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Peer2Peer Finance News | August 17, 2019

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SMEs and P2P lenders back Brexit-heavy Queen’s Speech

SMEs and P2P lenders back Brexit-heavy Queen’s Speech
Marc Shoffman

PEER-TO-PEER lenders have heralded legislation on housing and asset-backed financing in the Queen’s Speech that should help boost their platforms.

The Queen outlined 27 bills and draft bills on Wednesday morning, with a strong focus on Brexit, but other measures could also benefit the P2P sector.

John Goodall, chief executive of buy-to-let lender Landbay, said the government’s focus on housing legislation – with commitments to build more homes – was reassuring.

“Since the election we have seen sustained investor interest in buy-to-let mortgages via our platform,” he said.

“With interest rates remaining low for the foreseeable future, we don’t expect investor appetite to change. It was, however, encouraging to hear that housing remains a focus.”

Meanwhile, Ben Shaw, founder of asset-backed P2P lender HNW Lending, welcomed the draft Goods Mortgages Bill, which would create “new opportunities for sole traders and partnerships to access finance by reforming goods mortgages and helping these businesses raise finance against their assets.”

The bill contained proposals to “provide greater confidence to invoice financiers to lend to small, unincorporated businesses, and will make lending cheaper.”

It also promises more support for clients of asset-backed lenders such as those using logbook loans.

Shaw said streamlining the lending process on assets would be beneficial.

“It is good to see some protections for consumers coming in as authorised P2P lenders are regulated by the FCA and so need to treat their customers fairly – this is not the case for many of the other lenders out there, especially those dealing in logbook loans and other assets,” he said.

“We all know that some pawnbrokers have bad reputations and let’s hope that part of this act helps clean up the less savoury elements of the lending industry.”

Read more: Female entrepreneurs more cagey about Brexit prospects

Small businesses lobby groups also welcomed the speech, especially the focus on helping small firms export abroad and the continued need to attract talent from across the world.

There were also commitments to consult businesses during the exit negotiations, “Over the past 12 months the government has engaged extensively on EU exit with businesses and trade bodies across all regions of the UK,” a statement accompanying the legislation documents said.

“This has included hundreds of meetings with stakeholders from the business community, from civil society and beyond.

“As we enter the negotiation phase we will look to intensify this work in order to test and validate positions and to continue to build support from the business community as we move forward.”

Carolyn Fairbairn, director general of business lobby group the CBI, suggested the recent heatwave has warmed the government’s view of business and its contribution to people’s lives.

“This welcome change in tone needs to be backed by clarity and action now,” she said.

“Firms will expect all politicians to put pragmatism before politics, starting with Brexit.”

Read more: Post-Brexit trade doubts weigh on small UK firms

But Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said it would have been good to see some commitments domestically.

“We are pleased with the ambition to provide certainty for businesses as we head towards Brexit and the commitment to low taxation,” Cherry said.

“This is vital for small firms who are facing both uncertainty and rising costs of doing business. A thriving small business community, helped to grow by a supportive government, will be crucial to a strong post-Brexit economy.

“But it is disappointing that this Queen’s Speech was light on other domestic measures for small business.”

He said the government must tackle issues such as reform of business rates and changes to corporate governance, to stop big companies badly treating their small business suppliers and contractors.

Read more: Investment firms call for clarity in case of a ‘hard Brexit