city savings firm to create 80 jobs; Fruitful founder says venture will offer a better deal for savers.
Byline: TONYMCDONOUGH Business Reporter email@example.com tonymc39 @
A NEW internet-based savings and commercial mortgage firm launches in Liverpool this week, aiming to create around 80 jobs in the city over the next year.
Fully regulated by the Financial Conduct Authority, Fruitful has set up home at the waterfront Royal Liver Building and has secured around PS500,000 of start-up capital via crowdfunding and angel investors.
Founder and chief executive, 25-year-old Luke Barnes, claims the venture is the UK's first peer-to-peer (P2P) lender for everyday savers and full-term commercial mortgage borrowers and will offer savers a 6% interest yield.
Mr Barnes, a design engineer who has worked for top companies around the world, said the idea for Fruitful came from his own frustrations at the low interest rates being offered by banks and the complexity and risk inherent in alternative methods of getting higher interest rates.
He told ECHO business: "It became clear that the promoted rate offered was not the rate I was receiving due to the fees. I saw a gap in the market for a much more secure and simpler option for retail savers.
"Fruitful will secure savers' money against mortar and create a more robust system." P2P lending is savers' money being loaned direct to borrowers, with Fruitful concentrating on commercial mortgage borrowers.
"We are going for the broader spectrum of the market," added Mr Barnes.
"Where P2P is usually for people who know their way around financial services, we wanted to bring it to the mass retail market - people who want higher interest rates for their savings."
Fruitful currently employs seven people, but this is expected to grow as the business takes off. In the first 12 months, the firm is looking to attract around 16,000 savers and is aiming to lend PS80m to businesses.
"As we go forward, our savers' rate will always be at least five percentage points above the Bank of England base rate," said Mr Barnes. "We have made it the simplest savings product you will ever come across."
Around PS140,000 of Fruitful's initial funding was raised via crowdfunding platform, Crowdcube.
Since 2011, more than 150 organisations have raised more than PS42m from its community of more than 100,000 investors.
Picture: ANDREW TEEBAY Luke Barnes, from Fruitful, based in the Royal Liver Building | |