Peer-to-peer lenders have come under huge pressure due to the shortage of investors willing to lend and fears of defaults.
Ratesetter was recently sold to Metro Bank for an initial £2.6 million despite analysts’ earlier claims that it could be worth £50 million.
The loss was narrower than the previous year’s £547,000, she said.
Horlick said she had switched from unsecured peer-to-peer lending after becoming concerned about the economy after the Brexit referendum.
Covid had made her ever more convinced of the risks, as a large amount of money had simply been lost for businesses for ever.
“Just because you didn’t have a haircut for six months because of lockdown doesn’t mean you’re going to have three haircuts now,” she said. “That business for the hairdresser has gone.”
She said the government Covid lending schemes, while welcome, had made the situation even riskier as most deserving businesses had already raised money, leaving only the riskiest ones still seeking loans.
She said it was likely many borrowers would struggle to repay the loans to the government, recommending the Chancellor consider setting up an agency to convert them to equity instead of demanding impossible repayments.
