A peer-to-peer lender created by the owners of a Cornish law firm is looking for high street practices to join what it says is the first legal panel in the fast-growing alternative finance sector.
Folk2Folk was co-founded by two partners at West Country firm Parnalls three years ago to create an alternative to banks for business and property loans. It is now looking for around 100 law firms to join its panel over the next 18 months as it seeks to extend the business to the rest of the country.
Although the company is inviting firms of all sizes to express interest, it is looking in particular for rural high street firms with local knowledge – in contrast to the growing preference of conventional lenders for larger firms.
Jane Dumeresque (pictured, back right), Folk2Folk’s chief executive, told the Gazette: ‘Many firms are losing out on being on legal panels as they are not big enough. But we are looking for quality over quantity.’
Acting for the lender, panel firms will carry out due diligence and provide legal advice in transactions, which is expected to generate business for the firms involved.
According to the directors of the company, the legal panel will be the first set up by a peer-to-peer lender and will be a key factor in the business’s growth strategy.
Dumeresque said: ‘We are born out of lawyers, whereas other P2P lenders are born out of technology or financial services. Not many other lenders have a legal background but we feel very comfortable with lawyers; that is where our founders and roots come from.’
Folk2Folk says it has so far overseen transactions worth more £81m, mainly in farming, renewable energy, housebuilding, and land and property acquisition. The lender is looking to expand into rural areas in particular.
Mark Parnall (pictured back middle), a partner at Parnalls, said: ‘High street [legal] firms are under pressure from every angle at the moment, so keeping them relevant to the community is very important.’