Peer-to-peer lending sites: MSE guide discussion

Nardge

Growth Street are closing shop, Coronavirus' first (and hopefully last) P2P victim! They're one of the P2P companies from which I haven't been able to withdraw a single penny since the collapse began. In general terms, they've appeared legitimate, responsible, and professional in my dealings with them, and I thus very much hope I get most of my original investment back. Time will say...

What isn't clear is why Growth Street have caved in, and not any other of the 'Business' orientated P2P platforms with which I've been or am still invested, these being Funding Circle, Zopa, Lending Crowd, Ratesetter, Lending Works, and Assetz Capital. Funding Circle I left long ago, Zopa and Lending Crowd don't appear to have had any major issues in releasing funds, Ratesetter, Lending Works, and Assetz Capital all seem to be precariously on the brink and may go next unfortunately. I very much hope they don't!

I recall it being said 'Property Development Loans' were the ones to avoid, ironically however, with the exception of Octopus Choice (who are also frozen), I've either been able to withdraw the vast majority of my funds, or my loans came to maturity recently thus permitting extraction without issue (CapitalRise, CrowdProperty, Proplend, Loanpad, Kuflink). I thus note 'Property' P2P has been a much safer investment to date. In contrast to 'Business' P2P, they continue to soldier on, with apparent relative ease.

With Kind Regards

"On March 16 2020 we notified you that due to insufficient liquidity on the platform we would be entering a Liquidity Event* for a period of 90 days under clause 7.3 of our investor terms.

We regret to inform you that the continued impact of the novel coronavirus (COVID-19) on the economic environment has prevented us from resuming normal operations at the end of the 90 days period. Without the means to remedy the Liquidity Event we are required by clause 7.7 of our investor terms to call a Resolution Event**.

When considering whether the Liquidity Event could be remedied we looked at the following factors:

• The stability of the landscape and wider economic climate which prompted investors’ concerns;
• Whether resuming platform operations would result in significant withdrawals or settings alterations; and
• Whether there was sufficient liquidity to cover the sum of previously requested withdrawals plus an additional contingency for further withdrawals

It was concluded that normal platform operations could not resume.

We will formally give notice to our borrowers to repay in line with the terms of their contractual agreements (it being acknowledged that some borrowers need to be given longer which will extend the repayment period) and begin the closure of the current loan book.

Our Relationship Management team will continue to work with our borrower portfolio to support them to repay their facilities. It is our duty and strongest desire to return as much of your original investment as quickly as possible during this period.

The occurrence of the Resolution Event will trigger the following changes to your investment portfolio:

• You can withdraw any unmatched amounts from your holding account, however, you cannot withdraw any invested funds;
• Interest will no longer continue to accrue on your invested funds. The total amount you are owed is the principal amount you invested plus interest accrued on the loans up until the date of the Resolution Event (your investor dashboard will display this amount);
• All loans outstanding have been assigned to Growth Street Provision Limited (GSP) to manage repayments from borrowers and distributions to investors.

These changes will be available in your dashboard by the end of the day tomorrow, 16th June.

Ensuring that money is returned fairly and equitably to investors is Growth Street’s priority. Any payments we receive from borrowers will be distributed to investors on at least a quarterly basis as per clause 6.8 of the investor terms. As a responsible regulated entity we are in regular communication with the regulator and will continue to keep them informed on an ongoing basis.

If you want to contact us you can call us on 0808 123 1231 (and select Option 4) or start a live chat on the website. We will continue to communicate with you regularly during this period and are happy to answer any questions or concerns you may have. Whilst this is a difficult outcome we want to thank our investors for their support.

Kind regards,
Kim Goetzke, Chief Operating Officer

**

* Liquidity Event - In cases where the borrower would like to keep the funds for longer than 30 days, we will automatically refinance any amount due with new loans (a ‘Rollover’). This allows investors to get repaid as expected after 30 days, but borrowers have more flexibility around how and when they repay. If, in the reasonable opinion of the board of directors of Growth Street, there is not enough money available on the platform to fund all drawdown requests and automated Rollovers, and we are not able to rectify the position through normal trading, the board will declare a ‘Liquidity Event’.

