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The Assetz Capital platform is no longer open to investment from individual investors. No new investments into peer-to-peer loans are possible and, as a result, no new funds should be deposited. The existing loan book relating to the Retail platform is now in run-off and this will, over time, deliver the return of capital to investors. Full information can be found here . Existing Retail lenders can still log in, view information regarding their account and loan holdings and operate their account in accordance with the information regarding the run-off provided on the link above. Please see this important message regarding the currency of the information on the pages on this website.

Is P2P lending joining the mainstream?

Is P2P lending joining the mainstream?

No-one can deny the rapid growth of the P2P sector in recent years. It would be logical to assume that at the current rate, it won’t be long until P2P is up there as a universally recognised and common way for businesses to acquire the funds they need to grow.

To facilitate that, it’s important for the sector to understand the value and importance of retail money, and not just institutional interest. Assetz Capital is savvy to this, and knows that the everyday investor plays a symbiotic role alongside financial institutions in the efficient, ongoing successful function of peer-to-peer lending.

Over the course of the past three years, Assetz Capital:

  • Has lent more than £80 million to credit worthy businesses,
  • Investors have accrued a total gross interest of £7.3 million, with rapid growth year on year.

In my opinion, this is a drop in the ocean of Global finance so far and I look forward to reading this blog back in a year’s time.

 

P2P lending is becoming mainstream

Here at Assetz Capital, we believe that P2P lending is preparing to become mainstream – the recent success and dramatic uptake of investment opportunities through the new Quick Access Account evidences this:

Within a few hours of our ‘soft’ launch, the allocated £1 million pot had been filled.
Two weeks later we extended it to £1.5 million – this was full within just four hours.
Each time we extend the account it fills instantly.

Everyday investors have been seeking a location which offers the potential for a higher, risk-adjusted return on their money for some time now, while being able to access it without having to lock it away for one, three or five years. We’ve found a way to do it, and the Quick Access Account will continue to prove popular with investors, as we develop and grow its investment allocation.

 

Increasing awareness of the P2P sector

There are a number of factors that can serve to further increase awareness of the P2P lending sector:

  • Further partnerships, such as the one announced with RBS earlier this year, serve to increase awareness of the sector.
  • The media plays a key role in ensuring that P2P lending gets recognised by the wider public.
  • Government and regulatory announcements are important, and show P2P lending as a valid and approved investment path. There are more to come, particularly as the FCA further defines regulation, and the government fine tunes the Innovative Finance ISA.

 

What effect will the Innovative Finance ISA have on P2P becoming ‘mainstream’?

The ISA is the most popular investment vehicle – putting pensions to one side for the moment – for UK investors, with some £60bn invested.

The arrival of the ISA some 15 years ago has changed the way everyday investors consider their financial future. A great tax-free wrapper which has been tweaked over the years, but never really developed significantly. Until now. The arrival of the third ISA solution in April 2016 signifies the true arrival of peer-to-peer lending.

The government has on numerous occasions supported and therefore recognised the value and impact peer-to-peer is having on the UK economy, and has thus pressed the importance of it being included in a tax-free mechanism.

However, while it’s not “risk free” like cash ISAs, peer-to-peer investment (learn more about understanding peer-to-peer risk) doesn’t fluctuate as much and isn’t as volatile as stocks and shares, therefore the third Innovative Finance ISA will be born.

It will focus on peer-to-peer loans for the moment. The finer detail is still being worked out, but from April 2016 investors will have the option of applying their peer-to-peer investments within the ISAs tax-free wrapper.

If just a fraction of active ISA investors gets to understand about peer-to-peer, we’ll certainly be a significant step closer to being considered ‘mainstream’.

 

 As with most forms of investment, peer-to-peer lending carries a degree of risk to your capital; in this case if the borrower is unable to repay their loan. At Assetz Capital, we seek to reduce this risk to our investors by taking asset security on every loan.

- December 4, 2015

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