P2p lending platform RateSetter has dropped unsecured commercial lending and refined its product offerings to businesses on a secured lending basis.

For businesses, it now offers hire purchase as an asset-backed product, and development and investment loans as property-backed.

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The business hire purchase product was launched in July 2017, in collaboration with Corporate Asset Finance.

A spokesman for the company, which also provides consumer and motor finance products, confirmed to Leasing Life that they will continue to operate in unsecured consumer lending.

RateSetter has now stopped accepting new unsecured business loan applications, and will finish processing existing applications. The company specified that the unsecured business proposition was performing in line with expectations, and will continue to repay lenders within schedule.

Lewis said: “By simplifying our commercial finance product offering and focusing our resources on lending secured on property and other tangible assets, we have a clear framework around which to grow our commercial finance volumes and continue to deliver access to healthy returns to investors.”

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Ratesetter has had to back £48m of problematic loans itself over the past year. This included motor finance provider Vehicle Trading Group, which suffered financial difficulties and was unable to repay a £12m (€10.5m) wholesale finance facility from the platform.

RateSetter subsequently decided to acquire Vehicle Trading Group and absorb the debt to protect its investors. The impairment pushed the company’s 2016-2017 results to a pre-tax loss of £23m, despite substantial revenue growth.

At the time, RateSetter chief executive officer, Rhydian Lewis said: “During the year [2017], we decided to focus on higher quality credit. Our view is that durability through a cycle is the key test and, while lower quality credit is still valid, it is clearly more vulnerable in a downturn.”