** Resolution Event - In order to spread the risk of borrower default equally between all investors, if a Resolution Event is declared, the benefit of all loans outstanding will be immediately assigned to GSP to be held for the benefit of the investors as a whole. All payments received from borrowers will continue to be collected by GSP and held on trust for investors as a whole."

Albermarle

 I thus note 'Property' P2P has been a much safer investment to date.

Not sure the Lenders to Collateral, Lendy and Money thing would agree with you on this point.

Ratesetter, Lending Works, and Assetz Capital all seem to be precariously on the brink and may go next unfortunately. 

I just requested  a payment from lending works ( interest and capital repaid into cash account over the last few weeks) over the weekend and it arrived early this morning . Hopefully a good sign.

Also maybe I am wrong but I think Assetz should be one of the survivors, they always seem very well run if that counts for anything.

Nardge

Albermarle said:

 I thus note 'Property' P2P has been a much safer investment to date.

Not sure the Lenders to Collateral, Lendy and Money thing would agree with you on this point.

Ratesetter, Lending Works, and Assetz Capital all seem to be precariously on the brink and may go next unfortunately. 

I just requested  a payment from lending works ( interest and capital repaid into cash account over the last few weeks) over the weekend and it arrived early this morning . Hopefully a good sign.

Also maybe I am wrong but I think Assetz should be one of the survivors, they always seem very well run if that counts for anything.

Yes you're quite right, I ought to have written "I thus note 'Property' P2P has been a much safer investment to date in my case". Admittedly, I arrived in P2P only after the Collateral debacle, and was steered clear of Lendy and Moneything by the thoughts of commentators on this thread. 

Fingers-crossed that Lending Works and Assetz Capital make it through, thanks for your insight in these!

With Kind Regards  

drphila

Growth Street have made a repayment today (17%) ahead of the scheduled first repayment date of 15th Sept. (They say a further repayment is "expected" on that date)

Edit: Reason - wrong date

quirkydeptless

drphila said:

Growth Street have made a repayment today (17%) ahead of the scheduled first repayment date of 10th Sept. (They say a further repayment is "expected" on that date)

My account says "Next payment expected: 15 Sep 2020"

At least they're unwinding in an orderly fashion so far

Albermarle

Also Lending Works have been bought out by an alternative investment fund . Does not mean that lenders will not suffer some losses on bad debts , but should ensure the platform survival .
Assetz are also facilitating Coronavirus business loans . Again no specific relief for lenders but keeps business ticking over on the platform ,

drphila

quirkydeptless said:

drphila said:

Growth Street have made a repayment today (17%) ahead of the scheduled first repayment date of 10th Sept. (They say a further repayment is "expected" on that date)

My account says "Next payment expected: 15 Sep 2020"

At least they're unwinding in an orderly fashion so far

Yes my mistake, it says 15 Sep on mine too.

Yesterday's payment now in my bank account

drphila

Another Growth Street payment now received in holding account (additional 16%)

N1ckS

drphila said:

Another Growth Street payment now received in holding account (additional 16%)

I was a little confused earlier as to what exactly the 33% in the email below from Growth Street referred to given the distribution earlier today:

I am very pleased to let you know that we have made the first distribution to investors. The total amount that has been distributed is £5.3m. The relevant proportion of the funds relating to your investment are now available in your holding account to withdraw. 
On the basis of recoveries to date, we’re pleased to have been able to bring forward the first date of distribution from September. Our Relationship Management, Risk and Credit teams have made strong progress in recovering repayments across our borrower portfolio, and we have offboarded 18 out of 90 borrowers. The amount that has been distributed equates to 33% of the total amount assigned at the declaration of the Resolution Event. 

Both payments however do roughly equate to 33% of my total investment. Here's hoping for further progress in September.

Seldonista

I have ISAs with the big 3 that I opened over the last 3 years, for the ones that aren't lending out is the cash they hold FSCS protected or not? I'd rather not fiddle with it and keep the ISA allowance.