Assetz Capital has been incredibly busy since becoming the second peer-to-peer lender to be approved for the coronavirus business interruption loan scheme (CBILS) in May.
Here Peer2Peer Finance News sorts through what’s been going on at the platform in recent months.
Chief executive Stuart Law (pictured), chief executive of Assetz Capital, has previously said he predicted the economic downturn after chatting to a friend who owns a business in China early in the year, and prepared his firm for the impact as a result.
Assetz paused lending temporarily, brought its average loan-to-values down to below 65 per cent, prioritised investor protection and worked with borrowers offering forbearance.
The return of retail investors
The lender closed its platform to new retail money at the start of the pandemic in March because of uncertainty around what was happening.
In June, Assetz said it is readying to reopen its platform to new retail investment, starting with its manual lending account this month.
Despite Funding Circle closing to retail investors to focus on delivering CBILS, Assetz announced soon after its accreditation that it would remain open to retail investors alongside delivering funds through the scheme.
Cutting interest rates
At the start of June, Assetz Capital cut target interest rates on its three auto-invest accounts, to reflect the economic challenges caused by Covid-19.
The published target rate on its quick access account was reduced to 3.75 per cent, its 30-day access account cut to four per cent and its 90-day access account reduced to 4.1 per cent.
On 1 May, Assetz Capital introduced a temporary 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.
Assetz had hoped it would only remain in place for three months but in June announced the fee would be extended and will be reduced when the platform scales up from lending under CBILS.
The Covid-19 crisis has caused issues in the secondary markets for many platforms as retail investors panicked and rushed to withdraw funds.
In May Assetz Capital said withdrawal requests from its autoinvest, so-called access accounts returned to normal levels and investor trading on its manual lending account secondary market was also returning to typical levels.
Road to recovery
Assetz Capital revealed at the start of July that it has seen “minimal” new loan defaults so far this year, while investor returns are expected to meet their targets.
In a monthly update to lenders, Law said that over the course of June, the platform saw a “further and final substantial catch up in borrower payments that had become overdue as a result of Covid-19.”
The lender then exceeded its £500,000 minimum Seedrs fundraising target in less than a week and now aims to secure matched investment from the scheme to double this to £1m.
Assetz said it will use the proceeds from the fund for the legal and structuring work needed to deliver CBILS and to provide some skin in the game for lending required by CBILS, and also to grow the team and for working capital.