Secured P2P lenders holding up amid the crisis

Secured peer-to-peer lending platforms appear to be weathering the storm caused by the coronavirus pandemic.

In recent months, CapitalStackers revealed that it has repaid £1.4m to investors and Blend Network has paid over £2m to lenders.

Furthermore, CapitalRise reported a 37.5 per cent rise in loan volumes in the first five months of this year, compared to its total lending over its first 18 months of operation.

Proplend saw its loan enquiries double in June and CrowdProperty has seen record levels of direct applications for funding from developers, including from those which have had funding offers reneged upon by other lenders that have stopped lending.

And David Bradley-Ward, chief executive of Ablrate, told Peer2Peer Finance News that the asset-backed lending platform’s diversified loanbook has held up during the crisis.

“Interest-only or bullet property-secured lending from platforms that have typically had low- to near-zero defaulted loans has held up the best during the pandemic in terms of lending volumes,” said Neil Faulkner, managing director of P2P research firm 4th Way.

“Almost all platforms that are currently approving P2P loans are doing less business, however.

“The combination of reasons is tightened lending criteria and higher borrowing rates, the need to help existing lenders who are worried during the pandemic to exit their loans early by selling their loans to other investors, and cheaper alternatives for borrowers provided by government-supported schemes, such as the coronavirus business interruption loan scheme.”

Read more: Are P2P lenders losing business from the emergency loan schemes?