LendingCrowd pauses new retail deposits and signups
LendingCrowd has paused new retail deposits and registrations on the platform as it focuses on lending under the coronavirus business interruption loan scheme (CBILS).
The peer-to-peer lending platform has only been conducting CBILS lending, which can be funded by institutional investors only.
LendingCrowd said it expects this to continue for the foreseeable future, so it is protecting its retail investors by temporarily pausing new retail deposits and signups, because cash held in its accounts does not earn interest until it is used to fund loans.
The platform said the decision was made in line with guidance from the City regulator in preventing cash balances accumulating in accounts without earning interest. It will be reviewed on a regular basis as market conditions change.
In the meantime, lenders can fill out a form on the site with their contact details so the platform can contact them when ready to lend again.
Currently, the only loans available for individual lenders to purchase are on the platform’s secondary market but with buying loans dependent on others selling and a low level of loans available, loan diversification is difficult.
Read more: Four P2P lenders named among fastest growing tech firms
“We’re just being responsible and doing the right thing by retail investors,” said a spokesperson from LendingCrowd.
“Because all of our lending is under CBILS and we have no new retail loans coming to market, we have paused new account signups and any new retail deposits, just so people don’t start adding money to their account that can’t be invested in new lending.
“We’re continuing with CBILS at the moment and will assess the retail lending environment and market conditions going into January and February.”
The spokesperson said with the enormous amount of work LendingCrowd undertook to become accredited for CBILS, the platform wants to participate in its successor scheme next year.
“That’s definitely what we’re planning for,” the spokesperson said.
“The government has been clear CBILS won’t continue in its current form, the scheme will change.
“We don’t know what the exact changes will be, but we feel it’ll definitely be something that provides support that businesses need, and I think we’re in good position to help get that much needed funding out there to small businesses at this time.”
In September, the platform paused retail lending temporarily when it began offering CBILS loans two months after its accreditation.
Then last month, LendingCrowd announced that retail investors will not be able to fund new loans on its platform for the foreseeable future.