Assetz Capital has around £440m available to lend to UK SMEs, but how quickly will it be distributed?
The secured SME lending platform made a big splash this weekend in the pages of This is Money – revealing the apparent procurement of £525m in lending capital. £325m of the £525m comes courtesy of a pair of fund structures. We’re told that the existing £150m Victory Park Capital commitment has been baked into that £325m total. Victory Park committed to putting the £150m to work across the platform in January last year, agreeing then to a deployment horizon of 5 years.
The remaining £200m has been sourced via retail investors. Since launching in March 2013, Assetz has lent a little over £86m, according to the Liberum AltFi Volume Index (UK). We understand that this £86m is included in the £200m figure. Whether or not the remaining £114m in commitments represent contractual obligations is difficult to discern. We suspect that “theoretical firepower” might be a better method of describing the £114m. Assetz boasts a grand total of 11,000 active individual investors.
Assetz is currently the 5th largest business lending platform in the UK in terms of cumulative lending volume. And yet the platform to a certain extent underwhelmed in 2015, lending £31m on the year, falling short of our £55m prediction. That’s despite the fact that the Victory Park funding line was in place, and that the platform struck a referrals partnership with RBS at the start of the year.
With an apparent excess of lending capital now ready to deploy, should we expect Assetz’ origination volumes to accelerate? Cause for optimism comes in the form of the platform’s burgeoning broker network, which is supposedly on the verge of bearing fruit in abundance.
“Having the funding in place by working with a number of outside funding sources greatly increases borrower demand. The retail crowd then also benefits, and we will always ensure the retail investor get their fair share of loans, on the safest terms we can deliver. All parties can win – which is the true essence of peer-to-peer lending. Continued growth will benefit both UK SMEs and investors.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.