Rodney James


The practise of loaning money to unrelated individuals without the means of a financial institution, via an online platform (P2PL) has taken a foothold in the UK, fuelled mostly by low interest rates alongside the banks playing hardball. In 2012 Nick Harding, Founder and Chief Executive Officer of Lending Works launched his company with a view to disrupting the industry.

“We have a huge opportunity in a space that is close to my heart, we are allowing our customers to get a better return on their savings and our burrowers to get a lower rate on their loan.”

Eight years within the financial services industry has allowed Nick to gain invaluable experience. “My previous roles were at an investment company and prior to that I was working for RBS. Whilst there was some excitement and enjoyment in building a company, there was no sense of moral reward. Working for RBS was a period of my life where I was learning a lot, I wanted to gain experience whilst working at a big corporate. You very much feel that you are a small part of a big engine and that doesn’t give the same sense of achievement that you have from building a company from scratch.”

Writing £5 million in loans within the first twelve months of business would be viewed as a lofty achievement by most companies but these numbers do not reflect the company’s vigour for growth. “We are incredibly competitive and ambitious people so whatever the company did in terms of growth we would want it to be higher. Our aim is to create a financial services brand that provides fair and honest services to its customers. We are not talking about having 100 employees, we are talking about having thousands of employees and serving millions of customers.” On reflection Nick tells me that he would have taken their current position within the market if previously asked the same question. “Our customers are feeding back to us that they really love using the service. That’s the most important thing, if you have got thousands of happy customers it makes you proud of your achievements.”

Nick Harding - Lending Works

Nick Harding – Lending Works

P2PL lending has been met with scepticism from certain quarters, the underlying issue being that depositors do not qualify for protection from the Financial Services Compensation Scheme. The UK government announced in 2014 that the industry was to be regulated by the Financial Conduct Authority so the responsibility of safeguarding depositor’s capital lies with the intermediary. P2PL platforms provide safeguards and provision funds, Nick expands on this idea whilst illustrating Lending Works competitive advantage.

“We were looking at where we would enter the marketplace and what consumers wanted. After lots of research we decided that there’s a great deal of consumers out there who are looking for a safe form of P2PL. We think that’s further emphasised by the government in allowing ISA’s to be lent through P2PL and also there are big shifts going on within the pension world.” Along with low interest rates the P2PL industry is growing fast.

“With that point of safety in mind we thought how do we become the safest P2PL? Maybe, unlike some P2PL we are happy to partner with large organisations, insurance companies and other entities in order to provide a better service for our customers. Our point of view is that if you can use an insurance company in order to take on some of that risk on behalf of your lenders, then you are providing your lenders with a better service. Our unique product the Shield involves a reserve fund but on top of this we also have the insurance policies, which are with major multinational insurance companies who are established and going to be around for the long term.” By design the Shield will protect lenders in the event of a downturn. “An unusual situation such as we had in 2008, inevitably will happen again in the next ten or twenty years. It means our lenders are still protected in those times as well.”

Successful branding is key when striving for that competitive edge and also vying for customer loyalty. Advertising budgets can be very costly with lukewarm returns so how does an online platform market its products and services? Nick recognises the value in alliances and partnerships.

“An efficient way to building the size and scope of the company, in order to have the resource to build that brand is by partnering with people. They could be media companies, car dealerships, anywhere people are spending or saving money. Also targeting large groups of people, clubs and unions and many other groups out there where we think our services can help. We perceive partnerships to be the next frontier in terms of marketing.”

The way we loan money is set to change for the foreseeable future, with an ageing population the need for longterm financial security has become a pressing issue. Nick and his team have made an impression with a relatively short period which will contribute to changing the way we view personal finance.


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