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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.
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