Assetz Capital will temporarily extend its lender fee and will reduce it when the platform scales up from lending coronavirus business interruption loan scheme (CBILS) loans.
On 1 May 2020, Assetz Capital introduced a fee of 0.9 per cent per annum for all of its investors after the platform received a “substantial drop” in its income because of Covid-19.
The fee, which is equivalent of 0.075 per cent per month, is calculated throughout the month based on investors’ funds under management and is taken as a reduction of the actual interest received.
When announced, Assetz said that the fee, which is taken out from the first of each month, would be in place for at least the next three months.
After being in place for two months, Stuart Law (pictured), chief executive of Assetz, told Peer2Peer Finance News that the fee will remain for the time being. He said Assetz will gradually scale it down, reducing when the platform scales up as a result of CBILS lending, with the two inversely related.
“For the time being there’s this modest fee and it’s important to note its deducted before calculation in the access account rates so a 0.075 per cent a month fee is taken from the interest investors earn within access accounts,” said Law.
“And our access account target rates factor in the fee.
“We won’t be removing the fee after three months because we see more effect from Covid-19, but we will remove it after we can scale up lending.
“We still see the fee as temporary and will withdraw it in line with our scale of lending under CBILS. When the lending gets big, we will reduce it, the two are inversely connected. This about getting our new lending up to substantial volumes and then we can look at the lender fee.
“I think charging a fee for half a year and seven years of having no fee is not a bad deal for people.
“We’re working to restarting lending as much as before but maybe even more with lenders investing into our funding round, not everyone’s that fortunate.”
Assetz Capital has cut target interest rates on its three auto-invest accounts, to reflect the economic challenges caused by the pandemic. This is inclusive of the lender fee.