Why Funding Matters—and Why It’s Hard
UK startups face a jungle of funding options. You might have heard of Funding Circle. It’s a big name in peer-to-peer lending. But is it your best bet? Or does it miss some tax breaks that equity schemes offer?
Let’s dive in.
What Is Peer-to-Peer Lending?
Also known as crowdlending startup finance, peer-to-peer (P2P) lending connects businesses directly with individual or institutional lenders.
- No high-street bank needed.
- Loans from £10,000 to millions.
- Interest rates can be competitive.
Funding Circle popularised this. You apply online. Get a decision fast. But remember:
- It’s debt. You repay monthly.
- No equity involved.
- Limited tax incentives for lenders.
A classic crowdlending startup might borrow £50k to cover materials. Easy. Quick. But no SEIS/EIS perks.
SEIS and EIS: The Tax Incentive Champions
The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are government-backed. They reward equity investors, not lenders.
Key perks under SEIS:
– 50% income tax relief on investments up to £100k.
– Capital gains exemption.
– Loss relief if a startup fails.
Under EIS (investments up to £1m or £2m for knowledge-intensive firms):
– 30% income tax relief.
– CGT deferral.
– Loss relief.
Investors love these schemes. It’s like a safety net. But P2P lenders don’t qualify—they don’t take shares.
Why “Borrowing” Misses Out
A crowdlending startup offers a loan structure. Tax breaks? None. For investors, it’s purely interest income—taxed at your marginal rate. Ouch.
Equity investors? They share risk. And reap the tax rewards. That’s big.
The Drawbacks of Traditional Crowdlending
A crowdlending startup route might feel tempting:
- Quick cash.
- Predictable payments.
- No dilution of ownership.
Yet:
- Rigid repayments can choke cash flow.
- No tax perks for backers.
- Interest burden on founders.
In our book, it’s a short-term patch, not a growth engine.
Equity Crowdfunding: A Middle Path?
Platforms like Seedrs and Crowdcube let you raise equity. You tap into SEIS/EIS. But…
- They charge fees (often 5–7% of funds raised).
- They vet you—but not always deeply.
- Some investors ghost you post-fundraise.
You get tax perks. But you lose a slice of your early funding to commissions.
Enter Oriel IPO: Commission-Free, Curated, Tax-Focused
Imagine an investment marketplace designed specifically for SEIS/EIS deals. No commissions on funds. Just a clear subscription model. That’s Oriel IPO.
Why it stands out:
- Commission-free: You keep more of what you raise.
- Vetted opportunities: Curated to meet SEIS/EIS rules.
- Educational resources: Webinars, guides, deep-dives.
- Transparent process: No hidden costs, no surprises.
Maggie’s AutoBlog, Oriel IPO’s AI-powered content tool, even helps you craft investor-facing blog posts. SEO-optimised, geo-targeted. Handy for startups wanting to boost visibility and engagement without hiring a full-time marketing team.
Comparing Crowdlending Startup vs Oriel IPO Marketplace
| Feature | Crowdlending Startup | Oriel IPO (SEIS/EIS Equity) |
|---|---|---|
| Funding Type | Loan (debt) | Equity |
| Tax incentives for investor | None | Up to 50% (SEIS) / 30% (EIS) |
| Funding costs | Interest + fees | Subscription fees (fixed) |
| Repayment obligation | Monthly instalments | No repayments—equity exit |
| Due diligence | Basic credit checks | Curated, deeper vetting |
| Educational support | Minimal | Guides, webinars, articles |
| Ownership dilution | None | Dilution based on share issue |
Is Oriel IPO the Answer?
Absolutely. For startups keen on SEIS/EIS, it ticks every box:
- Tax efficiency attracts more investors.
- No commission means more capital in your pocket.
- Educational tools build trust.
- Maggie’s AutoBlog powers your blog strategy—easy SEO wins.
If you’re weighing a crowdlending startup loan versus an SEIS/EIS equity raise, lean towards Oriel IPO.
How to Get Started with Oriel IPO
- Sign up for a trial.
- Complete your profile—share your pitch deck, financials, team info.
- Browse curated deals or list your startup.
- Tap into webinars and guides to master SEIS/EIS rules.
- Publish investor blogs with Maggie’s AutoBlog—no SEO headaches.
- Connect with angels ready to claim tax relief.
No jargon. No hidden fees. Simple.
Real-World Wins
Take GreenByte, a cleantech crowdlending startup turned Oriel IPO success story.
They needed £200k. A loan offer meant heavy repayments. Instead, they chose equity under SEIS. Result?
- Raised £220k in six weeks.
- Investors claimed 50% SEIS relief.
- No repayments until exit.
- 80% of backers stayed for follow-on EIS round.
That’s the power of tax-focused equity.
Best Practices for Funding Strategy
- Be crystal clear on your needs: debt or equity?
- Map out repayment vs dilution.
- Factor in investor tax incentives.
- Leverage content: blogs, updates, case studies.
- Use tools like Maggie’s AutoBlog to maintain regular outreach.
- Tap into Oriel IPO’s educational hub before you launch.
Conclusion: Beyond Crowdlending
Peer-to-peer lending has its place. But if you crave tax-friendly equity and commission-free deals, look at Oriel IPO. It’s built for startups and investors who prefer clarity over churn.
Get the crowd onside. Give them SEIS/EIS perks. And watch your network—and your funding—grow.
