise money on the platform, and have a detailed due diligence process, which is designed to mitigate business default risk. We have a proprietary credit risk rating process whereby each company, that lists a loan request on our platform, is rated from a scale of A to E (A being the highest credit rating). The risk rating will also determine the interest rate the borrower is willing to pay to its investors. Loans will either be unsecured or secured (have a security arrangement in place, by way of a standard debenture and/or personal guarantee from senior management of the business).

Please note that lending to small businesses puts your capital at risk.

From April 1st 2014, the Financial Conduct Authority (FCA) will take over regulation of peer to peer lending from the Office of Fair Trading (OFT) in the UK. The FCA has also released its guidance for the P2P lending industry. To learn more about these guidelines click here.
Paper Street is authorised by the FCA to conduct peer-to-peer lending services. Paper Street Funding Ltd. has interim Permission from the FCA with effect from April 1st, 2014; we also hold a consumer credit license (660212) from the Office of Fair Trading.
P2P lending provides a favourable return on investment to lenders, as there is no intermediary between borrowers and lenders. Funds are lent directly to businesses, and lenders receive returns minus our transactional fees. The percentage of return will be based on a number of factors, chief of which will be the underlying credit risk rating of the business. Returns on Paper Street vary and depends primarily on the credit risk rating of each business. Higher rated businesses (A being the highest) usually provide lower returns, while lower rated businesses, usually provide higher returns. We suggest diversifying your risk and return across credit rating bands (A to E) to ensure that you manage your risk appropriately. Our typical returns are below:

A - 3-5%
B - 5-7%
C - 8-10%
D - 11 - 14%
E - 15 - 25%

We review our lending rates every month to ensure that lending rates are competitive with banks and other lending platforms. Lending rates are gross returns and do not include our 1% maintenance fee. Please note that lending to small businesses puts your capital at risk.
We charge borrowers a percentage of the loan depending on the amount borrowed. This fee is deducted from the money raised at the end of the auction process and there are no upfront fees.

• 2% on loans of length 6 to 12 months
• 3% on loans of length 24 to 36 months
• 4% on loans of length more than 36 months

A loan maintenance fee of 1% per annum on interest earned will be applied to each loan repayment. This means that the interest earned on a loan will be net of our maintenance fee. Each lender will see this on their lender’s account page.
Our risk ratings descriptions are explained below:

A - Highest rating assigned by Paper Street. The borrower’s capacity to meet its financial commitments is very strong, as evidenced by higher than average DSCR, low leverage, positive cash flow position, and positive historical operating and financial performance and track record.
B - Second highest rating. The borrower’s capacity to meet its financial commitments is strong. This rating is derived through an average level of DSCR, low leverage, positive cash flow position and positive historical operating and financial performance and track record.
C - The borrower is somewhat more susceptible to effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the company’s capacity to meet its financial obligations is still strong.
D - The rating reflects an adequate level of protection. However, adverse economic conditions, or changing circumstances are more likely to lead to a weakened capacity of the borrower to meet its financial commitment to the loan.
E - The rating reflects significant speculative characteristics. While such borrowers will likely have some quality and protective characteristics, these may be outweighed by large uncertainties with regards to the future financial and operating performance of the borrower.
A loan maintenance fee of 1% per annum on interest earned will be applied to each loan repayment. This means that the interest earned on a loan will be net of our maintenance fee. Each lender will see this on their lender’s account page.

