Coronavirus And Your Investment: An Update From Leap
With the outbreak of COVID-19 causing an incredible impact on the stock market, the entire financial industry is facing a new and uncharted future.
Because of these uncertain times, we understand you may have questions about how your peer-to-peer investments will be affected by the coronavirus outbreak.
Our peer-to-peer portfolio isn’t directly linked to the stock market - which has been making headlines for the unprecedented volatility. We therefore do not expect to see peer-to-peer investments perform in the same way.
How Does Coronavirus Affect My Investment?
Because your investment has been spread across a portfolio of personal loans, which are offered over fixed terms, the performance of your investment relies on the repayments from borrowers and should not be directly affected by general changes in the market.
If a borrower found themselves in a situation where they were unable to make the repayments, due to a change in employment or similar circumstances, we have measures in place to mitigate the risk of default.
How Does Leap Mitigate Risk?
When investing in any peer-to-peer platform, during any time or circumstance, you will face a certain level of risk. No peer-to-peer investment is protected by the FSCS, whether you invest with Leap or any other P2P Platform.
As a responsible lender, we take a careful approach to lending and only lend to borrowers who have been vetted and can demonstrate that they are able to pay back the loan. This allows us to reduce expected losses for investors.
To help ensure this, we only utilise the most effective underwriting techniques which include:
- Credit checks - we perform credit-bureau assessments on all borrower applications.
- Affordability checks – we assess a borrower’s income, expenses and levels of debt.
- Identity checks - we use sophisticated software to verify a borrower’s identity.
Additionally, all investments made will be diversified across five borrowers or more. Therefore, in the unlikely situation a borrower was unable to make the repayment, the majority of your investment would not be affected.
We will continue to monitor the situation and implement any necessary changes to our credit model to ensure that you can feel comfortable with your investment with Leap.
Coronavirus and Leap
Due to the current advice from the government regarding working from home, and to ensure the safety of our staff, the Leap team are currently working remotely.
They are fully prepared to continue offering the same level of service and can help you with any questions or queries you may have regarding your investments.
If you need to speak to one of the team, you can reach them from 9am - 5:30pm Monday - Friday on 0203 887 7154 or email email@example.com
We hope you stay healthy and safe in these strange times.