Ex-banker takes chance to earn return while giving businesses a chance to grow

Former business banking manager Roy Hudson knows a thing or two about the difficulties facing small firms when it comes to securing finance.

Roy, who retired six years ago, is also familiar with the problem of getting savings returns above inflation so the opportunity to boost his returns while helping small businesses with funding was too good to resist.

"I am appalled at some of the stories that filter back to me from old colleagues about the way banks are treating small businesses.

"Charges and interest rates are sky-high and some of them struggle to get any lending at all."

Roy, 62, went to the Funding Circle website when he heard about the service and decided the combination of a better savings return and the competitive loan rates offered to small firms had the makings of a good deal. He used the auto-invest function to spread his 2,500 lending pot across eight different firms in the lowest risk category, giving him an interest rate of 6.5 per cent.

But the impression is that ex-banker Roy - now chief executive of Bobath Scotland, a charity for children with cerebral palsy - is motivated as much by the chance to offer businesses an alternative source of funding as he is by the interest rate.

"Banks are rebuilding their balance sheets but as the expense of depositors and borrowers, who are being screwed. It's not the way to do business but they are getting away with it."

• Bobath Scotland is holding a sports dinner at Hampden Park on Thursday, 7 October. See www.bobathscotland.org.uk