Originally written by Timothy Adler on Small Business
Dozens of small businesses that borrowed money from peer-to-peer lending platform Growth Street have been told they must repay their loans.
Growth Street, which has lent £17.5m of investors’ money to 116 small businesses affected, is exiting the peer-to-peer market, giving them just three months’ notice to repay their debts.
The average amount owed is £148,122, with London and the South East accounting for 41 per cent of all borrowing, according to SME financier Rangewell.
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Loans repaid will be redistributed to Growth Street’s peer-to-peer investors in quarterly instalments, with any losses shared equally.
Astonishingly, not one of the affected businesses has missed a loan repayment to date.
A letter sent by Growth Street to borrowers, seen by the Times, concedes that the wind-down is “likely to be disruptive to your business”.
Back in March, Growth Street’s peer-to-peer investors panicked because of Covid-19 and extracted their cash from high-risk lending to small businesses as fast as possible. To try and stop the haemorrhage the investor stampede for the exit, Growth Street initiated a “liquidity event”, telling small business borrowers they had to repay their loans within three months.
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