Assetz Capital has delayed plans to restart lending through its access accounts due to an oversupply of uninvested cash.
The peer-to-peer business lender said it currently does not have the capacity for new investment as it had focused on getting money out to borrowers ahead of the closing of the coronavirus business interruption loan scheme (CBILS) in March.
“Whilst we had anticipated restarting retail loan origination in May, it is slightly behind schedule, which has contributed to a substantial growth in uninvested cash held in the accounts,” Assetz Capital said in a note to investors.
“The pace of retail origination is largely a result of the closure of the CBILS to new applicants after 31 March, which caused a surge in last-minute applications.
“We have needed to prioritise our efforts to process these applications before the deadline, to ensure that borrowers receive the financial support needed to keep moving during the pandemic.”
The platform said access accounts are now overfunded so any new money coming in will not be automatically invested and will not earn any interest.
Under new terms and conditions to manage liquidity in the accounts, Assetz Capital said it will return a proportion of cash to investors calculated on a pro-rata basis of their total holdings.
It will be returned to each investor’s respective cash account, where it will be automatically queued for reinvestment.
Assetz Capital said this return of cash doesn’t count as a loan sale but it will slightly reduce access account investments and any funds returned won’t earn interest.
“We are making every effort to speed up our retail loan origination and we now expect to see new loan flow in the coming weeks,” Assetz Capital said.