FP Show 2018: P2P failures could 'drag' bridging market back

FP Show 2018: P2P failures could 'drag' bridging market back

Negative stories about P2P investments could damage the reputation of the bridging finance industry, according to one specialist lender.

The comment was made during a panel discussion on bridging, development and P2P finance at the Finance Professional Show at Olympia London yesterday (7th November).

The panel featured Gavin Diamond, commercial director of bridging at United Trust Bank; Roxana Mohammadian-Molina, chief strategy officer at Blend Network; Michael Dean, principal at Avamore Capital; Maria Magnussen, business development manager at Hope Capital; and was chaired by Adam Tyler, executive chairman at FIBA.  

The discussion turned to whether more bridging lenders would look to add a P2P investment element to their funding models.

Maria said: “If Mr and Mrs So-and-So invested £10,000 and lost every penny, [and] someone like the Evening Standard [got] hold of it and it is all over the front page … it will just drag the whole of the market back.”

However, Maria questioned whether brokers cared where the money funding loans came from.

“…When I was a broker, it was a case of thinking: well it’s more the surety of funds, rather than how those funds got there.”

Adam added: “…What we want [and need to be] careful as an industry is, if we do lose a couple of lenders from whatever space … it doesn’t tarnish the good work that we have done so far.

“My concern sitting here, is that it effects other parts of the industry that aren’t funded by P2P.”

Roxana highlighted that the P2P industry was very broad.

“Within P2P, you have so many different models which serve different types of lenders.

“There are some that start from £20, while you have some which are for more sophisticated investors.

“For example, we start at £1,000 and target more high-end investors, so it is a very broad term that has many different aspects.” 

Michael said that when Avamore Capital first launched, it considered P2P as a funding option, but had some anecdotal evidence of one or two crowdfunding platforms that weren’t making the best investments in their customers’ interest.

“What we determined was that in the short to medium term, there could potentially be a consumer backlash against investing in P2P and that is why we decided to steer [against that option].

“I think in the medium to long term that there is a real value to having that P2P arm source of funding.

“It is a great thing that investors have an opportunity to make those kind of investments.”

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