Alternative business lending platform Growth Street has announced it will effect a solvent wind down of the business once its Resolution Event is complete.
The decision has been made by the Growth Street Board, with the support of the executive team and major shareholders.
The London company’s tech included its GrowthLine product, which was powered by Open Banking and cloud accounting integrations.
Last year the platform raised £7.5m in a scale-up investment round to boost its loans for smalls firms preparing for Brexit.
In March of this year the firm said it had seen a larger than usual volume of investor funds set to not reinvest as a result of COVID-19, and called a Liquidity Event.
It said its focus is now to support its borrowers to find alternative sources of finance while ensuring that funds are returned to its investors.
“The onset of COVID-19 presented numerous challenges for our business. We worked hard to find solutions which would allow us to emerge from the Resolution Event a stronger, more competitive business but unfortunately, we weren’t able to get there,” explained Kim Goetzke, COO at Growth Street.
Growth Street will retain a core team during the wind down period to ensure it proceeds effectively.
Expected time frames and quantity of repayments to investors will be unaffected by the wind-down.
Goetzke continued: “It is with deep regret that we have taken the decision to begin a solvent wind down of the business once the Resolution Event is complete. This is not a decision which we have taken lightly.
“We believe passionately in Growth Street as a business and we will make every effort to ensure that the impact to our investors and our borrowers is minimal. Our team will continue to work tirelessly to return funds to our investors.
“We assessed all of our realistic options, including having discussions with our shareholders and other institutions to find a solution that would enable us to build an economically viable business going forward whilst allowing us to offer a market leading proposition for our customers.
“Unfortunately, it wasn’t possible in the current environment to put together the package of equity investment and institutional funding necessary to continue the business.
“To those leaving the business, we will help you in every way we can.”