Growth Street Review
How To Make Easy 5.3% Annual Returns Investing In Secured 30 Day Loans! – Growth Street Review
My Lending Experiences & Actual Investment Returns Published Monthly Below.
What is Growth Street?
Growth Street is a medium size Peer to Peer lender. Offering great returns for 30 day lines of credit and invoice financing to businesses throughout the UK.
With an easy to use website, and auto-investing as the only investment option, investors should find Growth Street a good option for storing 30 day accessible cash in a relativity safe investment with a very reasonable rate of return.
My Experience with Growth Street
My Experience so far with Growth Street has been excellent. All you really need to do is deposit the capital, set the auto-invest switch and sit back and relax while your interest is created. When you need to withdraw your money, just disable auto-invest and get your money back within 30 days.
Latest Update 22/3/2020 – My COVID-19 Peer to Peer Lending Strategy – Here’s a post I wrote on my take on the current situation.
One of the things I really liked about Growth Street when I started investing with them was the ability to just “turn off” my reinvestment settings and have capital back within 30 days. I’ve actually used that function a few months ago and it worked like a charm. When I saw the COVID-19 situation turning bad, I decided that I would withdraw all funds from unsecured lenders (Growth Street is not necessarily a fully unsecured lender, however asset security is not as clear and understandable as it is with regular fixed asset lenders like Kuflink, Loanpad, Azzetz Capital or CrowdProperty). So I switched off my reinvestment settings and over the course of a few days I was able to get about £7k out.
On March 19th, 2020, investors received the announcement from Growth Street saying that they would be freezing all withdrawals from the platform and declaring a “Liquidity Event”. This is understandable and was expected to happen with many platforms (and already had with a couple, Assetz Capital was the first). What I really didn’t expect was that they would be “resetting” our investment settings to continue reinvesting our capital into loans, even when the 30 day loans had been paid back. They decided to turn our reinvestment setting back on so repaid funds would be reinvested into loans without our permission. This was in their T&c’s (apparently) but it certainly wasn’t obvious to most folks as there was a big outcry when this happened as you can imagine.
I am so disappointed with the way Growth Street handled this situation that, once I get my remaining capital back (about 13k), I will likely have to consider seriously if I ever invest with them again.
The Obvious Investor – Easy-Info Table© – Growth Street Review
Overall Rating*: (4.2 / 5) Who can invest: Loan Currencies: £ Estimated Return: 5.3% My Actual Return
5.3% My Calculated XIRR: 5.10% Risk Rating*: 3/10 - Low Early Exit: No, but only 30 day loans, so 30 day exit Min. Investment: £10 Deposit Funds: By bank transfer. Usually takes 24 - 48 hours for BACS. Can be same day for Faster payments. Auto-Invest: Yes Manual Invest: No Lending To: Agreement directly with borrowers. Loan Types: Short term (30 day) business credit lines & invoice financing Default Rates: Only 8 defaults to date. Loans Amortize: No. Loans are 30 days. Loan Security: Yes.
Loans secured by property, debentures
or personal guarantees
Provision Fund: Yes Time to Invest: Medium.
Can take a few days depending on loan availability
Time to Mange: None (auto-invest) Lender Fees: No Payments Received: When loan is fully repaid usually (30 days) Amount Lent: £460m + Number of Investors: 2,500+ Loan/Dflt Stats: Yes, Click Here Regulated: Yes: FCA Location: HQ - London, UK. Launched: July 2014 Website: www.growthstreet.co.uk Email: [email protected] Telephone: 0808 123 1231 (UK) IFISA/IRA: See Growth Street for info. Cashback**: Yes! Up to £2,000
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Growth Street – Overview
Growth Street were launched in 2014 in the UK.
In the 5 or so years they have been in business, they have found a niche in the short-term financing business. Providing a very reasonable 5.3% annual return, while only tying your money up for 30 days at a time.
This means, although there is no “quick access” account as there is with lenders such as Assetz Capital, Loanpad, Lending Works, RateSetter or Landbay, you can still always be sure to get your capital back within 30 days if you need it, and get 5.3% annual returns, instead of the 3%-4% offered by the other lenders short term accounts.
Personally I use Growth Street P2P as a store for money I may need in the future which I know I can get access to in 30 days or less. In my opinion, 5.3% interest is very good for an account that you can access in this amount of time.
Although Growth Street statistics are excellent. They haven’t had to deal with a major recession yet so only time will tell how they fair when that happens, but the fact that money is only tied up for is 30 days means if I feel things start to get dicey, I will just stop automatically reinvesting my money and have it all back in 30 days.
