Peer-to-peer lending industry stakeholders have called for a borrower register to prevent people from using the same personal guarantee with multiple lenders.
Speaking at the P2P Investing Summit today (29 April), a virtual event hosted by Peer2Peer Finance News and AngelNews, Adrian Innes, chief revenue officer at business finance platform Finpoint, said he would “really like to see” a personal guarantee register in the UK.
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“Nothing stops someone taking out another loan with a personal guarantee,” he said.
“A borrower could have multiple funders and a personal guarantee, enter into a default position and then have nothing there because of the additional funders.
“Legal funders on Companies House can do due diligence but they don’t know if the borrower has borrowed more money.
“I’d like to see a generic personal guarantee funder list.”
Both Mike Carter, head of platform lending at industry trade body 36H Group, and John Cronin, an analyst at brokerage Goodbody, agreed with the idea.
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“I think it’s very sensible,” said Carter.
“There are a number of situations that could be better improved in terms of disclosure and risk management.”
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“I echo that,” said Cronin.
“In the late noughties there was a huge amount of personal guarantees on property developers and a register could be super helpful more broadly and in a P2P context.”