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Saving For a Space Ship

Government-backed Start Up Loan default rates reach 50%  

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Government-backed Start Up Loan default rates reach 50%  

http://www.ukbusinessforums.co.uk/articles/government-backed-start-up-loan-default-rates-reach-50.654/

Quote

Data obtained from the British Business Bank via a Freedom of Information (FOI) request shows that 49.6% of loans generated in the 2013-14 financial year are in default (this means three or more payments have been missed). ..

I wonder how they got the default rate to drop in later years ? Where the debtors putting it on a bank loan or cc, so they could make payments  ? 

Quote

  Origination  

  Number  

  Value of loans  

  Share in default  

 2012-13

 1,820

 £9,631,751

 45.70%

 2013-14

 12,628

 £69,840,358

 49.60%

 2014-15

 13,488

 £66,525,878

 32.80%

 2015-16

 9,141

 £64,111,534

 18.90%

 2016-17*

 8,541

 £81,979,030

 4.00%

*Figures for 2016-17 are latest to 28 February 2017 (so if at same rate of 2% a month, annual figures would be 24% for 2016-17 - 1/2 of 2013/14

 

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4 minutes ago, Saving For a Space Ship said:

I wonder how they got the default rate to drop in later years ?

"However, due to the difficulty of establishing a sustainable business and the support of the loan itself, it can take time for a borrower to default, meaning the share of loans in default for more recent years is likely to increase"

...time will tell!?

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“The default rates are really high and they don’t even show the real picture of what is going on out there. They don’t even include the people whose businesses fail but then they take a job to pay back the loan,”

...Gulp!

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if my Funding Circle account is anything to go by the new businesses start okay then start failing after three years or so...so this looks about right - although my experience is defaults not as high as this....I really reduced my exposure a few years ago.  By the time they really start to struggle they have paid back a large proportion in many cases.

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