Growth Street’s losses deepen amid company overhaul

Growth Street saw its losses grow in 2019 during a tumultuous year that saw a restructure, layoffs and the departure of its founder Greg Carter.

The peer-to-peer business lender reported a profit and loss reserve of £4.68m in the year ended 31 December 2019, according to its annual accounts filed with Companies House, up from £2.81m the previous year.

This suggests a loss of £1.86m in the year ended 31 December 2019,  compared to a loss of around £1m the previous year.

Kim Goetzke, chief operating officer at Growth Street, highlighted in the report that current and future sources of funding would be enough to support net current liabilities of £2.96m.

The report said the coronavirus pandemic is causing uncertainty, which Growth Street is monitoring with tools such as managing liquidity.

It also said that there may be changes in demand for its services as an alternative source of funding for businesses during the crisis.

Growth Street initiated a liquidity event in March 2020, stopping investors from accessing invested funds.

The business lender said this was due to a larger than usual volume of money not being reinvested amid coronavirus uncertainty, making it harder to fund withdrawal requests.

The stoppage, which can last for up to 90 days, means investor money is automatically reinvested, outstanding lend orders cannot be cancelled and users can only withdraw funds from their holding account.

Growth Street said this was not due to any issues with its loanbook but said it has been monitoring its portfolio.

It is understood that this may mean calling in some loans early.

Growth Street announced a restructure and layoffs in November 2019 which also included the departure of its founder and chief executive Greg Carter.

It has also made efforts to reduce risks by reducing its loan size from £2m to £1m and moving to a digital-only origination model.

Read more: Growth Street reduces loan sizes