On Monday, online lending platform Assetz Capital announced it is doing away with the Great British Business Account (GBBA) and the Green Energy Account (GEA). The online lender revealed in a blog post:
“When we first set up the Great British Business Account (GBBA) and the Green Energy Account (GEA) the market was a little different to today. For one, there were more substantial renewable energy subsidies (FITs) available for newly constructed wind turbine projects than now. These FIT subsidies have since been cut and unfortunately the development pipeline of new turbines to produce green energy has dramatically reduced meaning we have no material loan flow into that account at present.”
Assetz Capital also noted that in the general secured business loan market, it has targeted slightly lower risk and priced transactions and as a result have had to pass on slightly lower interest rates in order to compete effectively in the marketplace – this has cut off loan flow into the GBBA at its current 7% gross target payable rate.
“It’s because of these changes in the market – all of which are beyond our control – that we have temporarily paused new investment into the GEA and permanently ceased it into the GBBA Series 1. We have plans to deliver new loan flow into the GEA and hope to be able to reopen the account at the current 7% target rate early in the New Year.
“However, in respect of the GBBA Series 1, as investors are currently queuing up to invest in this account and we’re unable to provide sufficient investment opportunities to meet demand (which is not a position that we or you wish to be in) we have decided to replace the popular GBBA Series 1 with a new Series 2 account. The new GBBA Series 2 account will be made available during Wednesday 20th December 2017 at a slightly lower gross target interest rate of 6.25% per annum. The GBBA Series 2 has been designed to deliver a very similar profile of loans as the original, but more tailored to market conditions to allow a greater number of loans to qualify for the account.”
Assetz Capital then reported for those already invested in the existing accounts, they will be able to request to cash in their investment in either account as this instruction will list these loan units for sale through the platform’s secondary market as normal.
“Alternatively, you can wait until the loans mature and continue to enjoy the current target rates of interest you are already receiving in those accounts, assuming the loans continue to perform normally. If you currently have cash awaiting investment into the existing accounts, you are of course able to withdraw that cash from the queues for those accounts at any time, if you wish.”
The online lender then added any interest or repayments coming back into the GBBA Series 1 from existing loans will automatically be returned to investor’s cash account although Assetz Capital hopes to be able to offer an option to move this cash to GBBA Series 2 in the near future if investors wish this to happen.
“Pausing the GEA and moving the GBBA to a new Series 2 rate has been a difficult decision, but one that we feel is right in both the short and long-term.”