Yesterday Folk2Folk became the lastest peer-to-peer lending platform to obtain full FCA authorisation. The company will also be applying to the HMRC to offer an Innovative Finance ISA.
Here is their full press release:
Folk2Folk, one of the UK’s fastest growing peer-to-peer business lenders has today been awarded its full FCA authorisation for peer-to-peer lending. Folk2Folk having lent over £125m since launching in 2013 is now delighted to be the UK’s largest fully authorised P2P lending platform, matching individual business borrowers to individual lenders secured on property.
The South-West based business was given its full FCA authorisation ahead of a number of industry competitors including the big three.
Gaining full FCA authorisation is a major milestone for Folk2Folk as a business. By being fully FCA authorised, Folk2Folk can now look to offer the Innovative Finance ISA (IFISA) to customers in due course, subject to HMRC approval.
Jane Dumeresque, Folk2Folk CEO said, “We are delighted that the FCA has granted Folk2Folk its full authorisation for peer-to-peer lending. We see this as a significant milestone for Folk2Folk as a P2P lending business. This decision is significant as it makes us eligible to offer our IFISA before the end of this tax year. I think it speaks volumes about Folk2Folk as a business having gained its full FCA authorisation ahead of many of the industry’s leading and larger platforms. We believe this will act as a positive sign to investors as well as business professionals that are looking to partner with a trusted and fully authorised platform like Folk2Folk.”
Jane Dumeresque added, “Our mission is to help local businesses get access to the finance they need by matching them to local investors in a quick, simple and easy process. Folk2Folk remains a business of the people, for the people by the people and is proud to be a national lender that operates locally. By establishing a local presence in strategic regions across the UK through our unique branch network, we can encourage the local community to invest through Folk2Folk to help local business owners prosper and thrive. We believe it’s always more interesting and reassuring when an investor can see what exciting projects their money is supporting.”
Folk2Folk works closely with business professionals such as lawyers, accountants and bankers across the UK and by becoming fully authorised by the FCA it is expected that this accreditation will encourage more professional services to work in partnership with Folk2Folk to assist their clients with alternative forms of finance and investment options.
Folk2Folk on a national level specialises in local secured lending for businesses. Folk2Folk enables local business to achieve their business goals and grow by matching local and rural businesses looking for finance with local investors looking for a great return. Interest costs to the borrower (before fees) and investment returns to the investor range from 5.5% to 6.5% based on the LTV of the property which acts as a security against the loan and other criteria.
Money&Co have contacted lenders to offer a new portfolio service. The portfolio service will manage a lender's loan portfolio for a 1% fee, but if lenders sign-up by the end of the year they will receive a cheque for £1000. To take advantage of the service lenders require a minimum £100,000 investment.
Given that there have only been 23 loans on Money&Co, including one currently open loan, and contrasting that to 25,511 loans arranged on Funding Circle, the value of the service could be uncertain.
Here is the email sent to lenders:
The Money&Co. Portfolio Service
We are writing to tell you about a special Christmas offer. If you sign up for a Money&Co. Portfolio Service account before 31st December, we will send you a cheque for £1,000.
The Money&Co. Portfolio Service has a minimum investment level of £100,000. If you sign up, a fund manager will manage your loan portfolio for you at no extra cost. The normal lender fee is 1% per annum. If you have no specific requirements, we will ensure that there is a spread of loans in your portfolio across all the risk ratings. You can choose to have interest paid out monthly or we can reinvest money coming back from your loan portfolio into new loans.
If you would like to know more about the service, please email us. Remember, if you sign up before Christmas, we will send you a cheque for £1,000.
The world's first peer-to-peer lending platform Zopa has rebranded itself today. The new Zopa colour scheme is teal, dark blue, and red. The logo is remarkably similar to that of Landbay without the border. This is the first major rebrand of Zopa which launched in 2005 with a dynamic logo, but dropped this in 2008 for a static logo.
Initial reactions were mixed on the P2P Independent Forum, with one lender writing:
Is it actually as bad as I think it is? Or am I simply reacting badly because I am unused to it?
Another lender wrote in reply:
No, it is worse. Presumably they got in some 14 year old wanne be hipster consultant rather than a grown up for the design. I expect it might appeal to day-time TV watching potential borrowers though.
There were a number of noticeable errors on the website with broken links and words overlapping!
Here is the email send to lenders this morning:
We're thrilled to unveil our brand new look.
We're on an exciting journey to offer a wider range of products: and we wanted to update our look and feel to reflect who we are and what we offer, now and in the future.
This fresh new identity will give us a springboard for our plans to bring our products to even more people in the UK, and create radically personalised services that will help them fully realise their financial potential.
While a lot has changed – a bold new logo, icons, and tone of voice – our products still work in exactly the same way.
You can read more about these changes on our blog.
We want to hear from you: if you have any feedback on the new look Zopa, let us know.
Further reactions and comments coming up...
