Burning Night Group has raised over £1m for expansion of its group of bars in the first stage of a drive to raise funds through a peer-to-peer lending platform.
It has set itself a target of raising £3.5m through Crowdstacker, one of the UK’s fastest-growing P2P lending platforms, offering 7% per annum interest to investors.
Burning Night Group already operates in cities around the UK, including Leeds, Liverpool, Manchester and Cardiff, with its German-themed Bierkeller, its sports bar Shooters and beer bar Around the World.
Employing over 500 people with an annual turnover in 2016 of over £17m, Burning Night Group plans to plough the investment raised with Crowdstacker into further growth by upgrading existing sites and creating new ones.
Alan Harper, CEO of Burning Night Group, said: “Generating nearly a third of our overall target so quickly is incredible and really demonstrates the attraction of P2P investments for people looking for better rates of return than products like cash ISAs can currently offer.
“We chose the P2P route because it is also a way for us to engage with our huge community of customers and fans. All our bars have a strong contingent of regulars, and we wanted to give them a way to benefit from our success by becoming involved with our expansion.”
About half the money raised so far has been invested via the tax-efficient Innovative Finance ISA. Crowdstacker enables its lenders to hold their P2P loans in this investment wrapper, which was introduced by the Government in April 2016, because it is one of only a handful of P2P platforms with the required Financial Conduct Authority permissions and is an HMRC-approved Innovative Finance ISA Manager.
Karteek Patel, CEO and co-founder of Crowdstacker, said: “We are very much focused on attention to detail and adopt a careful methodical approach to all that we do. This has stood us in good stead to secure the necessary full FCA authorisation so that we are able to offer everyday investors looking for potentially better rates of interest additional benefits such as the tax-free ISA.
“And it also means that we are able to offer investors more robust options, which can offer higher levels of security than some other P2P investments.
“When you invest through us, you are able to choose specific, hand-picked businesses to lend to. We do a huge amount of due diligence before we even consider allowing a business to raise money on our platform. And loans are only approved if that business is willing and able to offer sufficient levels of protection to investors.”
The minimum investment for the loan is £500 and the term is three years, with interest payments made quarterly. Security has been structured in several ways to mitigate as many risks as possible. Firstly, loans are secured on the assets of Burning Night via a first ranking debenture, and secondly, six of its principal subsidiaries will provide cross guarantees where they guarantee Burning Night’s liabilities. Finally, two of its principal subsidiaries have given a first ranking debenture over their assets and business. For more information, visit https://crowdstacker.com/risk-warning.
Burning Night Group was founded six years ago by Alex Hazzard and Allan Harper. Click here for Bar magazine’s profile of the group originally published in our February 2016 print edition.