FundingSecure toughens stance on defaults
FUNDINGSECURE has announced that it is taking a tougher stance on borrowers as it targets a default rate of zero per cent and expands its product range.
The peer-to-peer lending platform told Peer2Peer Finance News that it is planning to strengthen its underwriting processes, accept fewer loans and hire more staff to work with borrowers from the start to anticipate and avoid any issues.
“We are looking at zero defaults going forward,” said FundingSecure’s director Nigel Hackett. “There’s increased due diligence at all levels. The markets are maturing, and we’re trying to change with it.
“We’ve always tried to be fair towards both our investors and our borrowers. In a few cases we’ve had to put some loans into receivership because that was the best solution to bring the maximum return. Going forward the intent is to avoid that, so currently we’re taking a tough stance.”
The platform currently has a default rate of 0.6 per cent on its loanbook.
Raj Kumar, executive director of FundingSecure, revealed that the platform is increasing the term of its loans to a maximum duration of 18 months, up from six months previously.
“We are also starting to include underwriters,” he said. “So when we put up a loan on the platform we will already have investors in place to take up any shortfall.”
This underwriting will take the form of institutional cash which will sit underneath each deal before the investors come on board.
“The business is being further capitalised which will allow us to prepare for the growth of the future,” added Kumar. “We are upgrading our systems, and we are recruiting additional staff so that we can have better communication with borrowers, and we can pass that on to the lenders.”
Kumar said that he expects the new funding to come from a combination of family offices, institutional investors and high-net-worth investors.
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This article featured in the March edition of Peer2Peer Finance News, now available to read online.