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Peer2Peer Finance News | September 16, 2019

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HNW Lending eyes Collateral loanbook

HNW Lending eyes Collateral loanbook
Marc Shoffman

ASSET-BACKED peer-to-peer lender HNW Lending has thrown its hat in the ring as a potential buyer of the loanbook of its rival Collateral, which fell into administration in February.

Collateral became unreachable in late February when its website went down and it later transpired it had fallen into administration.

A letter from the administrators Refresh Recovery said the existing loans had been ring-fenced and would been wound down, which has led to industry players such as BondMason and Ablrate expressing their interest in taking on the book.

HNW Lending is the latest platform to have shown an interest and founder Ben Shaw told Peer2Peer Finance News he has made contact with the administrators but is yet to receive a response.

“At the moment there is no authorised company looking after those loans,” Shaw said. “If I were an investor I would be nervous about who is protecting my interests.

“They need somebody to look after those loans, make sure the interest is collected on time and chase repayments.

“If you can take over a loanbook without adding too much to your costs then it is a win for everybody. Theoretically we get a bunch of investors that may want to invest in our loans and we get some loans that hopefully there is some margin to be made on.

“Investors get to know the loans are being serviced, we make some money and the Financial Conduct Authority sees the loanbook moved to an authorised provider.”

Read more: Collateral administration stalls as FCA seeks to appoint own administrator

Collateral started out with a similar business model to HNW Lending, providing asset-backed P2P loans secured on items such as classic cars.

But Collateral moved into property development loans at the end of last year. Shaw said HNW Lending, which has funded more than £50m of loans, takes property as an asset but would never expand into property loans.

Read more: P2P platforms reassure investors after Collateral closure

“If you are doing development you can lose your shirt easily,” he added.

“Property is our biggest asset but we don’t do development loans due to the risk.

“I don’t want to lose anybody money, least of all myself, as I take the first loss.”

He said HNW Lending has a wind-down plan in the case of the business going into administration and has an agreement with another party to take on its loans in such a scenario.

This story appeared in the April issue of Peer2Peer Finance News, now available to read online