Crowdstacker take another hit as Authentic AleHouses calls in the administrators with a £6.4m oustanding P2P loan

So following the disaster with Burning Night, Crowdstacker investors are now facing a £6.4m hole as Authentic Alehouses collapses. And AA were set up by the same team as Burning Night.

P2P lending is taking a bit of a battering. We will have to see what the administrator can achieve on this case.

AA took out 8 separate loans via Crowdstacker in October 2018 (see comment below) - so a little over 4 months ago. It now looks as though this money is at risk. We are not really sure how they managed that.

P2P lending sector starts to unravel. Havent we been here before?

With news that Crowdstacker have outstanding loans with Amicus Finance, now in administration, coming hard on the heals of their loans with BurningNight, also in administration, looking likely to fail, Seedrs investors in Crowdstacker must be a little worried.

If there is one thing P2P lending platforms hate, it's loan defaults. One is unfortunate but two side by side is careless. How many more out there are waiting to go?

Seedr's investors put £800k into Crowdstacker - one of the UKs leading P2P companies - in July last year. Now, with two large partial defaults on outstanding loans totalling £4m and £7.5m, Crowdstacker doesnt look quite so appetising. 

According to some good research from the Times, Crowdstacker was also borrowing money from Amicus, as well as lending to it. Here

Calls for better regulation and more transparency in the P2P and equity crowdfunding sectors, led mainly by private investors, have fallen on deaf ears so far. Is that about to change? Or will it take another train wreck like 2008 to get some reaction. Seriously, when will we learn. 

We wrote about Crowdstacker here. The Amicus administration has not yet filed relevant documents but the latest on Burningnight suggests that only a fraction of the 'secured' £7.5m loan will be repaid.  

Bar operator Burningnights to be bought out of administration possibly saving some of the Crowds £7.5m

Following our story of the administration in October 18 of Burningnight, light appears at the end of the tunnel, as a northern based restructuring company, Access Commercial Finance, has offered to buy some of the failed group out of administration.

We do not know yet what price has been paid, so 960 odd Crowdstacker investors will have to wait a little longer to see how much of their £7.5m is recoverable. 

Our October piece is here

The rest of the creditors are unlikely to see anything and if you believe the sums listed on the administrators report, that means losses for them, north of £2m. 

All round a bit of a disaster. 

Burning Night, the Bierkellar operator, has been placed into Administration by its P2P loan company Crowdstacker

BurningNight Ltd raised £7.5m via a P2P loan with Crowdstacker at the start of 2017. With a healthy 7% interest and short term of just 3 years, the rewards were almost too good to be true.

Well.....they were. 

For reasons as yet undisclosed (but fairly obvious) Crowdstacker has, as their major secured creditor, pulled the plug and emptied all barrels. Their hope is that the venues can be sold on, to recoup the debt. 

The sounds of the Oompah Oompah band will be no longer.

Writing about the opportunity at the time of the raise, the CEO stated -

“When we initially approached Crowdstacker it was because we wanted to choose a way of financing our expansion that would allow our existing loyal customers as well as new potential customers and investors to participate in our growth.  

“It has proven to be very popular with investors, and mutually beneficial to all, so it makes sense to extend this source of funding.”

Maybe customers wont be thanking him for much now. I think it is more likely that the banks said no and everyone else said no.

It does seem a little curious that this company was able to raise £7.5m so easily  - its initial target was £3.5m but it then doubled that. What real DD was done by Crowdstacker has to be questioned. If they did do their job, then someone there needs firing. 

These P2P loans are supposed to go to established companies with relatively solid foundations. Not flighty doubtful operators. 

Hopefully it will all end well.