Growth Street reaches dead end as board opts for wind down

By Oliver Smith on Wednesday 22 July 2020

Alternative Lending

"It wasn’t possible in the current environment to put together the package of equity investment and institutional funding necessary to continue the business.”

Growth Street reaches dead end as board opts for wind down
Image source: Kim Goetzke/Growth Street.

After five years and well over £500m worth of small business lending, Growth Street’s board yesterday elected to begin the process of closing the business. 

The marketplace lender is currently in the end stages of winding down its loan book, working to recall its final loans as part of a Resolution Event that was triggered after the lender failed to reassure its investors. 

“It is with deep regret that we have taken the decision to begin a solvent wind down of the business once the Resolution Event is complete,” said COO Kim Goetzke who’s been running the management team since the departure of CEO Greg Carter in December. 

“This is not a decision which we have taken lightly. We believe passionately in Growth Street as a business and we will make every effort to ensure that the impact to our investors and our borrowers is minimal. Our team will continue to work tirelessly to return funds to our investors.”

In May 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.

Goetzke detailed “numerous challenges” presented by Covid-19 to the business, and while last month he had said Growth Street would look to launch a new lending product once its existing loans had been wrapped up, yesterday he admitted “unfortunately, we weren’t able to get there”. 

“We assessed all of our realistic options, including having discussions with our shareholders and other institutions to find a solution that would enable us to build an economically viable business going forward whilst allowing us to offer a market leading proposition for our customers.”  

“Unfortunately, it wasn’t possible in the current environment to put together the package of equity investment and institutional funding necessary to continue the business.” 

For now only a core team will remain at Growth Street to complete the Resolution Event and wind down the remaining business. 

"To those leaving the business, we will help you in every way we can,” concluded Goetzke.

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