Assetz Capital, a peer to peer lenders, says it has completed its securities offering on Seedrs that was matched by Future Fund money. In total, Assetz Capital raised £1.5 million with half of that amount coming from retail investors.
The Future Fund is used for convertible loans ranging from £125,000 to £5 million backed by the government, subject to at least equal match funding from private investors. Firms must have previously raised at least £250,000 in equity investment from third-party investors in the past five years.
Assetz Capital is a secured business lender, lending to UK SMEs and small housebuilders. The new capital is being used to further support its growth and also help fund the setup of its lending under the Coronavirus Business Interruption Loan Scheme (CBILS).
Assetz Capital also notes that it has a growing portfolio of institutional investors. Institutions investing on the platform include Aros Kapital, the Nordic bank, and British Business Investments, a subsidiary of the British Business Bank, with new institutional lenders in the process of being onboarded.
By mid-September, Assetz Capital said it had seen hundreds of millions of pounds of CBILS loan inquiries and had already worked through the approval process for over £200 million of those.
Earlier this month, Assetz Capital reports having restarted retail lending. The company predicts that it will lend its second £1 billion to UK SMEs before December 2022, in contrast to the seven years it took to lend the first £1 billion.
“We are proud to bring the UK government into our shareholder base through the Future Fund, sitting alongside new retail investors after our latest crowdfunding round. We have our momentum back in the business again after the necessary pause for the pandemic. Covid-19 has thrown up significant challenges for all business, but we feel that we are already entering the next up cycle where we are again focused on growth and getting back to providing UK SMEs much needed capital at scale. We are fully supportive of the extension to CBILS and remain ready and able to also deliver under the new government scheme that follows CBILS in the New Year. It is great to see our furloughed colleagues returning to work and the team’s professional management of the crisis that hit the country in March. We have seen a huge effort from our colleagues to keep delivering on our purpose to support UK SMEs as well as delivering attractive rates of interest to investors. We look forward to a strong finish to this year and a very strong 2021 as we fulfil growing demand for funding from quality borrowers.”
Law said their retail investors were originally attracted to the loan interest rates on offer and also the sectors they support.
“Whilst the pandemic was a bit of a shock to everyone initially, we are seeing most investors getting comfortable that our property secured approach – and the sectors that we lend to – provides them a degree of comfort and a fair return for their investment,” said Law. “The debate on negative interest rates is intensifying and Bank of England data published last week shows deposit rates continuing to decline in July. We note banking sector analyst remarks that the impetus for deposit rates to fall further in the short-term will drive diversion of funds to wealth management and other higher interest-earning investment products as we come out of this crisis. This is a strong statement but only confirms our existing expectations that this will happen, and possibly at a significant scale.”
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