LendingCrowd Loan Market Remains Closed
LendingCrowd said its loan market will remain closed to lenders, but will be reviewed on a monthly basis.
In November, the peer-to-peer lending platform said retail investors would not be able to fund new loans on its platform for the foreseeable future after focusing on funneling funds. institutions through the Coronavirus Business Interruption Loan (CBILS) program, which she obtained. accreditation for July 2020.
Then, in December, LendingCrowd suspended new retail deposits and registrations on the platform as it focused on CBILS loans and in January, suspended trading in its secondary loan market due to prevailing economic conditions. and the low number of loans on the platform.
LendingCrowd said that commercial borrowers on its platform continue to make repayments, which will accumulate in lenders’ cash accounts, but it will not be possible to reinvest those repayments as long as the secondary loan market continues. will be suspended.
The platform said at its last credit committee meeting that it had been decided that its lending market would remain closed to individual lenders.
LendingCrowd said it will continue to review this position on a monthly basis and communicate updates to its lenders.
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The platform said that since cash held in platform accounts does not earn interest until it is used to fund loans, lenders should consider transferring their money to an interest-bearing account with another financial institution at this time.
LendingCrowd has stated that there is a fee of 1% of the principal withdrawn from the Growth Account, Growth ISA, Income Account and Income ISA, which is only paid when a withdrawal is done, not when a loan is sold.
The platform stressed that its goal always remains to take a cautious approach to achieve fair results for lenders.
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“We want to prevent lenders from being overly exposed to individual loans due to the lack of loan opportunities available in our secondary loan market,” LendingCrowd said in a blog post on its website.
“Our decision to temporarily halt trading in our secondary loan market is in line with the Financial Conduct Authority’s principle of ‘treating clients fairly’.
“We continue to charge these fees as they relate directly to the services incurred by lenders in collecting and allocating repayments from borrowers.
“Since the outbreak of the Covid-19 pandemic, the entire LendingCrowd team has focused on doing the right thing and supporting our lenders and borrowers. “