Where next for marketplace lending – or peer-to-peer (P2P) business lending? Trade media outlet crowdfundinsider reports on an impending regulatory clampdown, as covered on this site yesterday.
"The peer-to-peer lending industry has widely benefited from a regulatory approach that has been deemed quite progressive. Lending firms must register and be approved by the FCA but guidelines and requirements are rather light. This approach has allowed platforms ... to quickly grow and fill a void left by traditional banks," says crowdfundinsider.
"Borrowers may get a loan quickly and frequently less expensively than alternatives. Lenders now have an option easily invest in an asset that generates higher returns than a savings account but may be less risky than other asset classes. The P2P sector has quickly grown and has benefited from an administration that is scene as encouraging its growth."
The site goes on to quote an "unnamed regulator" as saying: "The quality of the information provided to consumers in marketing is something that we concentrated on, and we have been working closely with peer-to-peer firms on this issue.
"Our supervisory teams regularly review the marketing of regulated firms, and where there are concerns they can ask for materials to be withdrawn or changed."
Money&Co.'s marketing material has been subjected to independent compliance checks, and, while we are advocates of P2P business lending and the process of bringing individuals looking for good returns on capital together with carefully vetted business borrowers, we always point out that capital loaned is subject to risk. For more on those risks, please read our Frequently Asked Questions, and the risk warnings on our Home page and elsewhere on site.
*** The A-rated Mar-Key Marquees loan closed yesterday, raising £425,000 for the borrower. The average gross yield for lenders was 8.1 per cent. New deals will be available on site shortly. Meanwhile, the loan auction site is active, for those wishing to acquire existing loans.
And, again, bear in mind that lending carries risk.