Lenders

Anyone can lend provided you are a UK resident. Lenders can sign up to Paper Street and create a profile on the ‘create a profile’ page. When purchasing a loan you will be automatically directed to an Anti-money laundering (AML) check for identity verification. We are mandated by law to conduct identity checks as part of UK anti-money laundering rules. See FCA regulation for more details.
Signing up is quick and easy. You can sign up to the platform with email, Facebook, LinkedIn or Twitter accounts. We will send you a confirmation email once you have been registered so that you can confirm your email address. There is no charge for creating a profile and you can follow and engage with businesses on the platform without lending.
Loans are comprised of many ‘loan parts’ so that lenders can purchase small parts across many loans. As a lender you will be able to purchase a loan part during an auction period (typically 30 days) by the business. Simply press the purchase button in the loan site where you will be guided through transferring money to a Paper Street account in the amount being purchased. Lenders are required to quote the reference number given for the transaction to ensure that we can reconcile your money with your account.
In the event that you forget to include the reference number whilst making the bank transfer, we will attempt to contact you via email or phone to confirm the details of your payment. When monies have not been transferred from a bank account with the same name as the registered member we will have no way of tracing the money back to you, as neither the reference number would have been included, nor would the registered member have made the payment. We will, in such a case, hold the monies in our suspense account for a period of time, and wait for the lender/member to contact us to confirm the payment details, failing which we will request our bank to reverse the transaction and remit the monies back to your account.
The minimum amount that you can lend is £100.
Interest rates for businesses raising a loan request are usually based on the credit risk profile, which is calculated using our proprietary risk rating model. Interest rates are also determined in conjunction with the current lending rates that the particular business currently borrows from banks.
We do not have sufficient volume on the platform to ensure that an auction process for interest rates is efficient for the borrower. We plan to provide this facility in the future.
This can vary, but borrowers will usually be asked to make quarterly payments from the time of loan completion.
We will credit interest payments to your Paper Street account. You can withdraw credited money from your account at any time by request. We will transfer money to your bank account using the details you have supplied and verified.
A loan must be fully funded to complete. However, we can consider a loan closed as long as it is funded 75% of the original loan amount, subject to the Borrower being willing to accept a partially funded loan.
A loan must be fully funded to complete. However, we can consider a loan closed as long as it is funded 75% of the original loan amount, subject to the Borrower being willing to accept a partially funded loan.
Borrowers may choose payment in kind to payback interest, that is, borrowers have the flexibility to payback interest to lenders in products, services, vouchers and discounts. Capital is paid off at the end of the loan. The retail value of the product or service used in payment in kind is equivalent to the calculated interest on the loan. We work with borrowers to calculate a retail value equivalent to the interest payments. For example on a loan of £1000 a café can payback interest with a free coffee (worth £2) once a week for a year. This is equivalent to £104 or 10.4% per annum. Paying back interest in this way is cheaper for the business, ensures revenue and fosters customer loyalty. Although we facilitate payment in kind in our loan agreements, we are not responsible for enforcing the payment by the borrower to the lender. The borrower is solely responsible for ensuring that payment in kind arrangements with lenders are fulfilled.
We are the only P2P lending platform to offer a full set of legal documents to lenders for every loan. The documents have undergone a rigorous legal appraisal process to ensure that both lenders and borrowers have a clear and transparent legal documentation trail, and are adequately protected. Our legal partner, a top 20-law firm, has worked with us to create our legal documentation. The legal documents are automatically generated when the borrower accepts the terms of the loan. They will appear on your my account page as PDF documents.
Depending on the size and risk profile of the loan, we may ensure that the borrower provides a security arrangement for the benefit of the lender. This will be in the form of a personal guarantee, a debenture on the assets of the company or both. A security arrangement ensures that if the Borrower defaults on its obligations under the loan contract either the directors of the business can be held liable for the loan (in the case of a personal guarantee) or some or all of the assets of the borrower can be sold in order to repay the loan (in the case of a debenture arrangement). Our subsidiary Paper Street Recoveries Ltd. will manage the claims process in conjunction with a third party collection agency (as appropriately required).
P2P lending is not covered under the financial services compensation scheme (FSCS) and Paper Street does not offer compensation for loan defaults. We will, however, enforce security arrangements when there are defaults. We will fulfil our administration role by chasing collection of payments loans from borrowers using Paper Street Recoveries Ltd.
We charge 1% on all loans on the platform. That is we charge lenders 1% of interest earned during the course of the loan. This will be deducted from payments from borrowers before money is transferred to lenders.
We encourage all businesses to provide updates to lenders to engender goodwill and provide assurance but this is not mandatory. Businesses are also encouraged to communicate good news with lenders such as product releases, profit updates, new customers etc. We will ultimately communicate with borrowers when there are late payments to provide updates to lenders.
Some businesses will inevitably experience financial trouble. At Paper Street, we encourage borrowers to appropriately engage with us and their lenders through the platform. In the event that the borrower is in significant and material financial difficulty, we will work with the borrower to pursue various recovery options, including making a claim under any security arrangements as a last resort.
We will help recover the money using a third party payment collection agency using our subsidiary Paper Street Recoveries Limited.
We will help recover the money using a third party payment collection agency using our subsidiary Paper Street Recoveries Limited.
We will credit your Paper Street account with the full loan amount (i.e. the capital and interest payments made to date). The full loan amount will also include interest owed to Lenders in the month of early repayment. Lenders will be able to withdraw their money or use it for another loan on the platform.
You will be able to sell your loans or transfer you loan for the nominal amount paid to other lenders on our loan marketplace, however this is still under construction and we will let you know when you will be able to post your loan parts.
When businesses pay interest on their loans, interest payments will accumulate in your Paper Street account until the loan is paid off. To withdraw funds from your account contact us and we will transfer your money into your bank account. We are working towards automating this process and we will inform lenders when automation has been completed.
Our community forum allows anyone to post comments and replies with businesses and lenders. As a social network we want to foster a community of borrowers and lenders. We will moderate this community to ensure that members adhere to our terms and conditions. Businesses will be able to message their followers directly but will not be able to directly message any other lenders on the platform unless these lenders become followers. Lenders will also be able to message followers (both borrowers and lenders). Businesses gain the ability to Each loan will also have a Q&A section or forum to enable lenders to interact with businesses. Lenders can pose questions to diligence loans and businesses can answer questions on the loan or business activities.

