Innovation in 2020
Peer-to-peer is known for its innovation and perhaps this was more important than ever this year, to adapt to the ongoing Covid-19 crisis.
Here are a few examples of platforms coming up with new ideas or entering new areas during 2020.
Participating in government loan schemes
Four platforms became accredited to offer the coronavirus business interruption loan scheme (CBILS) this year: Funding Circle –which was also approved to offer bounce back loans –, Assetz Capital, LendingCrowd and Folk2Folk.
In November, Funding Circle’s UK managing director Lisa Jacobs said the platform had already lent more than £800m to UK businesses under CBILS, while Assetz Capital revealed it was working through a £300m pipeline of CBILS applications.
Acquisitions
This year saw not one but two high-profile acquisitions in this space. Lending Works was sold to alternative investment manager Intriva Capital in July, and Metro Bank completed its acquisition of RateSetter in September.
Elsewhere, CapitalStackers and LandlordInvest have both partnered with banks during 2020 to complete deals.
Launching apps
In July, Rebuildingsociety launched an app to allow its investors to manage their portfolio, access funds, withdraw money, purchase new loans and sell loans on the secondary market.
Meanwhile, during the same month, Crowd with Us launched an app to update lenders on their property investments.
Second charge CBILS lending
In October, LandlordInvest chief Filip Karadaghi predicted a small profit this year after conducting second charge lending to developers that have received CBILS loans.
He said the platform was making money from bridging the gap between CBILS and the additional release of equity.
Ablrate launches ASMX
Ablrate launched its new secondary market, powered by blockchain-backed exchange ASMX, in October.
The asset-backed P2P lender said ASMX, which has ambitions to become a global market for trading private debt, will boost liquidity for investors.
Partnering with councils
Abundance Investment has partnered with West Berkshire Council twice this year, in July and August, to finance local green infrastructure projects.
Furthermore, in August the Forest of Dean District Council became the latest institutional investor to commit to back P2P loans through Folk2Folk.
SBILS
In September, JustUs launched its Small Business Interruption Loan Service (SBILS) to provide funding for businesses that missed out on government loan schemes.
Prospective borrowers can download and apply for the scheme on the Moneybrain app, then list their business and raise money through crowdfunding, which the company starts repaying a year later.
Diversification
After being hit by Covid-19 and low interest government lending schemes that are difficult to compete with, Rebuildingsociety pivoted and approved more appointed representatives.
Furthermore, Money&Co adapted to the environment and moved to more niche areas of music loans and litigation finance.
