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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.

The Insider-track on Assetz Capital

The Insider-track on Assetz Capital

Crowdfund InsiderThis week we shared our insight and vision of the business and market with CrowdfundInsider, a global news site covering alternative finance solutions such as crowdfunding and peer-to-peer lending.

Here is a rundown of what I spoke to CrowdfundInsider about:

Congratulations on your two year anniversary - can you give us a little background on Assetz Capital?

Thank you very much, I must say it feels like a lot longer than two years!

Our original business Assetz Property is still thriving as a leading buy to let property agency, but was definitely why we decided to start Assetz Capital: back in 2012 there was a lack of funding from the banks for SMEs and property developers, which drove us to begin our own peer-to-peer lending platform.

The two businesses are separate, but linked by the fact that they both offer income producing investments with security of capital. Keep your eyes open for a news regarding crowdfunded buy to let shortly. 

We wanted to provide a better funding service for businesses while delivering a healthy return for investors. Our vast experience in investment, as well as using property as security, meant that we were in the perfect position to set up a platform that we believe holds the strongest secured business lending proposition in the sector.

What challenges and successes have you experienced since launch in 2013?

We started the business in 2012 and launched lending in April 2013, in which time we have achieved several successes to be proud of with each announcement superseding the last.

In the past few months, we've announced plans to launch into invoice finance, thanks to an international partnership, a referral deal with the Royal Bank of Scotland (RBS), and the first £150m of institutional investment. They all have to work together to make this model work and that is our current challenge.

Our inspiration is very basic - we want to make the process of sourcing good finance for businesses better and easier, while creating healthy returns for investors who were income starved during the recession. 

As with any disruptive business model, it takes time to gain traction. We've had so much support from government and experienced, influential business owners and entrepreneurs that we know peer-to-peer lending is very much here to stay; it's just a case of all platforms increasing the awareness of the benefits for businesses and investors.

In the coming months, we are expecting to see several other individual deals and announcements that will assist the growth and strength of Assetz Capital.

Where does Assetz Capital fill a need in the peer-to-peer lending market?

Assetz Capital is one of the biggest peer-to-peer lending platforms in the UK. The niche we operate in is secured business lending and our deep credit experience as a team.

We have highly experienced and professional credit experts across the business that have seen and done all of this over many years of professional lending but the Assetz Capital business offers them an efficient environment to operate within. Some peer-to-peer lenders are FinTech with credit bolted on but we feel that we are deep credit with FinTech bolted on.

We don’t particularly focus on any one sector as we lend to SMEs, house builders and other types of small businesses. Instead, we support the business sector as a whole, offering them simple term loans, invoice finance, trade finance and mortgages.

How does Assetz maintain a competitive edge?

Our business operates differently to most banks and to other peer-to-peer lenders.

Due to handling an average loan size of £400k or so, we visit potential borrowers to make credit decisions based upon our deep credit experience. We also personally review the borrower and their business. This process often produces a different outcome to a bank’s as we can lend where they cannot, and sometimes we are faster which is more important than rate for the borrower.

Generally speaking, the higher the level of return for investors, the more risk is involved; however, our underwriting team take security over assets so that if there was a default, the assets taken as security should cover some or all of the value of the loan. 

With approaching £80M in loans funded, by 8,500 lenders and around 150 borrowers, where do you predict growth? 

As a business, we have always looked to the future of the sector and have a clear strategy in place – the £1 billion loan target has been chosen as a realistic aim we can strive for based upon funding lines available to us and our competitiveness in the market.

The wheels have already been set in motion through the deals we have agreed with RBS and others, but there are many other factors at play. For example, government initiatives that allow investors to allocate peer-to-peer loans within SIPPs and ISAs will have a huge, natural impact on our business.

On the other side of the coin, the Government’s support for the growth of alternative finance solutions for UK businesses and the reduced systemic risk of traditional financial services means we have the backing we need to grow quickly with proportionate regulation 

With ISA eligibility coming quickly down the line and the FCA regulatory body considering how better to regulate and monitor the surging market, where do you feel that they can add value to the sector?

We have always acted as if we were regulated, even before FCA regulation came in. Now that the FCA has and is continuing to develop, we feel that we are in a solid position when it comes to best practice. For us, being a better solution for investors and borrowers is about transparency and honesty, and the FCA has a similar view of the market, which is pleasing to see.

One area of this industry that still needs some clarity is the definition of defaults and losses, so lenders can better judge who to work with. By this I mean that there should be a standard benchmark of lending performance published by every platform, and that benchmark should be fair and accurate. Although there is still some way to go to properly develop this, people like AltFi have been assisting the process.

Peer-to-peer or marketplace lending will grow quickly in the next few years and to a scale that will challenge the banks, perhaps taking over some areas of the market that they wish to move back from following changes in bank regulation and capital requirements.

We have a big job to do as a sector and have a lot of responsibility to build long-term businesses that perform well in the next cycle.

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.

- June 18, 2015

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