On 21 January 2021, LendingCrowd suspended trading on its secondary Loan Market. Our obligations in operating a Loan Market are significant as we have a regulatory requirement to ensure that the valuation of the loan part for sale is fair and appropriate. Based on the economic conditions, and the uncertainty this may cause with respect to borrower performance, we felt that suspending trading on our secondary Loan Market was the most responsible course of action.
In response to the economic shock caused by the Covid-19 pandemic, our objective has always been to deliver the best outcomes for lenders and borrowers for the long term. We continue to review a wide range of macro-economic data, which shows that conditions still remain stressed for British SMEs, with regional and sector differences and challenges.
As a result, we have decided that our Loan Market will remain closed to lenders for the time being. We know that some of our lenders are eager for a return to the buying and selling of loan parts again, but we feel it is still very early in the pandemic recovery. We will of course continue to monitor this situation and update you on the status of our Loan Market as we start to see a return to normal market conditions.
Since the outbreak of the Covid-19 pandemic, our team has focused on doing the right thing for our lenders and borrowers. We will continue to communicate updates on this situation and when we will be likely to resume offering loans that individual lenders are permitted to fund.
For the time being, individual 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.
Important information about fees
There is a withdrawal fee of 1% of the capital withdrawn from the Growth Account, Growth ISA, Income Account and Income ISA.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.
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.