6 September 2017
It is fair to say that "peer-to-peer lending" is fast becoming a trend in mainland Europe, despite falling short of the 70/30 (70% non-bank/30% bank financing) statistics in the United States.
Holla Advocaten's Banking & Finance team, based in the Netherlands recently advised on a EUR 3.000.000 peer-to-peer lending transaction for the refinancing of a real estate portfolio. Yet another example demonstrating the banks’ reluctance for this market segment due to regulatory requirements and/or commercial interests on the one hand, and strong appetite for investors due to low savings on the other.
“We see a trend in parties initiating peer-to-peer lending transactions and/or the establishment of alternative investment funds for corporate financing purposes” says Monieke Linck, Head of the Banking & Finance department at Holla Advocaten. Her experience with assisting on syndicated or clubdeal leveraged finance transactions is very much of use here, as the hurdles of both types of transactions are very similar (e.g. parallel debt structures necessary under Dutch law, majority lenders’ decision making and intercreditor mechanics).
On the other hand, Monieke believes that the regulatory aspects of these kinds of transactions should be well considered. For example, the activities of the arranger may qualify as (regulated) payment services and/or investment advice under The Markets in Financial Instruments Directive 2004/39/EC (MiFID) and the prohibition on inviting repayable funds under the Financial Supervision Act should be taken into account.
Furthermore, these kinds of initiatives may increasingly be regulated as investment funds since the The Alternative Investment Fund Managers Directive (AIFMD) came into force in the Netherlands on 22 July 2013. Nevertheless, these hurdles can be overcome, which would enable this market area to grow substantially.
Holla's Banking & Finance team, in close cooperation with its Tax and Corporate M&A teams, regularly assists with leveraged finance transactions (such as acquisition finance, real estate and/or project financing), peer-to-peer and alternative financing platforms lending and advises on regulatory aspects on deal and/or fund structuring.
For further information or assistance with Banking & Finance matters, please contact Monieke Linck
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