P2P lenders will be forced to put balance sheet at risk post-Brexit

Speaking at the LendIt Europe conference held in London, Posniak explained that uncertainty surrounding the UK’s departure from the EU meant P2P lenders would have to look at combining marketplace lending with balance sheet lending.

Traditionally, P2P lenders do not take deposits or lend themselves, instead generating income from fees and commissions created by matching borrowers with lenders.

Posniak said: “One of the major issues that the sector has faced as a whole is being able to treat money as their own. We’ve taken that one step further, which a lot more lenders will have to start to do, and that means putting your money on the platform ahead of investors, or side by side with them.

“Our stance is that we put our money at risk first and give our investors that cushion of protection. I haven’t heard of a great deal of lenders putting their money at risk first but if you want to grow at scale I think that has to happen.”

Tim Gordon, director and co-founder of Saving Stream, which focuses on development finance, said the lender was exploring the idea.

“It’s definitely something that we’d consider, we’ve had mixed opinions at the FCA [Financial Conduct Authority] on whether we’re allowed to do it, so that’s a bridge to cross at some point,” he said.