ABLRATE has traded over £10m on its secondary market since launch, with its Innovative Finance ISA (IFISA) contributing to recent volumes, the peer-to-peer business lender has said.
“We introduced our new secondary market in 2015 and it has proved to be very popular having now traded over £10m,” said chief executive David Bradley-Ward on Thursday.
“Considering we have completed £27m in loans it shows how liquidity can be created for lenders in this marketplace and we are very proud of this achievement.”
Ablrate’s IFISA has contributed to secondary market trading volumes since August, the company said, as HMRC rules dictate that any movement of loans from a standard account to an IFISA account must be conducted in an open market.
“Many of our IFISA clients have used the secondary market this way, increasing the last month’s volume of trades,” Bradley-Ward said.
Ablrate also revealed that around £31,000 per day has been traded on its secondary market since June this year, equating to almost £1 a month. 30 per cent of trades were at a discount, 30 per cent at a premium and the balance at par, it said. The average trade was £355 with 9,854 trades completed.
The company reported that its IFISA has attracted over £2.3m from investors since its launch at the beginning of August. As Peer2Peer Finance News previously reported, the tax-free wrapper attracted nearly 100 investors within the first 48 hours.
“I think much of the success of the IFISA is down to the fact that our returns are very good but also that the liquidity created by our secondary market gives lenders much more control over their lending,” said Bradley-Ward.
“Of course, liquidity cannot be guaranteed, but we think we have created a market that can thrive in the various market cycles. We have a number of products that are in development that will utilise our secondary market technology and we are looking forward to launching these for our customers.”
Ablrate finances asset-backed transactions in aircraft, capital equipment and other secure, income-generating loans. It launched to the public in 2015 and offers investors returns ranging between 10 and 15 per cent.
It is not the only peer-to-peer lender to showcase its liquidity. On Wednesday, Assetz Capital announced that 28 per cent of loans are traded on its secondary market, which it described as “vital” as the industry matures.