Today Canadian p2p lending site Communitylend announced that it will close the p2p lending marketplace to focus on its consumer lending business. Communitylend will continue to service existing loans; there will just be no new ones.
Quote from the announcement:
If you have been following the CommunityLend Peer to Peer (P2P) Lending story over the years you might have been wondering why we have been so quiet here here recently. The short answer is that we have been trying to decide how much more time to spend on our P2P Lending site in light of a larger and faster growing consumer lending business we also operate called Financeit™.
We have now made the decision that we will be suspending the operations of our P2P lending site so that our team can focus solely on Financeit™.
This has not been an easy decision for us but one which has come about over time because of our observation that P2P Lending, as it needs to operate within the Canadian regulatory system today, has enough headwinds blowing against it that getting to a significant scale was going to be both expensive and difficult. As we searched for solutions to these challenges as a P2P Lending operator, we kept our focus on our desired goal, to create a lending product for Canadians that gave them a less expensive and more convenient way to get an instalment loan.
We realized that we needed to get closer to where the borrowing “transaction”’ occurred instead of recruiting the borrower after the fact. People buy things in a store location (offline and online) and too often just use their credit cards and then carry balances with high interest rates. We realized that helping people at this transaction moment was the key to driving interest in our lending product. This conclusion led us quickly to focus on sales finance and starting in late 2010 we launched a market leading sales finance platform called Financeit™.
Fast forward to 2012 and we now have over 600 enrolled business partners across three market verticals for Financeit™ and two institutional lenders powering the platform’s double digit month over month loan growth. Financeit™ is now one of the fastest growing businesses of its kind in Canada.
The success of Financeit has led us to decide to focus all of our energy on the new business, leaving us no time for our original dream, the P2P marketplace. The result is that we have chosen to suspend the operation of this service starting today.
So What Happens for Existing Borrowers and Lenders at CommunityLend?
For our existing borrowers with loans outstanding, nothing changes. Your payments will continue to be processed on the same date and distributed back to your lenders. Failure to maintain your payments will send your loan into collections with our collection agency partner and be reported to our credit bureau partner (and believe me you don’t want that).
For our existing lenders, your loans payments will continue to be collected and returned to your lender accounts until all of the loans are complete. Because there will be no new loans for you to bid on, you can request your cash balances to be sent to you at any time. You can still log into the site to view payment activity.
We do want to thanks all of the folks who have been supporting P2P lending over the years and to encourage you to continue to follow our rapidly growing new business model.
If you love the idea of P2P lending and wanted to discuss some strategic options for this novel lending service, we invite you to reach out. We still believe in Peer to Peer lending especially sponsored by the right party.
If you have any questions or comments about our decision or new direction, please let us know.
– Michael Garrity and the CommunityLend (and Financeit) team