Community company aims to reduce cost of borrowing.
Set to go live on the 11th of April, the new Street UK online lending platform will enter the market with a fair alternative to high cost online lenders. The lending platform designed by the not for profit organisation will offer personal loans between £100 and £500 over up to six months, with instant decision on applications.
Street UK is as a Community Interest Company and a subsidiary of Street UK Foundation which is a registered charity (Charity Registration No. 1081902) and operates on a not-for-profit basis. Interest received from loans is used to cover costs and not to provide dividends for shareholders.
Street UK has track record of offering low cost loans to people who wouldn’t have access to credit otherwise. “We are bringing our 16 years of ethical low cost high street loans experience to the online market”, says Martin Hockly, CEO of Street UK. “Our goal is to demonstrate that it is possible to provide access to credit online without having to charge the maximum rate allowed by the FCA (the Cap) and achieve a scale capable of disrupting the market and creating real price competition.”
To date Street UK has approved over 32,000 loans advancing more than £15.3 million, saving each customer on average £551 on a equivalent loan from a doorstep lender, a total saving of over £11.3 million, which is effectively put back into the local economy.
Via the online lending platform, a customer taking a £300 loan to repay over three months will be paying a total of £359.47 with Street UK, as opposed to £454.24 with a competitor, more than halving the cost of credit. The APR is fixed at 201%, more than 1000% lower than that of other online loan providers.
Street UK has worked alongside London based charity St Martin’s Affordable Finance Development Limited to develop the new service, it is also being backed by three social investment funds: Barrow Cadbury Trust, Esmee Fairbairn Foundation and Big Issue Invest.
According to Rev. Philip Krinks, Chairman of St. Martin’s and a former Partner at Boston Consulting Group, “Street UK is a proven provider of ethical financial products, this new on-line service will enable many more people to access responsible loans, priced fairly and combined with education about borrowing, and access to advice for those who need it. The launch of this service marks a new era in the availability of ethical, responsible loans in the UK: it is social enterprise at its innovative best.”
To help customers make an informed decision when taking a loan and avoid debt problems, clear facts and advice are available throughout the application process and on the website. Street UK’s platform will also direct customers to personalised advice and support resources in case the application is not approved.
