The Vision
Borrowing should get cheaper when people choose to help.
Traditional lending treats borrowing as a transaction between you and an institution.
Crowdfunding made financial support more human, but usually asks people to give their money away permanently.
Lendfolk is designed for the space between the two.
There should be more than two choices
Today, helping someone financially usually means picking one of two things.
Give them money
You help immediately, but the money is gone.
Leave them to borrow conventionally
They repay the money, but potentially at a much higher cost.
Lendfolk adds the options in between. Towards the same funding goal, one supporter might:
- donate £20
- lend £100 interest-free
- lend £250 at a reduced return
- lend at the standard available return
All of those contribute to the same total. None of them is the right answer.
Help should reduce the cost of borrowing.
If someone’s friends, family or wider community are willing to help on better terms than a conventional lender, the borrower should benefit from that.
- Donations
- reduce the amount that needs to be repaid.
- Interest-free lending
- reduces the cost of the repayable amount.
- Lower-return lending
- reduces the borrower’s effective interest rate.
- Standard-return lending
- allows people to support the borrower while still receiving a return.
Maya needs £2,000
Four people help, in four different ways, over 24 months.
- £250 donated
- Never repaid
- £600 lent interest-free
- Repaid in full, no cost
- £400 lent at 3.0%
- Below the standard return
- £750 lent at 6.5%
- The standard return
Donations reduce the amount Maya needs to repay. Lower-return lending reduces the cost of what remains. Of the £2,000 raised, only £1,750 has to be paid back at all.
Maximum approved APR
8.9%
£90.96 a month, the figure Maya was assessed on
Estimated community-backed cost
5.9%
£77.34 a month, about £326.93 less over the term
Demonstration figures, calculated from this example rather than quoted. Real campaigns depend on who supports them and how.
Plan for the maximum. Benefit from the community.
Community support should make an affordable loan cheaper. It should not make an unaffordable loan possible.
Maximum APR
8.9%
Advertised up front, and the ceiling on what borrowing can cost.
Affordability assessment
Based on 8.9%
Assessed on the full amount at the full rate, with no help assumed.
Community support
May reduce the cost
Upside after approval, never a condition of it.
What we are designing for
“This ended up cheaper than I planned for.”
What we are designing against
“I need people to waive interest or I can’t afford this.”
Support without judgement.
Supporters make their financial choice privately. We don’t want generosity to become a public competition, and every way of supporting someone is valid.
A campaign page shows
Alex supported with £50.
A name, if they gave one, and an amount. That is the whole of it.
It never shows
- whether Alex donated
- whether Alex lent interest-free
- whether Alex chose a lower return
- whether Alex took the standard return
A campaign can still publish its totals, because a total cannot be unpicked into the choices behind it:
- £300
- donated
- £450
- lent interest-free
- £750
- lent with a return
You may be able to lend more than you can afford to give.
Someone might want to help a friend with £100 but not be able to afford to permanently give away £100.
If they can expect that money back over time, helping becomes possible in situations where donating would not be.
“I can’t afford to give you £200, but I can lend you £200.”
A different kind of marketplace
Lendfolk should not feel like
- a trading platform
- a payday lender
- a speculative investment product
- a popularity contest
It should feel like people helping people under clear, structured terms.
Supporters make their own financial choice. Borrowers know their maximum cost before accepting anything. The platform handles the structure around that relationship, and stays out of the way of it.
The platform should benefit when the system works, not when someone struggles.
We’re exploring a model where Lendfolk earns enough to operate sustainably without taking an unnecessary cut from people raising money.
Nothing here is fixed yet. The commercial model will change as we learn what actually works, but the shape we are aiming for is this:
- No fee to browse.
- No fee to create a funding page.
- Payment processing costs shown openly, not buried.
- Optional contributions from supporters who want to help run Lendfolk.
- Lending costs included in the advertised borrowing terms, not added afterwards.
Lendfolk is a commercial product concept, not a charity, and it has no nonprofit status.
Lendfolk is not designed to
- make unaffordable borrowing possible
- hide the true cost of a loan
- pressure people into waiving interest
- publicly judge how someone chose to help
- encourage speculative lending behaviour
- replace proper affordability and credit assessments
A more flexible way to help each other.
Give it. Lend it. Or somewhere in between.
The idea behind Lendfolk is simple: when people are willing to help, that support should translate into better financial outcomes for the person who needs it.