Crowd2Fund has temporarily paused listing new investment opportunities and has frozen activity on its secondary market.
The peer-to-peer business lender said this will protect investors and prepare the platform for the post-crisis economic recovery.
All other platform features will work as normal, including investors having access to their ‘wallet’ – the secure client money account where funds are held before they are deployed on investments.
“We take the due diligence and credit assessment of the businesses listed on Crowd2Fund with utmost seriousness, and these assessments also include market conditions,” the firm said in a blog post on its website.
“We have also been reviewing our credit policy on an ongoing basis throughout this market disruption. Given the nation-wide lockdown — and the significant reduction of UK economic activity — we believe it would be unfair to list new businesses while we aren’t fully aware of the risk.”
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Crowd2Fund said that it is aiming to have its secondary market – called the Exchange – working again as soon as the crisis is resolved. It will be refunding any loans that have recently been listed on the platform.
Meanwhile, repayments will continue to be repaid and processed as per usual and Crowd2Fund will still be managing ISA transfers in and out of the system.
Crowd2Fund also said that it is reinforcing its credit and due diligence process. This includes reviewing every loan on the platform and giving each one a risk mitigation plan, to help it work with its borrowers to ensure repayments continue smoothly.
The platform said its contingency plan and process seems to be working in helping businesses access the emergency funding or converting to a revenue loan from a fixed term loan.
In terms of what the changes mean for the business, Crowd2Fund said it will continue to generate revenue from the repayments that are collected.
“We have significant cash reserves to see us through this period, and are operating the platform effectively — and remotely— with significantly reduced costs,” Crowd2Fund added.