Borrowers

Simply go to ‘Request a loan’ on the banner and apply to us for a loan. We will contact you to discuss the required documents to post the loan on our platform. You will have to join the platform and create a business profile before the loan is posted.
Paper Street is a debt-funding platform and only lending is allowed on the platform, we are not an equity crowdfunding platform. We provide lending for growth funding.
The length of funding will depend on several factors including the underlying credit risk rating of the business, and the interest rate on the loan. In practice, this will likely fall in the range of 1 to 3 years.
Each loan will have an interest rate set by us using our proprietary risk-rating model. We believe this is essential in ensuring that risk is priced appropriately. Although we will work with the borrowers to determine the appropriate interest rate, below is an indicative guide on what lenders might typically expect to get A – 3% B – 5% C – 8% D – 11% E – 15% We will review these ratings monthly as lending rates change.
Our risk-rating model uses a combination of quantitative (e.g.; financial performance) and qualitative (e.g.; business model) variables to determine the risk rating of each loan. We focus on cash flows, as our primary concern is the business’ ability to repay its loan. We also use Equifax and other external agencies to verify credit worthiness of a loan. See the Financial Risk section for more information.
Yes. We are committed to creating the most tailored Peer-to-Peer lending platform for businesses and as such we offer ‘Payment in kind.’
We will first work with you to define your loan’s risk rating and appropriate interest rate. Businesses can then offer interest payback in the form of products and services equivalent to the interest. Capital will be paid at the end of the loan. While we offer the ability to payback your lenders in this way, we cannot facilitate the payment of ‘payment in kind’ through the platform. We will however, maintain contact with borrowers to monitor whether payments are on time. Late payments will be treated in the same manner as late cash payments.
We charge businesses a completion fee taken from the full amount raised and a loan maintenance fee of 1% per annum. See our full schedule in General Questions.
We will review your financial statements for the last three years, interview your management and review your external credit ratings. When we have received all of your required information, an answer will take 1-2 days.
Yes. We aim to create a consistent alternative funding source to businesses seeking to grow.

My Account and Details

Click on the forgot my password link on the sign in page and we will send you password-reset instructions.
We use a PIN code as another layer of security. Sometimes passwords are not enough and we consider our members security to be of utmost importance. You will not be able to purchase or view your my account page without this code.
You can’t view your pin on your My Account page, but if you forget your pin you can edit or change your pin on this page. Contact us if you have further difficulty retrieving or changing your PIN.
Your profile is only visible to registered users on the platform. You can choose to use a username instead of your full name when communicating with other members of the platform. Due to legal reasons your real name will be on all loan agreements between businesses and lenders, but these are private documents between the lender and the borrower and will not be shared with other lenders. None of your investments will be visible to other lenders.

Contact Paper Street

Please enter details of your request below or email us at contactus@thepaperstreet.com