Zencap was a German company, operating a
peer-to-peer lending
Peer-to-peer lending, also abbreviated as P2P lending, is the practice of loan, lending money to individuals or businesses through online services that match lenders with borrowers. Peer-to-peer lending companies often offer their services online ...
platform, which allowed private savers to lend money directly to small and medium-sized businesses in Germany, Spain, and the Netherlands.
Using the
crowdfunding
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and Alternative Finance, alternative finance, to fund projects "withou ...
model, the company based in Berlin, Germany aimed to create a direct link between private lenders and small businesses seeking loans.
As of December 2014, Zencap had facilitated 5 million Euro in loans to small and medium-sized firms.
In October 2015, the company was merged with
Funding Circle
Funding Circle is a commercial lender. Originally it was a peer-to-peer lending marketplace that allowed the public to lend money directly to small and medium-sized businesses. Through this exchange businesses access lower costs of financing tha ...
, being active on UK and US.
Origin
The company, based in
Berlin
Berlin ( ; ) is the Capital of Germany, capital and largest city of Germany, by both area and List of cities in Germany by population, population. With 3.7 million inhabitants, it has the List of cities in the European Union by population withi ...
, was founded in March 2014
by Christian Grobe and Matthias Knecht, with support from
Rocket Internet
Rocket Internet SE is a German Internet company headquartered in Berlin. The company builds startups and owns shareholdings in various models of internet retail businesses. The company model is known as a startup studio or a venture builder.
I ...
.
Lending
The business model resembled the US peer-to-peer lending platform
Lending Club
LendingClub Corporation is an American financial services company headquartered in San Francisco, California. It was the first peer-to-peer lender to register its offerings as Security (finance), securities with the U.S. Securities and Exchange ...
and UK-based company
Funding Circle
Funding Circle is a commercial lender. Originally it was a peer-to-peer lending marketplace that allowed the public to lend money directly to small and medium-sized businesses. Through this exchange businesses access lower costs of financing tha ...
.
Zencap facilitated small business loans from 10,000 to 250,000 euros.
Zencap determined whether the borrower was
creditworthy and assigned a credit grade that determined the payable interest rate and the fees. Zencap itself charged borrowers a 1% to 4.5%
origination fee
An origination fee or establishment fee is a payment charged for establishing a loan account with a bank, broker, or other financial service provider.
While origination fees can be a set amount, a tiered amount, or a percentage. Percentages typic ...
. The loan period ranged between 6 and 60 months while the loan could be repaid without an early repayment fee at any time.
Conditions varied between countries.
''
Der Tagesspiegel
(meaning ''The Daily Mirror'') is a German daily newspaper. It has regional correspondent offices in Washington, D.C., and Potsdam. It is the only major newspaper in the capital to have increased its circulation, now 148,000, since reunificati ...
'' quoted founder Christian Grobe, "We are very strict with the risk assessment."
Once approved, businesses posted their loan request on the Zencap marketplace, where private lenders were able to choose which businesses they wanted to lend money to.
Funding Circle acquisition of Zencap
In October 2015, Zencap was acquired by UK based
Funding Circle
Funding Circle is a commercial lender. Originally it was a peer-to-peer lending marketplace that allowed the public to lend money directly to small and medium-sized businesses. Through this exchange businesses access lower costs of financing tha ...
, another lending platform in Europe.
Zencap was active in Germany, Spain and the Netherlands.
The merge made Funding Circle one of the main peer to business lending leaders in Europe.
See also
*
Debt-to-income ratio
In the consumer mortgage industry, debt-to-income ratio (DTI) is the percentage of a consumer's monthly gross income that goes toward paying debts. (Speaking precisely, DTIs often cover more than just debts; they can include principal, taxes, fees ...
*
Comparison of crowd funding services
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance, to fund projects "without standard financial ...
*
Disintermediation
Disintermediation is the removal of intermediary, intermediaries in economics from a supply chain, or "cutting out the middlemen" in connection with a transaction or a series of transactions. Instead of going through traditional distribution cha ...
References
External links
*
{{Peer-to-peer lending companies
Peer-to-peer lending companies
Financial services companies established in 2014
2014 establishments in Germany