4 tips to survive the turbulence in the peer to peer lending industry
Very few industries are immune to all forms of economic strife and the peer to peer lending market is no different. Recent IPOs have reduced in value and throughout all providers, there is a lack of liquidity in the p2p loan market.
But what does this mean for lenders and loanees who are currently relying on the industry providers for their savings and small business loans? Here are some tips to manage the upcoming turbulence in peer to peer lending industry.
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If you’re entering the market P2P market, diversify within and across platforms
We are all told to diversify our investments, and the same sentiment rings true for peer to peer lending. Try and find providers that allow you to spread the loan principal across many different businesses; this will increase your portfolio’s resistance to bad debt and defaults.
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Be prepared for long withdrawal times
As stated there is currently a lack of demand in the p2p market. This means if you are selling loan parts you will experience longer waiting times. If you are at all concerned with the time it is taking to get your loan principal and interest back make sure you get in contact with your p2p provider.
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Plan how your peer to peer investments for upcoming Brexit disruptions
Investment markets always react badly to uncertainty, and with the future relationship between the UK and EU still not clear peer to peer lenders have started to pull their funds out of the market. Completing regular checks on the status of your investments is crucial to ensuring you are not left out of pocket.
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Seek advice if you are unsure what your next move should be
Whenever you are unsure about how to manage your portfolio make sure you do your research and get in contact with an expert. This is one of the first tests of the peer to peer lending market so you would be wise to monitor the situation closely.
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