Growth Street exits P2P lending space
Business lender Growth Street is closing its platform to retail investors as it is no longer considered viable.
The platform will now focus on institutional debt funding in order to enter the next phase of its business strategy.
Its P2P loanbook will be recalled from borrowers, and existing retail investors will be reimbursed in at least quarterly instalments. Any potential losses will be spread across the investor base.
Read more: Growth Street’s losses deepen amid company overhaul
The decision to exit the retail P2P marketplace came at the end of a 90-day liquidity event, which was announced by Growth Street in March.
At the time, chief operating officer Kim Goetzke said that the event was driven by the “unprecedented impact” that the coronavirus has had, adding that the event would end once normal market conditions are resumed.
“The market circumstances created by Covid-19 have caused an acceleration of our strategic intention to diversify our funding sources using institutional financing, and led to a re-evaluation of the viability of P2P as a future financing source, compelling us to exit the P2P marketplace,” said Goetzke.
“We have begun the process of negotiating additional sources of financing and are confident that the stability of institutional backing coupled with our ever-improving technology will enable Growth Street to continue to serve SMEs across the UK. It is our absolute intention to work during this period return as much of our P2P investors’ capital as quickly as we reasonably can.
“Since 2014 we have received incredible and enduring support from our P2P investors, and we want to take this opportunity to thank them for enabling Growth Street to support so many businesses across the UK.”
Over the past two years, Growth Street has boosted its equity funding, with two major rounds in 2019 adding more than £17m of institutional money to the business.
Read more: Growth Street set to outline strategy as liquidity event ends