Confidence in a lender’s ability to deliver the promised funds is crucial in winning the trust of intermediaries, brokers say, after a peer-to-peer lender admitted issues with investors backing out of deals.

Peer-to-peer firm Lendy said last week that it had seen an increase in the number of investors on its platform failing to honour pledges.

Lendy allows investors to pre-fund bridging and development finance loans before launch in order to guarantee an allocation.

It announced that from now on investors need to fund their accounts 24 hours before launch rather than 48 hours.

In an email to investors it said: “While the majority of investors fund their accounts in a timely manner, we have seen a growing number of investors not honouring their pre-fund selections, which impacts all investors.”

Manchester Money Commercial head of commercial Adele Turton says that she “can’t risk a client’s transaction with a lender who can’t perform”, adding that she has dealt with other peer-to-peer lenders who appear very keen but before long “the cracks start to show”.

“Ultimately if the investors aren’t providing their funds that will start to impact them. We wouldn’t be representing the client’s best interests by using a lender who was struggling with funding,” she adds.

He adds: “However, in our experience we do understand that no matter how big or small the lender is, there are sometimes funding line issues that affect either the appetite or ability for a lender to provide funds.”

Brightstar chief executive officer Rob Jupp says that as short-term lending is at the stronger end of the risk curve it is vital to ensure that you only deal with lenders who are fit and proper, with the right experience.

He adds: “The main peer-to-peer lenders are so well funded – it’s not just from individuals, but from institutional investors – that they aren’t anything to worry about.

“A lot of lenders now are getting funding in some way through peer-to-peer, and that makes sense as part of a broad church of funding strategies.”