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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.

P2P Lending is Evolving: The Strongest will Succeed

However, along with the high-profile success, including George Osborne’s announcement to allow P2P investments into the NISA wrapper, we’ve also seen failures, which have been widely reported.

P2P Lending Risks

There’s no hiding it: a small number of platforms have failed in the past 18 months. This makes for easy headlines, but it shouldn’t come as a surprise to anyone.

Recent research by Bis.gov claimed that half of all new businesses fail within their first three years.
With the glut of new platforms, we can expect a double-digit number of platforms to struggle and potentially cease trading in the next few years.

Also, according to AltFi news, Be The Lender shut its doors last week, following Yes-Secure, which stopped trading last year.

Although it’s never nice to see a fellow business fail, we’re approaching a crucial time in the P2P and crowdfunding sector’s development.

What does this mean for the industry?

Peer-to-peer platform failures may initially seem alarming, but there are two reasons why they shouldn’t damage your faith in the industry as a whole:

  1. Good platforms were built with safeguards in place to ensure lenders are protected in the event of a platform failure. When Yes-Secure stopped trading for example, it refunded lenders, and FCA regulation makes these protections even stronger.
  2. The market has boomed in the past four years with, according to Crowdsurfer, 141 businesses active in the industry, which isn’t sustainable. As the market consolidates and evolves some platforms will find the market isn’t big enough and sell up to a competitor or quietly stop trading. It’s a natural business cycle which will make the sector stronger in the long run.

The main thing for all of these inevitable scenarios is that lenders and borrowers are supported fully. Faith shouldn’t be lost in the wider crowdfunding market.

Assetz Capital’s Future

At Assetz Capital, we understand how important security and support is to our lenders and borrowers which is why all our lender protections are well documented on our site.

Having grown exponentially in the first year, we’re continuing to expand steadily. Our plans for the next phase of our development mean that 2014 and 2015 will be extremely exciting for anyone connected, borrower or lender, to the business.

We lent £10m in 2013 and we’ve already lent £30m to date in 2014. Expect that curve to take a more vertical look in the coming months. Assetz Capital will certainly be one of the big players.

Stuart Law

- September 19, 2014

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