LendingCrowd has evolved significantly since we launched in October 2014, with all of our efforts focused on improving our platform for borrowers and lenders alike.
In November 2016, we became the first peer-to-peer lender focused on the small business sector to move from interim to full Financial Conduct Authority (FCA) permission. This enabled us to launch one of the first Innovative Finance ISAs on the market in February 2017.
The recent introduction of new rules from the FCA brought with it a number of changes, including a new investor classification and appropriateness assessment. These are designed to show that lenders understand the risks involved before lending money to businesses.
Since we launched, we have delivered almost 840 loans, totalling more than £74 million, to businesses and sole traders the length and breadth of Britain. As our loan book matures, we have used data on borrower repayment behaviour to update the target rates for our Growth Account and Income Account (including the ISA versions). These will be reviewed every three months.
We have now evolved the way in which we value your portfolio, in order to calculate actual returns. The majority of lenders will see their actual returns are unchanged.
The key factor behind this change is the way we value overdue and defaulted loans. For these loans, accrued interest is not applied, and we take into account the likely probability of default and recovery post-default when valuing your portfolio.
This approach has been verified by the third-party lending performance data specialist Brismo, which provides independence and credibility to the returns we show on our platform.
Please remember that your capital is at risk when lending to businesses. Past returns are not necessarily a guide to future returns. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.