JUSTUS has predicted that UK banks are poised to “aggressively withdraw from lending” due to economic uncertainty, creating a great opportunity for peer-to-peer lenders.
“As many of you know, we built the JustUs platform to help fill the funding gap following the credit crunch,” Cheshire-based bridging and buy-to-let lender said in an email update to its customers on Thursday.
“We are now slap bang in the middle of another economic storm with Brexit and global trade wars heating up. Over the coming months and years, our P2P platform is going to be in need more than ever before as UK banks are expected to aggressively withdraw from lending.
“At JustUs towers these global events are not treated as doom and gloom, quite the opposite!”
The lender cited the example of a bridging loan on its platform that it said was “a perfect illustration of what that the banks should be lending against all day every day”. The borrower needed £250,000 to complete the development of three bungalows with a £1.2m sales price.
JustUs is readying to enter the residential mortgage market, after the Financial Conduct Authority confirmed that P2P lenders would be regulated under home finance rules. This means that consumers will receive the same level of protection as they would from conventional residential mortgage providers.
“With millions of property owners unable to release equity in their properties, JustUs is set to play a substantial role in filling the ever-increasing funding gap,” the firm said. “The new product range has a multi-billion-pound funding need and we are working tirelessly recruiting new JustUs shareholders and lenders.”
JustUs is currently looking to raise £4.5m to fund its expansion plans. £128,000 has been raised so far, according to its website, with the campaign set to close at the end of the year.
There is a minimum investment of £5,000 in the fundraising, which is eligible for inclusion in the Enterprise Investment Scheme – a tax relief designed to encourage investment in unlisted companies.