P2P administration costs rack up
Administrators are set to pocket more than £8m from defunct peer-to-peer lending platforms, research has found.
Analysis by Peer2Peer Finance News has shown the cost of recouping funds and unpicking the tangled loan books of platforms including Lendy, FundingSecure, MoneyThing and The House Crowd, all of which have sought extensions of their administration periods due to the time and work involved.
Collateral
P2P pawnbroker and property lender Collateral collapsed into administration in February 2018 and entered liquidation in April 2019. Analysis by its administrator, BDO, found that Collateral operated two loan books, one worth around £14.8m containing loans secured by a first charge over property assets valued at £22m, and a second book containing £1.67m of loans secured over pawnbroking assets worth in excess of £2.4m.
BDO has previously highlighted issues with valuations and matching investor funds to loans. Customers should have been emailed last year about what they can get back based on what has been realised so far. Costs for the administration and liquidation have surpassed £470,000 but this money has not been drawn yet.
Lendy
Property lending platform Lendy entered administration in 2019. It had more than £160m outstanding in its development finance and bridging loan book and at least £90m of those funds were in default at the time of its collapse. The latest update from its administrator RSM showed there were 12 live development finance loans with an outstanding value of £49.6m. There was £117m owed to investors when Lendy first entered administration and £34m has been recouped, with £16m repaid to investors. RSM already had a 36-month extension on the administration period to take it to the end of May 2023, but the company has said it will seek another extension. It has amassed £5.2m of costs so far, according to the January update.
FundingSecure
P2P pawnbroking platform FundingSecure collapsed in October 2019, following concerns about mounting loan defaults. Administrator CG&Co has recovered almost £43.8m from the platform’s £80m loan book, according to the latest update, with 51 loans still in default, worth £25m. However, only £24m has been withdrawn by investors since access was stopped in May 2021 due to an ongoing claim from a creditor. The administration was extended in 2020 for three years and is currently due to end in October 2023. Administrator fees have totalled £808,353.30 so far.
MoneyThing
P2P business lender MoneyThing went into administration in December 2020 as it could not afford to defend itself against future litigation from a borrower. At the time, it had 50 loans outstanding to 18 borrowers, with around £19m owed plus interest and costs. The administration period had been extended by a year in 2021 so was due to end in December 2022 but has since been prolonged by another two years. The total administration fees so far amount to £1,219,108.50.
The House Crowd
P2P property lender The House Crowd entered administration in February 2021, due to “ongoing financial issues.” Its administrator Quantuma said at the end of last year that realisations from the bridging and development loan book will take at least another six to 12 months due to the “incredibly complex” administration process, so no repayments are expected yet. It had previously extended the administration deadline to February 2023 but this has now been extended to 24 August 2023. Last summer, a court ruled that Quantuma’s fees would be fixed at a set rate of 11 per cent of realised funds from the platform’s loan book. Quantuma has previously estimated that its fees will top £800,000.