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Peer2Peer Finance News | July 24, 2019

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Nicola Horlick warns no-deal Brexit will hurt asset-backed lenders

Nicola Horlick warns no-deal Brexit will hurt asset-backed lenders
Kathryn Gaw

MONEY&CO founder Nicola Horlick (pictured) has warned that a no-deal Brexit could hurt peer-to-peer lending platforms which rely on asset-backed investments.

Horlick, who earned the moniker ‘City superwoman’ while juggling a successful investment management career and family life, told Peer2Peer Finance News that she was “very anxious” about Brexit.

She expressed particular concerns about the impact that a no-deal EU exit could have on the UK’s growing property-backed and asset-backed lending market.

“Because we look for assets, we have a heavy weighting in our capital loans in the engineering sector,” Horlick said. “This manufacturing and engineering sectors make up something like 10-11 per cent of the UKs GDP, but around 40 per cent of our loans are in manufacturing because that’s where the assets are.”

Many P2P platforms offer asset-backed lending, with assets ranging from property, leaseholds and collectable assets, to machinery or warehouse stock.

Horlick added that uncertainty over the future of import and export duty could do further damage to those businesses that are in the manufacturing sector, placing a series of P2P loans at risk of default.

“I’m very concerned that everything we do is asset backed,” she said, adding that she recently backed the Grounds Investment IFISA as it “adds diversification” by investing in the German property market.

“The thing about the UK is it’s quite a volatile property market, especially in the South East,” she said.

Read more: SMEs fear impact of Brexit on cashflow

“If you look at the history of the property market in the UK you get these pockets and bubbles where the markets can bottom out. By contrast, the German property market since the war has been very stable and has grown in a very measured way.”

She added that she believes this is a “dangerous time to invest in commercial real estate” due to ongoing stock market volatility and Brexit uncertainty.

“Brexit is a huge concern,” Horlick added. “If it’s a choice between May’s deal and revoking Article 50, I think we’ll end up with May’s deal.”

Read more: SME finance demand down on Brexit uncertainty