Assetz Capital investors clash over forbearance vote

Assetz Capital investors have clashed over the platform’s upcoming vote on forbearance for borrowers.

On Wednesday, the peer-to-peer lender said there is an expectation that many commercial mortgage holders will need to pause or reduce payments for an initial three-month period, in line with government suggestions on time frame.

It said this will be continually reviewed and in all reasonable circumstances, borrowers will not be defaulted.

Read more: Assetz Capital to introduce lender loan servicing fee

“Protecting their business, employees and supply chain, up to 100,000 individuals, is the priority,” the platform said.

“A lender vote on forbearance will take place shortly.”

On the P2P Independent Forum, some investors supported the idea of a three to six month extension, with one forum user saying that it seemed reasonable compared to appointing administrators or receivers in a hostile economic climate.

Another Assetz Capital investor on the forum said it would be hypocritical not to offer the similar flexibility to those they are lending to when they are begging for support from their banks.

“The world is going to get very ugly in the next few weeks – I am sure we will have some losses but forcing businesses under now will only increase those losses,” the investor said.

However, other investors said they were voting against the forbearance.

“What gives Assetz Capital the right to determine borrowers’ access to capital is more important than that of your investors?” one said.

“In simple terms if you are presently lending £240m on a two-year term, your actions have just given the borrowers a £30m payment holiday, whist preventing lenders having access to funds that might pay their mortgages, save their businesses etc.

“Why doesn’t Assetz Capital get this funding from your institutional investors?”

Another investor accused the platform of changing its terms “at a whim” and said that it had lost confidence in the firm.

“Prior to today’s actions Assetz Capital had more sources of capital, but they have blown it in one shot,” the investor said.

The restrictions against P2P lenders offering the coronavirus business loan interruption scheme has been lifted, with Assetz among the platforms applying to be accredited.

Last month the platform paused withdrawals from its access accounts, citing Covid-19 concerns.