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Crowd2Fund Risk Mitigation

Strategies for Uncertain Markets

4th October 2022

With the global economy looking uncertain, we wanted to reassure you that we’re putting strategies in place to achieve consistent tax-free. Over the past 8 years, we have worked hard to secure returns by applying careful risk management. 

Here is an overview of what we’re doing to help protect your earnings and manage risk at Crowd2Fund.

Key elements to our risk mitigation strategy:

  • Rolling review of our credit policy and market assessment
  • Increased investment governance and controls while remaining pragmatic
  • Additional experienced executive and non-executive team members

Rolling review of our credit policy and market assessment

With the speed of change in the market, our credit committee moved from quarterly to monthly reviews and adjustments. A core focus is around adjusting the interest rate in line with the market to ensure investors are offered a rate that accurately reflects the risk of each investment.

We are always reviewing the business assessment process and introducing new checks, relevant to changing conditions. Recently, we introduced a check for assessing the impact of inflation on businesses and currency risk. These additional assessments are summarised in our credit commentary on each of the campaign pages.

Outcome – Dynamic policy and returns for changing economic environment and tax-free earnings of up to 18% APR.

Increased investment governance and controls while remaining pragmatic

The management of the business continues to strengthen with the implementation of our new board 6 months ago. This is an ongoing process that provides access to networks and expertise, accountability and strategic support for the executive team.

Outcome – A solid varied team with lots of experience keeping consistency and to ensure good decision making.

Enhanced Small Business Exchange (SBE) generating liquidity and stimulating diversification

The most exciting development in recent months is the opening of our Small Business Exchange (SBE) which significantly advances our FinTech proposition. The SBE allows investors to trade their current investments with other registered investors. 

We’ve got big plans for this including the international expansion of the SBE and offering equity trading in small businesses via this capability. Since opening the Small Business Exchange, we’ve seen extremely high demand on the buyer's side purchasing investments from investors normally within a few hours.

We’re looking to relax the criteria of investments being listed to meet the high purchasing demand from investors while ensuring that non-performing investments are not listed. Our dynamic and automated due diligence technology allows us to manage and monitor this area of the business effectively.

Outcome – Additional liquidity for the primary market, potential for diversification and for investors can potentially sell investments to others.

What next? 

It’s more important than ever to back British entrepreneurs. Make the most of your generous Innovative Finance ISA allowance, support the economy and earn up to 18% tax-free, inflation-busting earnings.

 

Please get in touch if you’ve got any questions at info@crowd2fund.com.

 

Risk Warning

Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.

 

 

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Risk warning

Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.

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