The pawn-come-property secured lender Collateral has gone into administration.

Late last night I received an ambiguous email from Collateral:

Dear Investor,
Please click on the Investor Letter below for an update on Collateral UK Ltd.
Investor Letter

Many thanks,

The Collateral Team

Rather than a phishing scam, it turns out the link was actually a letter from Administrators giving formal notice of their appointment. I immediately went to the website, www.collateraluk.com, to see if I could at least withdraw my cash balance, but this is currently down:

I’m not going to speculate on this because I don’t know enough. I am invested in loans on Collateral, but from what I’ve read today, I’m not overly worried that I will loose much (if anything). I feel more the inconvenience/uncertainty of having money tied up for an indeterminate length than actually losing it.

Today I’ve had reassuring investor emails from MoneyThing (‘MT Stability and Commitment to Lenders’) and Ablrate. They are perhaps worried that burnt investors will lose confidence in P2P lending in general.

So what will happen to Collateral?

• Will the best bits be sold off to another platform(s)?
• Will they find some way to make amends with FCA and come back?
• If the administrators/ a third party manage a run-down of the loan book, will this third party take any cut of investor interest/capital?
• Are there any other dominoes to follow Collateral?

More informed links

• Financial Times: Peer-to-peer lender Collateral enters administration
• Citywire: Peer-to-peer lender Collateral falls into administration
• P2P Finance News: P2P lender Collateral goes into administration
• P2P Banking: Collateral UK in Adminstration – a Summary for Investors
• P2P Independent Forum Thread (currently 19 pages long)
• Money Saving Expert Forum