GROWTH Street has attracted 600 investors in the five months since it started accepting retail money, the firm announced on Thursday.
The alternative finance platform, which channels funds to small- and medium-sized enterprises, expanded its remit to individual lenders in December last year, after receiving regulatory permission.
Since then, it has also been branded as one of the lowest-risk lending platforms for retail investors by P2P research and rating firm 4th Way.
The new investment inflows and quality badge were helped by the credit strength of the borrower portfolio as well as by the platform’s risk management strategy, which pivots on short term loans and a separate loss provision fund, the company said.
“Our borrowers successfully navigated an uncertain economic landscape in 2016, averaging annual revenue growth of over 24 per cent while maintaining strong profit margins of 10 per cent,” said Growth Street’s founder Greg Carter, who recently resumed his chief executive role at the firm.
“The capital from our investors can help them continue this impressive track record in the coming year.”
The platform typically matches all investors’ money with borrowers for 30 days, which enables the former to withdraw funds with an equally short notice. Investors typically choose to re-invest their funds automatically, it said.
Meanwhile, the provision fund has so far collected about £123,000 from borrowers and is expected to gather £153,000 in the next 12 months, it told Peer-to-Peer Finance News.
The platform’s founding investors have also disbursed £200,000 into the fund, aiming to keep provisions at more than nine per cent of the total loan book.
“They have committed future payments into the loan loss provision of up to £1m to maintain this percentage level as the book grows,” a spokesperson said.
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