New peer-to-peer lender launches with largest loan raised in UK

Investment group Assetz has launched Assetz Capital, a new peer-to-peer lender delivering much needed loans to the UK economy. The new lender has just completed fundraising on its first property development loan with a value of £1.5 million, which is the largest peer-to-peer loan ever raised in the UK.

Assetz Capital raises loans from an established community of over 60,000 individual high net worth investors, allowing businesses to borrow cash through an online marketplace, linking investors directly with credit worthy borrowers. Lenders currently have an estimated lending capacity of up to £96m available through the Assetz Capital platform and this expected to grow substantially over the remainder of the year.

The company has launched with two products: finance for small and medium sized trading companies with tangible security; and property development funding at 50-60% loan to value for residential developers throughout the UK.

Several loans have been raised so far, the most significant being a £1.5 million loan to fund a property development project in Nottingham, with over 40 investors seeing a 10% return on their cash. In addition, this loan had what is thought to be the largest peer to peer lending bid to date of £200k. Further loans include a £180,000 trade finance loan for a small business importing Christmas stock for garden centres and supermarkets, which delivered in excess of a 10% return to investors.

A thorough credit report and risk profile is provided on each potential borrower, helping lenders judge risk.

The experienced team behind Assetz Capital includes Assetz Chief Executive Stuart Law, HBOS whistleblower Paul Moore as non-executive Chairman, accountant and business lending banker Andrew Holgate as Managing Director of Assetz SME Capital and property banker David Penston as Managing Director of Assetz Development Capital. Grant Thornton is the trustee for the lenders’ cash reserves and also acts as custodian for their loan security.

Stuart Law commented:

“Many traditional banks are now a spent force, throttling new lending whilst slowly recapitalising following previous losses, which continues to hold back growth in the UK economy. Meanwhile, investors are actively seeking new ways to deploy their cash that will deliver a decent income while bonds, money markets and savings accounts pay historically low rates.

“Peer-to-peer lending is now a well established funding avenue and the appetite from borrowers and investors continues to grow, encouraged by the prospect of regulation in April 2014. Our business model is to go back to the roots of banking, to have a fundamental policy of ‘know your customer’ and to employ a professional and experienced banking team.”

The Government is so encouraged by the growth of peer to peer lending that it has pledged £100m of government funding to peer-to-peer lenders and other alternative finance suppliers in a bid to help small businesses struggling to obtain credit via high-street banks. Assetz estimates that peer-to-peer finance will account for more than £500m of loans to individuals and small businesses this year, growing to £1bn of lending in 2014.

A survey of the existing Assetz database of 60,000 registered private investors in December 2012 found that 46% of investors would be interested in peer-to-peer lending opportunities.

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