Borrowers put in a squeeze as Growth Street winds down its loan book

After unsuccessfully looking to stem withdrawals from its platform since March, Growth Street last week triggered a ‘resolution event’ with all its loans being recalled.

The move means that all borrowers will have to repay their loans within 90 days, and any losses will be spread across Growth Street’s investors.

As part of its resolution event Growth Street also announced it will be shuttering its peer-to-peer platform and moving towards institutional funding.

According to The Times, Growth Street currently has 116 business borrowers with £17.5m in outstanding loans which are being recalled.

“We will work with all these businesses, individually, to help them to find alternative sources of finance and to develop bespoke repayment plans to try to minimise any disruption to their day-to-day operations,” said Kim Goetzke, Growth Street’s chief operating officer.

Goetzke said Growth Street is planning on launching a new lending product once the process is complete.

Growth Street was among the first peer-to-peer lending platforms to stem investor withdrawals back in March, initially with a 90 day ‘liquidity event’ seeking to restore confidence among investors.

Last month Growth Street filed its 2019 accounts which suggested the platform had seen losses increasing to £1.86m at the end of a particularly turbulent year.

At the beginning of December 2019, Growth Street’s CEO Greg Carter stood down from his role and the previous month Growth Street had shrunk its headcount from 50 to 70 staff.