Has COVID-19 affected Lending Loop?
Has COVID-19 impacted your marketplace for loans?
In response to the impact that COVID-19 has had on businesses Lending Loop has updated our credit policies to focus on businesses that carry a lower level of risk in the current environment. Our updated underwriting criteria means that Lending Loop is only currently approving loans to small businesses that operate in a select set of industries - specifically businesses that have the ability to operate in an economically sustainable manner in the current economic climate. This change means that we are not able to approve loans to businesses that are partially or totally closed (e.g. some restaurants, construction, and retail stores). This is likely to result in a reduction in the number of listings on the Lending Loop Marketplace in the short term.
Has COVID-19 impacted your collections on loans?
Lending Loop has dedicated additional resources to our loan servicing efforts which includes Collections and Recoveries. Our team is helping borrowers navigate the current economic challenges, coaching them through managing their expenses and sharing resources to help them access various government funding and subsidy programs (e.g. CEBA, CEWS, CECRA and more). Our goal in shifting resources is to support the businesses that have borrowed through Lending Loop and help them through this challenging time. We will continue to ensure that the performance statistics for loans are kept up to date at https://my.lendingloop.ca/statistics.
Will COVID-19 impact your projected default rates?
Given the current environment, we expect that actual loss rates on business loans are likely to exceed the rates that we have previously projected. Lending Loop will continue to pursue all actions that we can in order to support both lenders and our small business community. We hope to provide further updates on loan performance and revised expected loss figures in the coming months as the economy begins to re-open and the macroeconomic impacts of the current shutdown become more clear.