Assetz Capital chief Stuart Law has said that his platform is not expanding its recoveries team in anticipation of a wave of defaults from the coronavirus business interruption loan scheme (CBILS).
The peer-to-peer lending platform was accredited for CBILS in May – a government-backed lending scheme to support small-to medium-sized businesses struggling during the pandemic. 80 per cent of the value of each loan is underwritten by the government, leaving the lender exposed to just 20 per cent of the loan’s value.
Law (pictured) highlighted that CBILS is very different to the bounce back loan scheme (BBLS) – a 100 per cent government-backed loan scheme designed to get money out quickly to microbusinesses, which Assetz is not participating in.
“I don’t think CBILS is anyway comparable to BBLS and I think the thinking is different particularly for our secured lending,” Law said.
“We’re not expecting a dramatic increase in our recoveries team in the slightest, but I can definitely see that will be essential for BBLS without a doubt.
“It was a necessary result of the ease of which BBLS loans could be applied for, the application process wasn’t watertight, but if it had been BBLS loans would not have reached the businesses it should have reached.”
Another P2P lender, LendingCrowd, was accredited for CBILS in July. A spokesperson told Peer2Peer Finance News that the platform has been very prudent in its risk mitigation.
“We were very prudent and adopted some principles of credit valuations, ensuring deals were affordable for the businesses,” the spokesperson said.
“Our first CBILS loan was in September so our first repayments won’t be until September, October and in the meantime we’ll be keeping a close eye on the lenders that offered CBILS first to see the trends.”
Read more: The alternative lenders accredited for CBILS