A new peer-to-peer lending platform LandlordInvest has launched today after obtaining full permission from the FCA. LandlordInvest has now applied to become an ISA manager in order to offer Innovative Finance ISAs. The time taken to obtain the necessary permission from the FCA highlights a issues with the current application and approval process.
Here is the full press release:
LandlordInvest (www.landlordinvest.com), a marketplace lending platform for buy-to-let and bridging loans, gains full FCA Authorisation after a 24 months application process.
Being fully FCA authorised, LandlordInvest has submitted an application to HMRC to become an ISA manager to be able to offer the Innovative Finance Individual Savings Account (“IFISA”). Currently, only a handful peer-to-peer lending platforms are able to offer the IFISA as only fully FCA authorised platforms, that have been approved by the HMRC as ISA manager, may do so.
The Company expects to receive a green light from the HMRC over the next few weeks and will offer the IFISA directly through its lending platform.
Filip Karadaghi, LandlordInvest’s Chief Executive said: “We have after a long and rigorous process finally been authorised by the FCA. We are delighted to have reached this important milestone, ahead of many larger peer-to-peer lending platforms, that are still operating under an interim permission. Full FCA authorisation means that we have proved to the regulator that we are able to meet its high threshold standards and have the appropriate regulatory and operational infrastructure in place.
Our next milestone is to be able to offer the IFISA, which we believe will benefit savers given the low interest rate environment and low returns. Indeed, we will be looking to offer tax-free returns between 5-10% per annum with our IFSA. In addition to higher potential returns, the IFISA is a valuable addition in a diversified portfolio, especially if it is not correlated with the stock markets, which our IFISA would not be.”
Zopa have announced that they are not accepting new money transfers into the platform. An email was sent to all lenders this morning stating that due to current volumes of new money, combined with an expected seasonal fall in borrower demand, there will be a platform limit for new money.
With classic peer-to-peer lending, as supply remains constant and demand falls off, lending and borrowing rates would normally fall, and Zopa has reduced rates several times over the last few months. Zopa has taken the decision to also reduce the supply by preventing new money from entering the platform. Existing money from borrower repayments would be unaffected, and would continue to be relent as previously.
The email sent to lenders is as follows:
We always aim to lend your money out in a reasonable time. However, with current volumes of new money transfers combined with demands for loans seasonally declining in December, we don’t expect this to be achievable this month.
We are committed to the risk and underwriting strategies that have served us well for more than 11 years and will not compromise our high standard of borrower to increase loan disbursals. This has led us to introduce a platform limit for new money into the platform so we can aim to lend out your money in an acceptable time.
What does this mean for you?
Throughout December, we will monitor the levels of new money. When necessary, we'll stop all inbound transfers while we disburse the new funds already in the queue.
Currently, the time to lend new money is projected to be slow, so we are not accepting new money transfers. You can check your Weekly Update email and live tracker in My Zopa for the latest information. We recommend you log in to My Zopa and check the tracker before making a transfer.
Money you have already lent out and set to relend will continue as before, keeping your existing money earning. This limit only affects new money into the platform: not your repayments and funds in your holding account.
What happens if I transfer money when the limit is in place?
We'll return your most recent transfer and advise you of your refund by email.
What will happen after December?
We want to be able to lend your money in a reasonable time. If upcoming months are projected to have longer lending speeds, we’ll activate the platform limit. We will keep you informed about the platform limit via the Weekly Update email and your My Zopa dashboard.
You can find more detail in the FAQ section below, and as always, our Customer Services team are on hand.
Q: Why have the queues been increasing?
The queues have been increasing because Zopa has grown its investor base both in terms of new investors and total funds from investors. This growth has outpaced the growth of new loans. It is important to note that we have strict lending principles and will only lend to those who meet our risk criteria.
Q: What about existing money and repayments?
The platform limit only affects new money; repayments, and money already in the platform are not affected.
Q: Why can’t I just queue for longer?
We believe money should be simple and fair. We don’t think it’s fair for you to wait too long to lend out your money.
Q: How long does is usually take to start lending new money?
Since January 2016, the average time to start lending new money has been 5 days.
Q: What will happen when ISAs are launched?
We don’t yet have approval to be able to offer ISAs, when we know more we will give you an update.
Q: What happens for institutional investors?
Our current ratio of institutional and retail investments will stay the same.
Q: If my funds are returned, how long will it take?
We refund money by BACS, which typically takes 3 business days, depending on your bank.
Q: How long does it take Zopa to recognise that my funds need to be returned?
As soon as we receive your transaction, we will know that your funds need to be refunded. We will let you know via email and begin the refund process immediately.
There is a message when lenders login as follows:
We are not accepting new money transfers
We have a limit for new money into the platform so that we can aim to lend out your money in a reasonable time. This limit only affects new money into the platform: not your repayments or funds already in your holding account. Read more.
Any new money transfers into the platform will be refunded directly to your bank account.
Check the Weekly Lender for updates about the platform limit.