Current Growth Street statistics suggest that they have matched a total of £692 million from almost 2,900 investors.
Growth Street P2P are regulated by the UK’s Financial Conduct Authority (FCA) with full permissions under FCA number 739318. They gained FCA permissions in March, 2018.
It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme), so capital is not protected as it would be in a bank.
Opening an account with Growth Street is fairly easy. Just the usual ID checks and anti-money laundering verification.
If they can verify you though one of the UK’s credit agencies, you will be approved quickly. If not, you may need to send them a copy of your passport or driving license, and a utility bill or bank statement.
It should still take no more than 24-48 hours to gain approval.
Residents of most countries can sign up with Growth Street, contact Growth Street for requirements for your specific location.
You will need a UK bank account, and possibly a UK telephone number.
If you don’t have a UK bank account, see my TransferWise Borderless Account review for more information on how it may be possible to get UK banking details even if you’re not a UK resident.
Deposits & Withdrawals – Growth Street Review
Deposits and Withdrawals are made by bank transfer from a UK bank. Debit card deposit is not available.
Deposits from your bank usually show up in your Growth Street account the same or next working day.
Withdrawals go to a registered and verified bank account, and typically take 1 – 3- business days.
Time to Become Invested
It can take a few days to get invested into loans with Growth Street. I’ve found it varies based on the amount of capital I am investing, as well as the loan book. As auto-invest is the only option, it’s just a case of waiting in line for your turn.
Sometimes capital is distributed almost immediately, however other times it has taken a couple of days. I’ve never known it to take more than 2 working days to become fully invested.
You can always see from the main screen dashboard how much is invested and how much is waiting to be invested (Money on market).
Who are we lending to?
Growth Street P2P is a true Peer to Peer Lender platform. Lenders are lending directly to borrowers, who are typically small to medium size British businesses.
Loan agreements are directly between the lender and the borrower. Growth Street just acts as a middle man, managing loans, payments and debt collection etc.
Loan Security – Growth Street Review
Most Growth Street loans are secured by business assets, invoice receivables and/or personal guarantees.
Unfortunately I don’t put much trust in invoice receivables as this is just passing the debt to another company who has the outstanding debt with the borrower.
Personal guarantees can be difficult to collect on (I prefer assets with low LTV’s). However as loans are typically only 30 days long, and there is a well capitalized provision fund. I don’t worry about it too much.
Growth street have had very few (low double-digit) defaults to date. The provision fund has always covered losses on any unpaid loans so far.
As Growth Street loans are typically only for 30 days, the loans don’t amortize as they are paid back in full at the end of the loan term.
Selling Loans and Withdrawing Capital
It is not possible to exit Growth Street loans early. However because loans are typically only for 30 days, you are really only ever 30 days from being able to withdraw all of your capital.
If you set reinvestment to “Do not reinvest” per the screenshot below, you should then be able to gain access to all your capital within 30 days or less.
Once your capital is back in the holding account, you can enter the amount you want to withdraw, and it should then hit your bank within 1 to 3 working days.
Diversification – Growth Street Review
As you can see by my loan list below, when I first started investing with Growth Street, I stuck to my “Prime Directive” and diversified my loans manually.
They do diversify funds for you, however when I originally put my money on the market, I wanted even more diversification. So I manually broke it up in to £100 chunks to ensure diversification between a lot of loans.
Since I first started investing and diversified my loans per the screenshot above, I realized that a key benefit is the Loan Loss Provision Fund.
The Growth Street provision fund is designed to diversify risk automatically for all investors. This is done by collecting contributions from all borrowers, and using those funds to cover missed payments across the whole portfolio; so every investor is exposed to all loans on the platform, rather than just the loans to which they are directly matched.
This means it is not necessary to diversify into many different loans, as a single loan cannot go against a single investor. Now I know how it works, I won’t bother to break up funds as I add them moving forward.
Growth Street say they have had only 8 defaults in the time they have been in business, and they were all covered by their provision fund which is also a good sign that their strategies to protect lenders are working.
IFISA – Tax Free Savings Account
See Growth Street for more information.
Using the Website – Growth Street Review
The website is very easy to use. When you first log in, you see a summary of your account.
There is only one “portfolio” or “option to lend”, so all you do once you’ve deposited funds is “Place a New Order to Lend”.
Enter how much you want to put on market, then hit the “Place Order” button. Simple as that!
It’s a good idea to set your reinvestment options to automatic so you don’t get cash drag when loans are repaid, because all of the principle and interest are paid back in 30 days.
