Assetz Capital is readying to reopen its platform to new retail investment, starting with its manual lending account next month.
The peer-to-peer lender closed its platform to new retail lending at the start of the pandemic in March because of uncertainty around what was happening.
The platform also decided that if it continued lending new money from its access accounts – its auto-invest products – this would have obstructed withdrawal requests, which spiked at the start of the pandemic.
Chief executive Stuart Law (pictured) told Peer2Peer Finance News that the platform is likely to restart lending in the manual lending product in July and will subsequently restart lending in its access accounts when liquidity returns. Law said the loans will have lower loan-to-values and higher interest rates.
Read more: Assetz to extend lender fee
“We always knew when the next cycle came our retail lending would restart in the manual lending account,” he said.
“We’re going to put the first few loans to investors in the next couple of weeks. We’ve taken time to assess where we’re at, update our guidelines and work on our coronavirus business interruption loan scheme (CBILS) lending.
“And we’re now ready to offer new loans to retail investors under the new guidelines in our manual loans, but not under CBILS because that requires institutional funding.”
On 22 May, Assetz Capital said investor trading on its manual lending account secondary market was returning to typical levels, after a spike in sales at the start of the pandemic.
The lender’s secondary market allows investors in its manual lending product to apply a discount to their loan parts if they are keen to sell.
The platform has been working to introduce a similar system for the access account, whereby loans can be sold at a discount, to improve liquidity there.
Law said he will have more details on this over the coming few weeks.
“There’s quite a lot of activity in the manual lending account, we saw that account clear itself quite quickly,” Law said.
“The discounts on our manual lending account facilities have been around for some time, we didn’t historically think we’d would need it within our access account too, because we didn’t think the next recession would be so big.
“As soon as you release a discounting facility, people have the choice to offer prices which appeals to the buyer and trade happens again. We’re seeing our investors talking about it now but we’re not expecting big discounts.
“We just want to get our investors back to sensible liquidity again. When that’s happening, I’d expect to go back to lending in our access accounts.”
Despite not lending for several months during the pandemic, he said Assetz has not lost any money.
Law put this down to his team having had experience of going through previous economic cycles.
“The people running the business have seen it all before,” he said.
“Within 14 days we had a very precise plan and were already executing it. That’s the difference between the more experienced businesses and those that have not previously been through cycles.”