31st March 2021
We understand it’s been a difficult 12 months for so many of us, but there's light at the end of the tunnel and the UK is slowly emerging from lockdown.
We’ve made some important and positive changes during this time and so we wanted to outline some of our enhancements to the Crowd2Fund credit policy to give you reassurance about your investments on Crowd2Fund as we continue to scale up.
We’ve seen a 30% month-on-month growth for Q1 this year and aim to continue this trajectory of increased high-quality deals, especially as it’s now nearing the close to the end of the financial year. So we suggest that you act fast. Investors have until 5th April 2021 to subscribe their full £20,000 IFISA allowance - you can pledge these funds later.
We’re proud of our improved credit methodologies and processes and, although some losses are inevitable, we strive to keep these to a minimum. As ever, diversification is key to building a balanced investment portfolio on Crowd2Fund. Our improved crowdfunding tool, ‘The Exchange’, will also help you achieve this balance when it reopens very soon.
Here are the key improvements to our credit policy:
A full loan book audit
All loans that have gone into default or that have been written off since we started in 2014, have been re-reviewed by an independent external auditor to ensure that these loans listed on the platform were in line with our credit policy at the time. Although as a start-up there were some improvements highlighted from early loan approvals and our credit policy, with no systemic issues found that would have changed our decision to list any of these loans. However, hindsight is very useful and there are many learnings that have been taken very seriously and changes implemented as a result. The performance of our credit methodology is reflected across our loan book with positive earnings, as of today - even despite COVID-19.
These learnings have been factored into a new version of our credit policy which should help protect investors’ interests even more now and in the future. Our credit policy is continuously being improved along with our supporting technology such as our new loan monitoring system feeding the team up-to-date information about businesses performance. Streamlined processes and an agile culture help our credit team to follow the processes accurately and present you with access to the best deals, quickly.
We’ve introduced a number of enhanced checks, many of which have helped us understand businesses in more detail during Brexit and COVID-19. We’ll continue to implement additional checks, and utilising new technology such as digital sign-off points allows us to do this at a pace. Additional checks such as a COVID-19 questionnaire for businesses who’d like to list on Crowd2Fund, and also an assessment of a business' exposure to Brexit are examples of increased thoroughness.
Additional approval steps
To ensure that our credit processes are tightly followed, all loans are reviewed twice. First by us, and then for the second time by an independent underwriter to ensure that both underwriters achieve the same outcome. We’ve also introduced an additional compliance check by which all loans are also reviewed by an independent compliance auditor in real-time before being listed on our platform. These two additional steps are supported by new 3rd party applications and automation to ensure that we can retain a smooth process and also a high volume of deals for you to invest, while still offering good returns.
A new credit policy
In this modern age of technology and data, we are improving our credit policy on an ongoing basis and using innovative techniques to provide insights to our credit risk team to ensure they’re informed appropriately and can therefore make good credit decisions before the listing of any loan. This for example is a new integration with Companies House and Credit Agencies which we will continue to enhance. We’ve built bespoke Crowd2Fund software to support the monitoring of loans on the secondary market which includes unique pricing algorithms to help make sure loans on the Exchange are priced fairly.
Our pricing model
We’ve reviewed our loan pricing model to ensure as much consistency when the platform prices loans which hopefully you’ll be able to see with the investment opportunities that have been listed on the platform over the past few months. The Exchange pricing has also now been enhanced with the introduction of an automatically generated floor and ceiling price set by the platform. More up-to-date information will also be presented on Companies profiles such as their most recent accounts and profit and loss where available.
It’s critical we continue to invest in smaller UK businesses to help them grow post-COVID-19 and in turn to help secure the UK’s economic future.
We really hope this gives you reassurance and added confidence in continuing to invest via the Crowd2Fund platform with these additional levels of protection.
Subscribe funds before the 6th of April to make the most of your £20,000 per year IFISA allowance and back some of the UK’s most exciting entrepreneurs.
If you’d like to be part of our growth as we scale up our platform and marketplace, we invite you to invest in our Reboot Britain campaign where you could earn 4.00% tax-free on our convertible investment.
Past performance and forecasts are not reliable indicators of future results. Tax treatment of any of the investment offers will depend on the individual circumstances of each investor and may be subject to change in the future. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser. Do not invest more than you can afford to lose. Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Investing in start-ups may expose the individual concerned to a significant risk of losing all of the money or other assets invested. Peer-to-business lending through Crowd2Fund is not the same as holding a bank or building society savings account. When making a peer-to-business loan, your capital lent to a borrower is not covered for compensation in the event of a loss by the Financial Services Compensation Scheme. It may prove impossible to recover all or part of the loan by calling in the business assets held as security on that loan. Reward and Donation funding types are not regulated by the Financial Conduct Authority Crowd2Fund Limited is authorised and regulated by the Financial Conduct Authority (FRN 623683). Crowd2Fund Limited is registered in England and Wales. Registered No. 08472687 Registered Address: 242 Acklam Road, London, W10 5JJ.
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.