Businesses need peer-to-peer funding now more than ever, Stuart Law, chief executive of Assetz Capital, has claimed.
Law (pictured) said that the platform has seen unprecedented demand from borrowers as banks are already pulling back from loan offers, sometimes at the last minute.
“Those businesses need our help and therefore your funding,” Law said in a video to Assetz investors.
“It’s exactly what happened during the last crisis and it will take some time to pass.
“In terms of the current state of play we are still funding loans, still seeing more money coming onto the platform, millions of pounds so far this week alone, supporting both lending and withdrawals but also the country.”
Law added that Assetz is grateful for its investors’ continuing support, saying that P2P lenders are helping to fund existing and future business borrowers through this difficult period.
“This pandemic has caused fast-moving events not seen before, but at the same time much was learned at the global financial crisis 10 years or so ago, that can be used again in this situation,” he told investors.
“This learning is already being used by the Bank of England decisions being made in days, not months or years as it was last time.
“Bank base rates look to me like they may be on the verge of going negative, which I’ve said can happen for some time. They’ve already reached nearly zero and with nowhere much left to run since below zero.
“In the meantime, we’ve delivered stable returns for seven years now, and still do today but of course, in such market turmoil, we do begin to feel the effects from this exceptional period. The reality is that some borrowers may have difficulties making payments over the coming weeks and months.”
However, Law said the government will step in and provide whatever support it takes, although how businesses access that support isn’t fully clear yet.
“The good news though is we’ve already seen our government start to act and that action will no doubt escalate quickly in line with how France and other countries are guaranteeing total support for businesses and their employees,” Law said in the video.
“We expect soon the majority of businesses here in the UK will be government backed in some way and that will bring great reassurance and comfort to our borrowers and investors, and our borrowers’ staff alike and remove much of the current uncertainty.
“At Assetz Capital we feel it’s our duty and responsibility to try to support the country and our financial system through this temporary crisis as best as we can whilst also protecting our investors and our 120 staff – not an easy balance.”
The platform has paused withdrawals from its Access Accounts for the time being, although Law emphasises that other withdrawals are unaffected.