Growth Street amends lending criteria following restructure

Growth Street has outlined changes to its lending criteria following an overhaul of its platform last year.

The peer-to-peer business lender announced a restructure and layoffs in November 2019 which also included the departure of its founder and chief executive Greg Carter.

The platform has also made efforts to reduce risks by reducing its loan size from £2m to £1m and making it mandatory for any borrower applying for a Growth Street loan to connect their accounting data via Open Banking or cloud accounting to their dashboard.

“By lowering our maximum facility limit, we have reduced the potential risk of any single borrower,”  Kim Goetzke, chief operating officer at Growth Street, said.

“We are also driving forward our automated, rules based credit decisioning system to speed up the time it takes to approve applications, while minimising our risk exposure.

“With our technological ability to read Open Banking and cloud accounting information, we will continue to bolster our position as the leading data-driven player in the small- and medium-sized enterprise (SME) lending market.”

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The move also followed defaults of two major loans on the platform last year which were put on its balance sheet.

“We decided to reflect the loss on our own balance sheet in order to prevent any impact on our investors and retain the balance of our substantial loan-loss provision fund,” Goetzke added.

“This move also gave us the flexibility to maximise the recovery of assets from these two complex cases.