Lender update – August 2021

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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There is a withdrawal fee of 1% of the capital withdrawn from the Growth Account, Growth ISA, Income Account and Income ISA.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.

Article author

Gareth Mackie

Gareth Mackie

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