23rd April 2020
Since the start of the COVID19 outbreak, Crowd2Fund has been focused on managing potential economic damage and ensuring smooth operations throughout the platform. So far, our contingency plan and process seems to be working in helping businesses access the emergency funding or converting to a revenue loan.
To further this effort to protect your interests, we have decided to temporarily pause listing new opportunities and activity on the Exchange. It is absolutely in the best interest of protecting investors and preparing the platform for the post-crisis economic recovery. All other platform features will work as normal, including access to your wallet.
We take the due diligence and credit assessment of the businesses listed on Crowd2Fund with utmost seriousness, and these assessments also include market conditions. We have also been reviewing our credit policy on an ongoing basis throughout this market disruption. Given the nation-wide lockdown — and the significant reduction of UK economic activity — we believe it would be unfair to list new businesses while we aren’t fully aware of the risk.
We truly believe that FinTech platforms will be a core support structure for the future of the UK and global economy. This temporary pivot will allow us to continue focusing on managing the existing loans on the platform, improving technology, reviewing compliance, and helping SMEs access emergency CBILS funding.
We are reinforcing the credit and due diligence process, this includes a review of every loan on the platform, and giving every loan a risk mitigation plan — helping us work with the SMEs to ensure repayments continue smoothly. Insights from this process will also feed into our credit policy, as compliance is at the core of what we do.
In response to these challenging times, the government is flooding the market with £330bn of cheap credit to support small and medium sized enterprises – which is truly fantastic. This is the largest bailout in the history of the United Kingdom, and will have a dramatic impact on the credit market for every business. We have applied to the British Business Bank to determine if they can use the Crowd2Fund platform to deploy these emergency funds. However, formal approval is still pending. Regardless, we welcome the fact that FinTech platforms are being called on to help.
We are completely focused on preparing Crowd2Fund for the impending economic recovery effort; the most important economic challenge the country has faced in centuries. We will be reviewing our financial products, and ensuring the revolutionary capability of the platform is used to its full potential. This will compliment new government initiatives, such as the Future Fund, where £1.25bn of investment has been made available for future-focused, innovative companies, building the foundations of our future within the UK. The Future Fund uses an innovative debt and equity approach, match funding private investors with HM Treasury funds, allowing businesses to convert loans into equity at a discount.
Overall, Crowd2Fund is a revolutionary investment methodology with the potential to mobilise £bns of private investment capital. Our loan book, platform technology, and user base are in good shape — and we intend to keep it that way. The COVID19 crisis is a once in a lifetime event, and we want to ensure the Crowd2Fund platform grows in strength and resilience throughout this uncertain time.
Looking to the future, we will use everything we’ve learned over the past 7 years to get out of the gates early with determination and energy. Our plans have been defined to expand the platform across the 54 Commonwealth markets post-crisis, offering banking services and access to credit to underserved entrepreneurs across the world. We see a massive opportunity for Crowd2Fund to drive prosperity in these markets, which account for 33% of the global population yet only represent 14% of the global GDP.
Rest assured that we are committed to continuing our mission to champion entrepreneurs and their businesses while protecting our investors' interests, and working with other institutions to weather this storm together. Thank you for supporting the growth of the platform over the past few years — we look forward to continuing this journey with you, sharing resilience, strength, and the best of British innovation.
Please do not hesitiate to contact us if you have any questions on : +44 (0) 203 318 9272
Question and answers you may have
Will I be able to withdraw or add funds to my wallet?
Yes. There will be no impact to wallet functionality, and you will be able to add and withdraw funds as per usual. Your funds will continue to be held in our secure RBS client account, for you to access whenever you wish.
Can I transfer my ISA in or out of Crowd2Fund?
We will still be managing ISA transfers in and out of the system. If you have loans currently being repaid, these will continue to be repaid and you can conduct an ISA transfer when funds have been added to your wallet.
When will I be able to use the Exchange again?
We aim to have the Exchange working again as soon as the crisis has been resolved. We have paused transactions during this period of significant market disruption to protect investors, as we can not confirm that the price the loans are being offered at are fair. The Exchange is and will continue to be a core feature of the platform, and we hope to re-enable it with improved features after the crisis.
What happens with the loans that were recently funded on the platform?
We will be refunding any loans that have recently been listed on the platform. These funds will be added to your wallet.
When do you expect the platform to be back up to its full feature capability?
We aim to have the full functionality of the platform enabled after the crisis, hopefully in a few weeks.
Will the loans I have listed on the Exchange be re-listed?
We will preserve the Exchange in its current status. If appropriate, we will re-list all loans after the crisis is over.
If Crowd2Fund are no longer listing businesses, what does it mean for Crowd2Fund?
We will continue to generate revenue from the repayments that are collected. We have significant cash reserves to see us through this period, and are operating the platform effectively — and remotely— with significantly reduced costs.
What about the repayments for your current investors?
Repayments will continue to be repaid and processed as per usual.
How are you protecting your current investors?
The sole reason for the changes is to protect the platform and its existing investors during this challenging time. The team is focused on collecting repayments and helping SMEs access the emergency CBILS credit. Where businesses cannot access emergency credit, we are trying to help them convert their existing loan structures, and keeping investors informed. We will also be providing regular updates.
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.