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 2x expected losses currently). This is a 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 fairly small (£16.8m as at July 2018)
  • Interest rates are currently 5.3% 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 134 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 8 defaults (as at July 2018) which represents a cumulative default rate of approximately 1.5% on funds lent to date. This is lower than the 3-4% rate we would have expected to date. We think that Growth Street best suits investors who are looking for a simple investment product, with a stable return, that does not require much or any time to manage, is liquid, and has some loss protection features. We think the returns and risk profiles compares favourably against similar UK P2P sites such as Funding Circle and Ratesetter.

Special offer for new investors

Growth Street is offering investors one of the largest signup bonuses available anywhere currently for new investors. New investors receive a £200 bonus, for anyone investing at least £5,000 for a 12 month period. This represents an expected return of 9.3% for anyone investing £5,000 in their first year of investment. Further details can be found here.

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