Since the outbreak of the Covid-19 pandemic, the entire LendingCrowd team has focused on supporting our lenders and borrowers. From enabling eligible borrowers to focus on their business by offering them repayment holidays, to keeping lenders informed of changing market conditions, all our efforts have been driven by the will to do the right thing.
All of our lending is currently being provided through the Coronavirus Business Interruption Loan Scheme (CBILS), which is only available to institutional funders – individual lenders are not allowed to fund these loans. We expect that all of our new lending will be made through CBILS for the foreseeable future, and no new loans will be available to individual lenders while this is the case.
As a result, we have temporarily stopped accepting new cash deposits from existing lenders. In addition, new lenders will not be able to register with our platform.
Why have we done this?
Currently, the only loans available for individual lenders to purchase are on our secondary Loan Market. The ability to purchase parts of these loans depends on other lenders selling their holdings. At this time, there is a low level of loans available on the Loan Market, making loan diversification difficult.
Cash held in LendingCrowd accounts does not earn interest until it is used to fund loans. Therefore, we feel it is in the best interests of lenders to take this temporary step and stop taking new cash deposits and registrations.
This decision is in line with guidance from our regulator, the Financial Conduct Authority (FCA), to prevent cash balances accumulating in accounts that are not earning interest because funds are not being lent out. We will review this decision on a regular basis as market conditions change.
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.
Find out more in our Lender FAQs.
On behalf of all our borrowers, we thank our valued community of lenders for their support.