Since the launch of the first Peer to Peer and Equity Crowdfunding platforms, alternative finance has not only been providing new options for businesses seeking capital, it has also been redefining the web of relationships that link companies, investors and intermediaries.
In broad terms, the various platforms that have emerged over the past five or so years ago, owe something to the principles of the sharing economy (platforms enabling individuals to monetise hitherto underused assets) and the first wave of rewards crowdfunding pioneered by the likes of IndieGoGo and Kickstarter.
But platforms also bring a new transparency and simplicity to the process of raising or investing cash. From a company point of view, applications can typically be made online and as the process of raising cash kicks in, the business can track progress. Meanwhile, lenders and equity investors are fed with information about deals. All this is very much in keeping with the expectations of a world where information is continuing to evolve.
A Special Niche
In common with other finance platforms, The Route — Finance’s Private Debt Platform is committed to providing an ever improving service – one that is in keeping with its positioning in the Altfi marketplace.
Like all market lending platforms, the Route brings together companies that require debt finance and a community of investors. But the Route — Finance is different in that the core business model of the platform revolves around special situations lending. In broad terms, this means, serving businesses that require capital to address very specific problems or challenges. Often the situations in question fall outside the lending criteria of High Street banks or, indeed, more generalist Peer-to-Peer lenders.
To fulfil that role effectively The Route’s investment community is comprised of High Net Worth individuals and Sophisticated Investors. Just like the ‘retail’ investors who fund businesses through Peer to Peer sites, these are people who are seeking superior returns from high quality lending opportunities. What separates them from the larger marketplace is their understanding of business and their ability to weigh risks and opportunities in ‘special situations.’ What attracts them to The Route is the ability of and experience of an expert team who are skilled in assessing opportunities and carrying out due diligence.
And this is important. For example a prospective borrower might need capital to launch a new product into an untried market. Or a company might need a temporary lifeline after the loss of a key customer. Lending in these scenarios might seem a risky undertaking, but that is only the case if the company in question isn’t viable. The Route team is adept at assessing borrowing applications and carrying out all the necessary due diligence. It’s a bespoke service, rather than something that can be automated. Equally important, the investors that lend via the platform have themselves acquired a wealth of business and finance experience. This allows them to invest confidently based on the recommendations of The Route.
The ability to keep investors informed is a key component of The Route’s success to date. And the platform is constantly evolving to provide investors with an enhanced level of service, which in turn ensures a flow of funds to businesses.
For instance, The Route — Finance’s updated platform ensures that investors can access details of new deals on a 24/7 basis through a newly launched Members portal.
It works like this. Route Investors ‘pre-mandate’ funds to be lent to businesses that have been recommended by the platform. The pre-mandating system ensures that businesses don’t have to pitch for funding that may or may not be available. When The Route recommends a deal, it is in the knowledge Member investors have made a commitment to lend. However, once a recommendation has been made, each investor will sign off on the specific deal.
So it is vital that investors not only know the status of current investments but also that they are aware of deals in the pipeline. To that end, The Route’s portal ensures that investors can see a full range of information on borrower companies – the kind of information that they need to underpin their investment decisions.
The Best of Both Worlds
In other words, what is on offer combines the best of a bespoke financial service offering, under which experts at The Route offer attractive deals to HNW and sophisticated investors, combined with an information platform that provides a high degree of transparency on investments and upcoming deals.
This offers real benefits not just for the investors themselves but also for the borrowing business. The Route’s Private Debt Platform is essentially an enabler of special situations investment. In helping Members of The Route to assess the available deals, the portal fosters active investor involvement and commitment.
Alternative finance operators have continually pushed the envelope in terms of providing superior service on both the supply and demand side. The Route is very much part of that AltFi universe and is equally committed to providing the best possible service.