3 November, 2016

Saving Stream Default 2016: Update

NB: Content updated 1st March 2017

Saving Stream sent an email to investors informing those who had deposited capital in loan PBL020, a defaulted loan from 2016, that all capital had been returned, as well as accrued interest.

Below is a quote from Saving Stream, and further below, a timeline of the default published 3rd November 2016.

We would like to announce that yesterday we fully repaid one of our long term defaulted loans (PBL020) for £1.7m plus c£147k of interest that had accrued during the default period.

In May of this year peer-to-peer lending platorm, Saving Stream (trading name of Lendy Ltd), suffered its second default since launching in 2013. It’s been a hot topic with retail investors ever since as it is still unknown if investors’ capital will be recovered.

The first default, on a loan under £200,000, was recovered within three months and saw all capital and interest returned to investors. An impressive resolve from the property lending platform and a strong signal to naysayers that peer-to-peer lending recovery processes do work.

The assets securing the second defaulted loan (ref: PBL020) - a £1.7million loan - have not been sold and investors are still exposed to this default. To provide clarity for investors in the loan, we delineate the default including events leading up to the default which may affect how investors’ capital and interest are repaid.

PBL020 Loan Details

For more details on the loan particulars, visit: 'Saving Stream experiences second default'. Otherwise continue on for loan overview.


The bridging loan was approved in December 2014 so that an entrepreneur could purchase property and land in Hampshire and develop the existing garden centre into a tourist centre and local hub.

  • Land with full planning for redevelopment.
  • Agricultural land.
  • Residential property.
  • Bricks and mortar assets on commercial buildings.
  • Business.

Key loan stats

Value:                            £1.7million

Security:                       £2.43million (asset includes land, property and business)

Term:                            6 monthsLoan-To-Value (LTV):  70%

Retail investors:         1,103

The asset securing the loan was originally valued at £2.43m, providing investors with a 70% LTV comfort.  Since the loan was sanctioned, the asset has been re-valued at £1.2m - £1.5m.

Timeline of PBL020 Default Events

Here is a chronology of important events from loan issuance to point of default, including the change of Saving Stream Terms & Conditions, which bears significance to investors in the loan and will be discussed further below.

December 2014:

PBL020 loan launched on Saving Stream.

February 2015:

PBL020 loan drawn down.

Borrower purchases land and runs operations at the site while awaiting planning permission for their development plans.

September 2015:

‘General Update’ sent to investors informing of change to Terms & Conditions.

March 2016:

Planning for log cabins, as part of PBL020 site redevelopment, not approved by planning committee.

May 25th 2016:

Opus LLP appointed as administrator to recover the loan.

May 28th 2016:

Loan goes into default.

June 2016:

Garden Centre (site) operating with the administrator and making profit.

July 2016:

Planning department engaged with to identify uses for site to make it more appealing to buyers.

August 2016:

Offer received for nearly full amount of outstanding Saving Stream loan. Offer accepted, but reliant on the purchaser receiving a bank mortgage.

September 2016:

Sale progressing with lawyers.

October 2016:

Buyer who placed offer in August pulls out.

October 2016:

Offers being received for between £1.2million and £1.5million. A tenant is looking to take over the site and will pay rent over the Christmas period with a view to purchasing in the new year. All options are still on the table.

Investors’ capital is exposed to loss until either the site is sold for at least the loan size of £1.7m or the provision fund steps in to cover investor’ capital. It is unclear what the true value of the site is and when it will be sold.

Saving Stream Ts&Cs Change (Sept 2015)

As highlighted in the timeline of events, Saving Stream changing its Ts&Cs affects investors in the PBL020 loan.

Four important points to note from the Saving Stream ‘General Update’ sent to investors in September 2015:

1. Saving Stream becomes true “peer to peer” for compliance purposes

Under new Terms (Sep 2015), investors lend to borrowers directly, bearing full credit risk. Under old Terms, investors lent to Lendy Ltd, who then lent to borrowers, meaning Lendy Ltd would be exposed to the borrower defaulting. Loan PBL020 was issued under the old T&Cs, where Lendy Ltd would bear the credit risk and Lendy Ltd would be responsible for repaying investors.

Now you are lending to the Borrower directly (via SSSH Ltd), Lendy Ltd no longer have any legal responsibility for covering any shortfalls. Lendy Ltd will return to the Lenders whatever is returned following disposal of the asset. Any shortfall should technically be absorbed by the Lender as a normal part of business. - Saving Stream Ts&Cs update Sep 2015

It is not explicitly clear if the old or new T&C’s govern loan PBL020.