Lending Works is leaving the peer-to-peer lending sector after nearly eight years.
The P2P consumer lending platform, which has lent £240.3m to date, will no longer be accepting any new money from retail investors, and those who already have money invested in loans will continue to receive repayments until their balance is fully repaid.
Lending Works has cited market dynamics, the pandemic as well as waning retail interest and will now focus on institutional funding lines and embedded finance.
Here Peer2Peer Finance News summarises significant milestones and events from its history.
Lending Works was founded by chief executive Nick Harding and a team of experts from the banking, accountancy and finance industries in January 2014 after completing a pre-launch funding round of £3.5m from venture capital and angel investors.
The platform was the first to incorporate an insurance element. It launched with the ‘Lending Works Shield’, which includes a reserve fund, borrower default insurance and fraud and cyber-crime insurance. In September 2014, the P2P lender joined the industry’s trade body the Peer-to-Peer Finance Association (P2PFA).
Lending Works achieved a stellar 2015 and announced in June it was celebrating a record first half of the year after lending over £10m to date with over half of this deployed in the first six months.
Furthermore, the number of new lenders joining the platform since January was greater than the total figure that joined in 2014.
Then in December, the platform was authorised as an ISA manager by HMRC and set out its plans to launch an Innovative Finance ISA (IFISA) the following year.
The IFISA launch came in February 2017 when Lending Works became the first P2PFA member to introduce the tax-wrapper.
In April, Lending Works hit the £50m funding milestone and also said that it has reached the 10,000 client landmark.
The platform raised its minimum investments from £10 to £100 to make it easier to cope with the level of transactions and updated its two flagship investment products with new features, renaming its three-year account the flexible account and five-year account the growth account.
It also unveiled plans to reduce interest rates and put more money into its Shield contingency fund to make the platform more resilient.
Lending Works was a founding member of the 36H Group when it launched in January last year following the disbanding of the P2PFA.
During the pandemic Lending Works stopped all new retail investor signups, all investments from new or existing customers, and all new loan issuances from April 2020 to January 2021 after extending this normalisation period of 90 days twice.
In October 2020, the platform introduced a period of negative interest rates, so that it could channel more money into its provision fund to mitigate against anticipated higher credit losses.
In July, the P2P lender was acquired by alternative investment manager Intriva Capital and said following this it planned to double staff and target £1bn in lending.
In April, the platform said it would continue implementing negative interest rates, but at a reduced amount, on certain cohorts while starting to pay interest on other loans. Then in October the P2P lender revealed that its expected annual losses and returns have remained stable while negative rates are still required in two of its loan cohorts.
In September, Lending Works hired eight new staff members as it looked forward to growing its loan volumes before announcing its P2P exit on 15 December 2021.