If you don’t have reinvestment set to on, you will need to make sure you are monitoring the website most days to manually place the orders.
It is easy to see which loans you are invested in with the Growth Street website:
It is even possible to drill down and see individual loan agreements if you really want to.
However I don’t really see the point as there is not much information in them, and basically they all look the same.
Summary – Growth Street Review
Growth Street is a simple “set it and forget it” Peer to Peer lender. Their website is easy to use, and their loans are at the lower end of the risk scale.
The return for 30 day loans is very good. Once your funds are in the system, you can forget about them until you need to withdraw, in which case you’ll just need to cancel your reinvest options and wait just 30 days to retrieve your capital. I do check my lender account weekly, but it’s really not needed.
I like Growth Street as a way to have “reachable” capital in a reasonable amount of time, with a decent rate of return.
Thumbs Up Points for Growth Street
Safety – medium size company with a good track record. They make short term loans, some of which are secured against personal guarantees, debentures or business assets. The Provision Fund is also a big plus.
Auto-Invest –very easy to invest, and hands off investing once set up.
Great Rates – 5.3% return for having only a 30 day withdrawal window.
Website – very easy to use and understand.
Large Investments –although Growth Street’s loan book is not as big as some other lenders. They still manage to gobble up large investments fairly well.
Low minimum investment – if your portfolio is still small, it’s still easy to invest with Growth Street. With just a £10 minimum investment to start.
Quick, no cost exit –although there is no “instant exit”, we can be fairly sure that we can get all of our money out in 30 days if we need it in normal market conditions.
Financial Conduct Authority (FCA) Regulated..
Thumbs Down Points for Growth Street
Investment Time – my funds are usually invested in a couple of days. However I have had to wait a little longer for larger amounts of capital. I’ve also noticed a couple of days cash drag on reinvestment at times.
Smaller loan book than some of the bigger players, but still quite significant. Growth Street are growing fast though.
Risk Factor – 3/10 – Low
Is Growth Street Safe? I consider Growth Street to be at the lower end of the risk scale.
Taking in to consideration that many of its loans are secured, the well capitalized provision fund, and the short term nature of their loans. It’s hard not to Growth Street a perfect risk rating. However they are lending to businesses which are inherently more risky then lending to individuals.
I like Growth Street a lot and put a lot of trust in them. As you can see by the TrustPilot review above, so do many other people.
Who Can Invest with Growth Street
Offers & Signup Links**
New Customers receive from £50 – £2,000 cashback when they join Growth Street and invest from £1,000 – £50,000 for 1 year using links here on obviousinvestor.com
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Growth Street Promo Video
Who Are the Best Peer to Peer Lenders In An Economic Downturn? Would You Like A Copy of the Spreadsheet I Use for Tracking P2P Lenders? Disclaimers: * My opinions, reviews, star ratings and risk ratings are based on my personal investing experience with the company being reviewed. These ratings are personal opinions and are subjective. You should do your own research before investing any capital and not base investments solely on the opinions published on this site. ** Some of the links on this website are affiliate referral links. When you click on these links, I can sometimes receive a commission, at absolutely no cost to you. This helps me to continue to offer new reviews and monthly portfolio updates here on my website. I don’t receive commissions from all lenders and it has no effect on my ongoing opinions on lenders. Income on my investments and capital preservation are my main motivations. Platforms reviewed on this website I am currently investing with, or I have invested with in the past. You can see with full transparency on my Lending Returns page which lenders I am invested with (or have previously been invested with) at any point in time. I am not paid a fee by any of the companies to write reviews, so the reviews are unbiased and purely based on my own personal experiences. Please read my full website Disclaimer before making investment decisions.
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* My opinions, reviews, star ratings and risk ratings are based on my personal investing experience with the company being reviewed. These ratings are personal opinions and are subjective. You should do your own research before investing any capital and not base investments solely on the opinions published on this site.
** Some of the links on this website are affiliate referral links. When you click on these links, I can sometimes receive a commission, at absolutely no cost to you. This helps me to continue to offer new reviews and monthly portfolio updates here on my website. I don’t receive commissions from all lenders and it has no effect on my ongoing opinions on lenders. Income on my investments and capital preservation are my main motivations.
Platforms reviewed on this website I am currently investing with, or I have invested with in the past. You can see with full transparency on my Lending Returns page which lenders I am invested with (or have previously been invested with) at any point in time. I am not paid a fee by any of the companies to write reviews, so the reviews are unbiased and purely based on my own personal experiences.
Please read my full website Disclaimer before making investment decisions.