Assetz Capital

Peer-to-peer platform plans to treble lending

Assetz Capital hopes to lend around a third of a billion pounds during 2017 as it looks to open its Innovative Finance Isa (IFIsa).

The lender revealed to Bridging & Commercial after lending £46m in Q4 2016 alone, it believes the growth target is achievable.

Assetz Capital announced at the start of the year it had lent £200m since launching in 2013 after lending £108m in 2016.

Stuart Law, co-founder and CEO of Assetz Capital, explained to Bridging & Commercial that it had several plans to help it achieve its lending targets.

This included expanding its regional branch network adding significantly to the four already in place in London, Manchester, Edinburgh and Belfast, as well as substantially expanding its relationship director team to ensure that most UK businesses are within no more than a one hour drive.

“The regional support we provide to businesses has been highly successful in explaining how P2P finance works and meeting [the] bespoke funding needs of SME businesses.

“It has also been a good way to engage with brokers, who have become important advocates of P2P lending.

“We also expect to open our IFIsa following FCA [Financial Conduct Authority] authorisation and we also have a new product in the final stages of release that will be announced shortly.”

With regards to whether Assetz Capital would look to operate in new areas of lending, Stuart added: “We already offer one of the fullest ranges of SME finance, including SME term loans, bridging, development finance, business BTL and renewable energy loans.

“Other products remain under review, though, so watch this space in 2017.”

‘The IFIsa will help enormously’

Stuart continued by adding Assetz Capital would remain committed to peer-to-peer lending for retail investors and looked at how the industry, as a whole, could attract more investors in 2017.

“The IFIsa will help enormously, however, as Assetz already has a solid reputation in delivering returns built over the last four years, this helps to reassure investors and institutions.

“Our track record speaks for itself, and as the industry becomes more transparent, it is becoming very clear which platforms provide the most interesting net returns, after allowances for any tax or possible losses.”

Stuart felt that, as a sector, peer-to-peer platforms needed to deliver solid credit quality.

“Those that don’t will disappear quickly, but those that do will continue to grow rapidly and attract more investors.

“We don’t see any limits on retail investment demand at present as evidenced by Zopa," he said, adding: “…we ourselves have caps on inward investment from time to time also.”

‘We expect new guidance and new rules to come into play’

The FCA confirmed last year it was looking into the regulation of alternative finance platforms and Stuart believes that in 2017, existing regulation will be enforced more than it has been in the past as the FCA knows the industry better.

“Nonetheless, we expect new guidance and new rules to come into play, which we hope doesn’t stifle a growing market, which is in effect delivering fair, risk-adjusted returns, more transparency and more flexibility for investors.”

‘The time for general peer-to-peer start-ups was over in 2015’

Stuart concluded by looking at whether he expected to see any new entrants within the peer-to-peer market.

“I think the time for general peer-to-peer start-ups was over in 2015.

“However, we do expect to see some existing financial service businesses trying to bolt P2P on to their existing operations.

“For most established businesses outside the P2P market, the challenge to build their brand among retail investors remains, and we all know that it's not an easy market to crack.

“We can see some P2P lenders who used to be retail investor focused closing that side of the business and moving towards institutional money as an originator for them.

“This is not a direction we will adopt.”

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