Lender update – July 2022



As a lending platform that is regulated by the Financial Conduct Authority (FCA), we are required to publish a document called an Outcomes Statement. We published our Outcomes Statement for 2021 and it is available for download.

Under FCA rules, our Outcomes Statement must include the expected and actual default rates for all lending agreements that we have facilitated by Risk Band. We are also required to provide a summary of the assumptions used when determining expected future default rates.

Our obligations in operating a Loan Market are significant
as we have a regulatory requirement to ensure that the valuation of a loan part
for sale is fair and appropriate.

Economic conditions still remain unstable for certain SMEs
and sectors. We have no immediate plans to re-open the Loan Market.

The lending landscape
On 4 February 2022, LendingCrowd was accredited by the British Business Bank to provide funding through the Recovery Loan Scheme (RLS), which was designed to support businesses as they recover and grow following the Covid-19 pandemic.

RLS loans could only be funded by institutional lenders – individuals were not allowed to fund these loans. To support businesses via the RLS and our core term lending product, LendingCrowd agreed a £100 million institutional funding deal, the largest in our history, which was announced in February this year.

As we emerge from the pandemic, LendingCrowd continually
monitors the performance of our borrowers and the underlying economic
conditions. If we identify an opportunity to re-open our Loan Market, we will
consider this carefully and cautiously, within the context of treating our
customers fairly.

Important information for lenders
Lenders with a cash balance in their LendingCrowd account should strongly consider moving these funds into an alternative interest-bearing account, such as a bank account, as per guidance provided by the FCA. Interest repaid into a LendingCrowd account and not lent out does not earn interest.

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