Folk2Folk’s secondary market creates almost £3m in liquidity this year

Folk2Folk’s secondary market has created more than £2.9m in liquidity for its investors so far this year, the platform has revealed.

The peer-to-peer rural business lender said it has continued to see healthy new investment and reinvestment as well as high levels of liquidity via its secondary market.

Folk2Folk, which has remained open for small- and medium-sized enterprises (SMEs) and retail investors during the Covid-19 pandemic, said timeframes to sell loan investments via its secondary market vary from several hours to several months, depending upon the loan.

This follows the platform seeing a record uptake of secondary market loans purchased in June at approximately £805,000.

“Demand for Folk2Folk loan investments remains high and is driving the movement we see within our secondary market,” said Roy Warren (pictured), managing director of Folk2Folk.

“This is of great benefit to our investors and is driven by our cautious approach to risk, great track record and attractive interest rates.

“A contributing factor may also be the friendly, human nature of Folk2Folk which sees us demonstrate understanding to borrowers and investors alike.”

Despite the pandemic, the platform has been busy of late.

At the end of October, Folk2Folk completed its largest loan of 2020 after investors backed £7.5m of finance through the platform.

The lender facilitated more than £17.3m in loans to SMEs during March, April and May while the country was under its first lockdown.

Elsewhere, in August the Forest of Dean District Council became the second council to back Folk2Folk.

The platform has been preparing to lend under the coronavirus business interruption loan scheme (CBILS) by raising institutional funds since becoming accredited in July.

Last month, after not yet beginning to lend under CBILS, Folk2Folk expressed interest in participating in its successor scheme set to be introduced next year.