News

Brexit: reaction from the UK crowd finance industry

June 27, 2016 • By TAB team



Since the result of the UK's EU referendum last week, we have closely monitored the early reaction from the crowd finance industry, with Emily (our CEO) sharing our immediate thoughts in a blog post on Friday (it's worth reading if you haven't done so). From the platforms themselves it appears that a mood of continuity, reassurance and pragmatic optimism prevails.

Since the result of the UK's EU referendum last week, we have closely monitored the early reaction from the crowd finance industry, with Emily (our CEO) sharing our immediate thoughts in a blog post on Friday (it's worth reading if you haven't done so).

From the platforms themselves it appears that a mood of continuity, reassurance and pragmatic optimism prevails.

Continuity

In a message of business-as-usual, Seedrs states "The outcome of the Brexit vote has no impact on entrepreneurs and investors from across Europe using the Seedrs platform... For now, we can and will continue to accept all European businesses and investors under UK regulation."

Funding Circle, asserts that "leaving the European Union will take approximately two years" and that there will no immediate change to its "day to day operations and the way you lend to small businesses through the marketplace." It also emphasises its robust capital position and the strength of loan recipients.

Similar sentiments are also expressed by Christian Faes and Ian Thomas at LendInvest emphasising its position "as a company that is very well-capitalised, profitable and with one of the most diverse funding bases of any UK mortgage or marketplace lender."

Reassurance

On the theme of investment risk, Stuart Law at Assetz Capital, explains that "the credit team will be even more careful on the quality of businesses we lend to" and that "hard security on loans will be even more important than ever."

Jaidev Janardana at Zopa follows a similar message, explaining that "In periods of uncertainty, we prefer to be cautious. As a result, we have tightened our underwriting standards."

Opportunity

On a more positive note, Saving Stream and Property Partner, two property focused marketplaces promote the strength of property as an asset class in uncertain times.

And on the theme of asset class strength, Luke Lang at Crowdcube emphasises the underlying strength of the UK equity investment market and that "Crowdcube's market share will continue to grow as more UK investors want to diversify their investment portfolio and gain access to this long term but potentially highly lucrative asset class."

Finally, Rhydian Lewis at Ratesetter takes the opportunity to differentiate the current wave of fintech operators vs more traditional banking businesses, commenting, "FinTech is in its infancy but that means it is necessarily forward-thinking and modern and that allows it to respond more nimbly to the inevitable changes and opportunities that will arise from today’s vote. Leaving the EU may discombobulate big banking conglomerates and FinTech businesses will look to fill any spaces."



In all, the speed of response and consistency of message is reassuring. We will monitor continued reaction and will use our unique view of the market to identify any impact that is experienced.

Dan Ridett