HNW Lending increased its profits in the year to 31 March 2021, performing well during Covid after tightening its lending criteria prior to the pandemic and now has “quite a few big loans in the pipeline.”
According to filings on Companies House, in the 12 months up to 31 March 2021, the asset-backed peer-to-peer lending platform achieved a profit account of £89,924, up from £51,521 during the same period the year before.
Ben Shaw, chief executive of HNW Lending, said the platform became more selective in who it was lending to around six to nine months prior to the pandemic. He added that he has seen a reduction in loans going into arrears and the platform did not suffer from a “huge stampede” of lender withdrawals.
Shaw said there was a “flood of loans” that were sold on the secondary market, while about 10 per cent of people opted to leave the auto invest product.
He said the loanbook remains a similar size as pre-Covid and is of better quality than when the platform first launched, with “quite a few big loans in the pipeline.”
“It’s not like I saw Covid will happen,” said White.
“We realised we had a shortage of capital to lend and lots of companies coming our way so we tightened our lending and could be more selective in who we lend to. We had the opportunity to be more conservative in our lending and that served us very well.
“And I don’t think all platforms have been like that and some have suffered as a result of Covid as it’s very difficult to enforce against borrowers not repaying. We had a very small number of loans affected by that. Other lenders have real problems in that sphere.”
Shaw said that HNW Lending saw a lot of borrowers extend rather than repay their loans, and as a result the level of new loans is not as high as before Covid.
“We noticed a reduction in loans going into arrears,” he added. “Our loanbook is now of better quality over the last 18 months, and two years than when we first started, we’ve learned to weed out some of the problem borrowers and not lend to them in the first place.
“We’re not looking to change our policy. At the moment we have quite a few big loans in the pipeline and have seen an uptick in the slightly more unusual collateral loans, we’ve seen a number of car loans including £1m plus. We want to continue having loans that perform and pay capital interest to lenders.”