UK based p2p lender RateSetter has decided to no longer accept unsecured small business lending applications; the company said it will limit commercial lending to property and asset backed loans; “we have a clear framework around which to grow our commercial finance volumes and continue to deliver access to healthy returns to investors,” said Rhydian Lewis, founder and CEO of RateSetter, to AltFi. Source.
RateSetter was the last of the “big three” p2p lenders to be authorized after a two year wait; both Zopa and Funding Circle were authorized in May, 2017; RateSetter will now be able to launch their Innovative Finance ISA; Founder and CEO Rhydian Lewis stated, “Authorisation has been a long but positive journey during which we have learnt a lot, improved our infrastructure and implemented important changes, notably making the business more transparent. Transparency is vital to our business because our customers need to understand what we do to appreciate the risk of lending on RateSetter.” Source
RateSetter saw pre tax losses jump to $31mn from $7.1mn due to a bad loan to an advertising company; RateSetter also saw revenues jump by 38 percent as well as increases in customers and borrowers; the bad loan was absorbed by the lender as they explained it fell outside their credit policy and it was unfair to put the losses on their investors. Source.
In a recently recorded speech, Rhydian Lewis said that the company expects to be profitable in 2018; the p2p lender was previously profitable in financial years 2014 and 2015; the company is also celebrating its seventh birthday and has facilitated £2.1bn in loans, connecting 57,000 lenders with 388,000 borrowers. Source
The round was led by Five V Capital, who reportedly invested $8.5 million; company plans to boost number of employees from 50 to 80 in the next year; RateSetter Australia has doubled is loan levels since 12 months ago; Daniel Foggo, RateSetter chief executive stated, “In August, we became the largest peer-to-peer lender in Australia — both in terms of the number of lenders, and the number and value of loans funded each month.” Source