An overwhelming majority of Assetz Capital’s investors have voted in favour of the platform’s proposed forebearance measures, which have been designed to help borrowers survive the coronavirus pandemic.
Just 1.7 per cent of investors voted against the measures, despite recent reports of clashing views on investor forums.
“We are satisfied by the result of this lender vote,” said Stuart Law (pictured), chief executive at Assetz Capital.
“We want to do the right thing in this difficult time and provide businesses support, but we also asked our lenders if they agreed with us – and they did. We want to find ways to help borrowers manage and survive this difficult situation – and this allows us to provide forbearance and loan extensions in some cases although it doesn’t affect any presently defaulted loans that will continue on their current plan.
“Our borrowers are the beating heart of the British economy. They are retailers, manufacturers, importers, exporters, care homes, hotels and wholesalers – as well as many small regional housebuilders helping to solve the housing crisis.”
The forbearance measures allow borrowers to extend their loans for at least three months, where needed. This followed a direct request from Assetz Capital to investors to support the UK’s economy by voting for the measures. The platform estimated that its borrowers directly employ or have direct sub-contract relationships with 100,000 individuals, meaning that their actions could have a significant impact on the UK’s GDP.
“Most of these businesses, just like their counterparts across the globe, have seen a substantial or total loss of income,” added Law.
“Most are unable to work with staff sent home. Many are not yet certain how and when they can repay their loans again in a timely manner as we all await the government’s decision on how we can emerge from the lockdown of both people and businesses. It’s in our lenders’ interests to do everything that we can to support borrowers through this period.”
Borrowers will “eventually” have to pay the interest on the three-month extensions, but it will accrue on loans for repayment after the pandemic.
Assetz Capital has also stated that it expects to keep paying “full, or close to full” interest rates over the coming months by dipping into its borrower cash retention sums. However, there will be an additional lender fee of 0.075 per cent, and an additional borrowers charge of 0.15 per cent to cover the added administrative cost to the platform.
Law added that the forbearance measures are just the beginning of a “much wider short-term plan that we are executing to protect investors and borrowers during these unprecedented times.”
Further updates are expected to be announced in the coming weeks.
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