FUNDING Circle’s changes to its secondary market are set to go live today, including the introduction of a seller’s fee.
Investors looking to sell loans will now have to pay a 1.25 per cent transfer fee which will be deducted from their proceeds and go to the buyer of the loan part.
Rather than operating on a first-come, first-served basis, the new tool will cycle through all investors wishing to sell loan parts as many times as possible within a 120-day period.
The peer-to-peer business lender said this would allow investors to get their funds back quicker.
The change comes after the average resale time for loan parts rose to 124 days in October.
“The new tool will cycle through all investors wishing to sell loan parts as many times as possible within a 120-day period,” Funding Circle said in a blog post on its website. “This will mean investors start to receive money back more regularly from the loan parts that have sold.”
The changes mean that Funding Circle investors who have been waiting to sell their loan parts for the longest amount of time will be put on a level playing field with all other sellers on the secondary market.
All of the ‘big three’ P2P lenders now charge a fee to sell loans.
Zopa charges a one per cent fee on its Core and Plus account while RateSetter investors must pay 30 days of interest to withdraw from the Plus account and 90 days in Max.
There is no fee to sell investments from RateSetter’s Access account.
Analysis of 42 P2P lending platforms by P2P analysis and ratings firm 4th Way says that 18 firms always charge a fee, 14 never charge, five do sometimes and another five won’t let you sell at all.