Is Lendy (formerly Saving Stream) the Next High Profile P2P Failure?

Edit: Since this post was written, Lendy indeed have gone into administration.

I feel almost compelled to write this post as an increasing number of searches on the site are regarding Lendy. I first wrote about Lendy here and awarded it a 0.5 star rating. It is fair to say that times have moved on a little and recent events probably deserve a post of their own.

Sadly enough, there is little good news in this post. I would guess that many of you would be in the same position as myself. A decent amount of cash invested in Lendy which is now paying little (if any) interest, and it seems that the whole platform may be at risk. Personally I see the situation as irrecoverable now, and the door has gradually closed on those who are (un)lucky enough to have a cash balance in there.

Even more sadly is that while last year we wouldn’t know what would happen if a large P2P platform went under, we do know now as one (Collateral) has done since. The recovery process for investors there does not look good. The original administrators chosen to wind down affairs was disputed in court. The new ones have taken over a year to not do very much and charge a lot of money for. The loans were mainly not complex and yet investors are looking at a substantial loss.

Given that the Lendy loan book comes with more difficult loans, some of which go beyond the description of distressed and are even more complex, a winding down seems likely to rumble on for years, cost a lot of money in administrator fees and also feature a lot of capital haircuts. No doubt there will be people who suffer very heavy losses, as they cashed in all their ‘good’ loans and were left holding a lot of bad ones.

The State of Play at Present

You may or may not know that Lendy are under an asset restriction from the Financial Conduct Authority (FCA) which reads as follows:

On the face of it this would seem to be a freeze on outgoings of the accounts, as to pay out money would reduce its assets.
Co-incidentally, Lendy has been suffering ‘banking issues’ for the past two weeks. This has meant it has been unable to process withdrawals – what are the chances? Only now are we getting some disgruntled tweets:

I would expect the number of these to increase if permission is not granted to make these payments. The asset freeze is not without good reason. Presumably nobody else can be paid.

We must also start worrying about the overall big picture. The last set of accounts only go up to 31 December 2017 which were really the end of the golden period for Lendy. The year before that, the company made over £3m in profit before tax, this had dwindled to £764k for 2017.

A snippet from the accounts looks like this:

This was a really healthy position to be in, or so we thought. Unfortunately the rest of it looks like this:

Creditors are mostly made up of money deposited into Lendy accounts. Current assets are the monies owed by the developers to Lendy. It is fair to say many of these projects will have seen a severe impairment on the value of those assets. This impairment charge ultimately is balanced out by the loss suffered by investors.

The more worrying aspect is the cash position. A firm running out of cash simply has nowhere to turn to, and there will be few options left for Lendy if it does. There is some irony in Lendy being a lender to those who banks would not touch with a barge pole. Yet on the updated accounts Lendy itself will not be able to secure any finance.

There doesn’t seem any prospect of Lendy making any profits for the y/e 31/12/18. The previous year, although the magic had started to wear off, there were still a decent amount of loans on the platform. In my view the wheels really started to fall off at the start of 2018. Very little business has been done since. So this puts pressure on the bank balance. There have been a few high profile costs such as legalities on their loans. Staff costs ran to £1.7m, so is reasonable to assume this will be similar. With many more loans going bad in 2018, the costs for administering them must be far greater.

There are other whispers which I have heard. The £933k property asset does not feature on the balance sheet any more. And the payoff of a former director was effectively the company buying him out using its own cash. At that time the market valuation of Lendy would have been fairly high.

It may be the case that the cash position has heavily decreased by 31/12/18. But even then that is four months ago and would have gone down further by now. The FCA restriction in my view effectively prevents them from rearranging affairs to suit themselves.

There were plenty of warning signs surrounding the company which increased in number throughout 2018 and are still increasing today (as of now, April’s interest or monthly platform update has not been done).

With the amount of money still at stake this threatens to be several times larger than the Collateral affair.

For those wanting more information I can heavily recommend reading some of the dedicated P2P forums out there such as the independent one ( or Frank (

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