Funding Circle has bolstered its collection and recoveries teams and agreed payment plans with delinquent borrowers, as it looks to mitigate the risks of the coronavirus pandemic on investor portfolios.
The peer-to-peer lending giant has revealed in an update from its global chief risk officer Jerome Le Luel that there has been an increase in requests for payment plans from otherwise healthy businesses.
He said Funding Circle has increased capacity in its collections and recoveries team by re-deploying and hiring new staff, in order to answer calls, set up payment plans and provide support to businesses in difficulty.
The majority of businesses that have been paying late over the past few months are now on a short-term payment plan which will give them time to get back on their feet, generate revenue and subsequently repay their loans, Le Luel said.
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He said that in a typical downturn you would expect higher-risk businesses to be more impacted when economic conditions change, but the blanket restrictions placed on the UK economy have instead seen a large proportion of UK small- and medium-sized enterprises finding themselves suddenly unable to trade.
“While no one knows exactly how the coming months will play out, a short, sharp recession followed by a quick recovery as the economy reopens is likely to see many of these businesses get back on their feet and start repaying their loans,” he said.
Funding Circle became the first accredited P2P lender under the coronavirus business interruption loan scheme in April and is currently focusing its lending in that area.