Growth Street review

Rated 3.5 stars out of 5

What we like

What we don't like

Key facts

  • Investments are diversified across the entire loan book
  • Growth Street's provision fund is well funded (more than 250% of expected losses currently). This is a much higher coverage ratio than several other platforms
  • Investments can be fully liquidated within 30 days if needed
  • All Growth Street loans are secured on business assets
  • Perfect for investors who are looking for a simple product that requires very little effort or time
  • Growth Street closely monitors each business after issuing each loan
  • Growth Street has only been open to individual investors since November 2016. The loan portfolio is currently small
  • Interest rates are 6.4% which is good compared to similar products offered by other platforms. Some P2P investors target higher returns than this
  • Loan types - Loans to Small and Medium sized Enterprises (SMEs) secured on business assets
  • Collaterals - Charges placed over business assets such as inventory and invoices
  • Protection fund? - Yes
  • Autobid available? - Yes (no individual loan selection is possible)
  • Secondary market? - Investments can generally be sold within 30 days
  • Is platform profitable? - No
  • ISA offered? - No

Our views on Growth Street

Growth Street is one of the newest platforms to enter the UK market. It competes against Funding Circle and RateSetter. It has an unusual structure for its loans – all loans are 30 days which are then ‘rolled over’ at the end of this period. This structure means that investors can sell their entire investment within a 30 day period. An interesting feature of Growth Street’s platform is that investors cannot select individual loans, they instead receive exposure across all loans (currently 126 borrowers). A protection fund exists which is designed to cover losses from company defaults. The protection fund is currently well funded versus Growth Street’s 12 month expected loss estimates, but this is something that investors should monitor. Growth Street claims to make use of ‘Advanced Data Integration’ which is designed to provide real-time access to the banking and accounting records of its borrowers, and spot emerging risks. Growth Street has only been lending since 2014, but its lending record to date has been strong, with only 3 defaults and no losses (as at June 2017). Growth Street is currently a small platform, and as a result, most investors will probably limit their allocation to it  until it grows further and develops a longer track record.

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