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Covid-19 lender update – April 2021


The Coronavirus Business Interruption Loan Scheme (CBILS), designed to support the continued provision of finance to smaller businesses during the Covid-19 pandemic, is now closed to new applications.

Since the outbreak of the pandemic, all our lending has been made through CBILS, which is only available to institutional funders – individual lenders are not allowed to fund these loans. No new loans are currently available to individual lenders on our platform.

On 21 January 2021, we announced that, due to the prevailing economic conditions and the low number of loans available on our platform, suspending trading on our secondary Loan Market was necessary to treat our lenders fairly.

As a result, lenders are not able to buy or sell loan parts. We have also stopped accepting new cash deposits from existing lenders, and new lenders are not able to register with the LendingCrowd platform. We recognise that our actions may not be welcomed by all investors but our objective always remains to take a cautious approach to obtaining fair outcomes for lenders.  

Business borrowers on our platform continue to make repayments, which will accumulate in lenders’ accounts as cash. It will not be possible to reinvest these repayments while the secondary Loan Market is suspended.

At the most recent meeting of our Credit Committee, it was decided that our Loan Market will remain closed to individual lenders. We will continue to review this position on a monthly basis and we will communicate updates.

Why have we done this?
We want to avoid lenders becoming overly exposed to individual loans due to the lack of available lending opportunities on our secondary Loan Market.

Our decision to temporarily halt trading on our secondary Loan Market is in line with the Financial Conduct Authority’s principle of ‘Treating Customers Fairly’.

Cash held in LendingCrowd accounts does not earn interest until it is used to fund loans. Lenders should consider moving this cash to an interest-bearing account with another financial institution at this time. Please note that there is a withdrawal fee of 1% of the capital withdrawn from the Growth Account, Growth ISA, Income Account and Income ISA. This is paid only when a withdrawal is made, not when a loan is sold. We continue to charge this fee as it relates directly to services incurred by lenders with respect to the collection and allocation of borrower repayments.

Since the outbreak of the Covid-19 pandemic, the entire LendingCrowd team has focused on doing the right thing and supporting our lenders and borrowers. Find out more in our Lender FAQs.

When lending to businesses, it is important to remember that your capital is at risk. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Article author

Gareth Mackie

Gareth Mackie

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If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

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