Rebuildingsociety investor profits fall in August
Peer-to-peer business lending platform Rebuildingsociety has reported a significant net loss of £43,795 for investors in August, compared to a net profit of £23,635 in July.
It means that August delivered an annualised loss rate of 24.91 per cent, making August a below-average month for the platform.
‘Net profit to lenders’ refers to the total amount of profit gained by all lenders during the period minus the total losses of all lenders during the period, a Rebuildingsociety spokesperson told Peer2Peer Finance News.
Read more: Business owners borrowing from family via Rebuildingsociety platform
During August 2022, the lender funded two new public loans, taking the total number of public loans made via Rebuildingsociety since its inception to 291. The total amount loaned to small- to medium-sized businesses (SMEs) is £16.8m.
Rebuildingsociety had no new defaults and no new refactors of public loans in August.
The total capital still out on all loans totals £2.1m, of which 11.28 per cent is currently in default.
During the month of August, the lender received £29,951 in capital repayments and £35,069 in interest payments on public loans. £2,981 was recovered from default.
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In March 2021, Rebuildingsociety changed its net return analysis methodology. It updated the initial bad debt impairment of loans, to reflect that since 2018 the recovery rate on concluded defaults has significantly increased.
In response to Covid-19, it also changed the classification of post-default payments to enable a company experiencing temporary payment difficulties leading to a default, to trade ‘out’ of default by making three consecutive full repayments on time.
Rather than every subsequent payment being classified as ‘recovery’, once the business shows they have weathered the disruption of Covid-19 by making three full repayments, subsequent payments are classified as capital and interest as from a normal performing borrower.
The lender said this allows the model to continue to give an accurate reflection of payments made by borrowers who have entered default because of temporary payment restrictions due to the pandemic.
Read more: Rebuildingsociety launches an app for investors
