LendingCrowd was accredited as a lender under the Coronavirus Business Interruption Loan Scheme (CBILS) in July 2020, enabling us to distribute UK government-backed loans to small and medium-sized businesses that have been affected by the Covid-19 pandemic.
All of our lending is currently being provided through 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.
In light of the movement of all areas of mainland UK into a full lockdown, our Credit Committee this month determined that, due to current economic conditions, temporarily suspending trading on our secondary Loan Market was necessary in order to treat our lenders fairly.
Further, as there are currently a low number of loans on the LendingCrowd platform, this makes loan diversification increasingly difficult for lenders.
As a result of the two factors noted above, this means that, for the moment, lenders will not be able to buy or sell loan parts. Business borrowers on our platform will continue to make repayments, which will accumulate as cash in lenders’ accounts. It will not be possible to reinvest these repayments while the secondary Loan Market is suspended.
We feel it is in the best interests of our community of lenders to take this temporary step. We will review this decision on a monthly basis at our Credit Committee.
Why have we done this?
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’.
We also want to avoid lenders becoming overly exposed to individual loans due to the lack of available lending opportunities on our secondary Loan Market.
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.