Growth Street is winding down as it has failed to secure the funding needed to sustain the business, blaming challenging economic conditions amid the pandemic.
The peer-to-peer business lender said it will enter into a solvent wind-down once its so-called resolution event is complete.
The resolution event, announced last month, meant that its current loanbook would be recalled from borrowers and existing P2P investors were to be reimbursed for their investments in at least quarterly instalments.
At the time of last month’s announcement, Growth Street also said that it would be closing its platform to retail investors to focus on institutional funding.
However, Kim Goetzke, chief operating officer at Growth Street, said that this had not been possible as the onset of Covid-19 had presented numerous challenges for the business.
“We assessed all of our realistic options, including having discussions with our shareholders and other institutions to find a solution that would enable us to build an economically viable business going forward whilst allowing us to offer a market leading proposition for our customers,” Goetzke added.
“Unfortunately, it wasn’t possible in the current environment to put together the package of equity investment and institutional funding necessary to continue the business.”
Growth Street’s entire focus will now be on supporting its borrowers to find alternative sources of finance while ensuring that funds are returned to its investors. During the wind-down, Growth Street will retain a core team to ensure it proceeds effectively. Expected timeframes and quantity of repayments to investors will be unaffected by the wind-down.
In March, Growth Street declared a “liquidity event”, stopping P2P investors from accessing invested funds.
It said this was due to a larger than usual volume of money not being reinvested amid coronavirus uncertainty, making it harder to fund withdrawal requests.