Wellesley & Co suspend P2P lending

May 26th, 2017
Wellesley & Co.

Wellesley & Co have announced that they are suspending peer-to-peer lending on the platform. The reason for this is likely due to pressure from the FCA to change their business model.

Below is a copy of the email sent to lenders:

As we progress towards full authorisation by the Financial Conduct Authority (FCA), we are making some changes to our product range over the coming months. We want to make sure that you are aware of the changes and whether these will affect you.

From 31st May 2017, Wellesley & Co will not be accepting any additional investment into the existing Peer-to-Peer Lending products and we will be launching a new Peer-to-Peer lending product in Q3 which will offer different features for customers. The new Peer-to-Peer lending product will no longer provide a fixed rate of interest with a fixed term period. This period will allow us to continue to work behind the scenes on developing the new product and bring it to market. The new Peer-to-Peer lending product will no longer provide a fixed rate of interest with a fixed term period.

How does this affect existing Peer-to-Peer investments?

As a Wellesley & Co customer, any existing Peer-to-Peer lending investment will remain under its current terms until its contractual maturity. This means that it does not affect your existing investments and you do not have to take any action on your account.

It is important to note the features of the new products as they will be different to your existing Peer-to-Peer lending investment.

Over the coming months, we will be developing our systems and portal in order to continue providing access to investments from Wellesley Group companies that offer you, the opportunity to invest your funds for attractive returns.

Zopa ISA and Zopa Core

May 26th, 2017
Zopa

Zopa have annouced that their Innovative Finance ISA is to be launched on 15th June, pending final approval from HMRC, with priority given to existing customers.  The target return for the ISA is predicted to be up to 6.1% AER.

At the same time Zopa will be launching a new product called "Zopa Core" which will replace Zopa Access and Zopa Classic.  Unlike the products it is replacing Zopa Core will no longer be covered by the safeguard fund which was launched 3 years ago.  Zopa Access and Zopa Classic will be retired for existing customers on 1st December.  The target return for Zopa Core is 3.9% AER after expected bad debts and fees.

Here is the full statement on the Zopa blog:

Following on from our FCA authorisation, I wanted to write to explain what happens next and some important changes we’re making to our service.

Introducing our IFISA

Pending final approval from HMRC, we’re excited to announce our flexible Innovative Finance ISA (IFISA) – with target returns of up to 6.1% – will be available from 15th June.

As we expect investing volumes to be high, we’re giving existing investors priority access ahead of new customers, where existing investors are those customers who have already signed up as an investor today.

Introducing Zopa Core

In addition to our IFISA, on 15th June we’re excited to let you know we will also launch our newest peer-to-peer investment product: Zopa Core. Core will lend in risk markets A*-C and will, by December 2017, replace Access and Classic. As with Classic and Plus, there will be a 1% fee when selling loans.

Core will offer initial target returns of 3.9%, and will not be covered by the Safeguard fund. Classic and Access will not be available for investors currently on the waiting list or future investors, however current investors with loans in Access or Classic can continue to lend through these products until 1st December, 2017 when they will be retired.

From launch, investors will be able to send Access and / or Classic repayments into Core, and add new funds. Core, like Plus, will have a minimum investment of £1,000 to diversify your risk: this will be waived for existing customers moving their repayments across, but it’s important to remember that those customers with a waived minimum will have more than 1% exposure to each borrower and will have a higher chance of losing money.

What happens next

Retiring Access and Classic

We are retiring Access and Classic from 1st December 2017, which means we will no longer be originating loans with Safeguard coverage after this date. All existing Safeguarded loans will continue to receive coverage (subject to there being sufficient funds in the trust) until December 1st, 2022, by which time all Safeguarded loans will have matured.

We initially introduced Safeguard in 2013 to deal with a tax anomaly that unfairly penalised peer-to-peer lenders. The fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers: and not bad debt. In 2015 the tax laws were updated enabling investors to claim for relief on losses from bad debt. As a result, the primary reason for Safeguard was removed.

Last year, based on customer demand, we introduced Zopa Plus, our current product without Safeguard coverage. Plus has proven incredibly popular, and since March 2017 we have been operating a waiting list for new investors due to the very high levels of demand. Retiring Safeguard will allow us to provide greater target returns than Access or Classic (2.9% and 3.7% respectively, versus 3.9% in Core and 6.1% in Plus).

Remember: when you invest your money, your capital is at risk and is not protected by the Financial Services Compensation Scheme (FSCS). Our risk statement has all the details.

If you have any questions, please get in touch with our award-winning Investor Services team.

ArchOver obtain full FCA authorisation

May 25th, 2017
ArchOver

ArchOver have announced they have received full authorisation from the FCA, a day after Funding Circle.

Below is a copy of the email sent to customers:

We are pleased to announce that ArchOver has secured full authorisation from the Financial Conduct Authority (FCA).

To date, we have facilitated over £35 million of investment through the ArchOver platform, operating under interim permissions granted by the FCA.

Lending via the ArchOver platform continues as normal. Lender security remains our primary focus, alongside the ability to help fund UK SMEs by offering suitable and reliable lending against a company’s assets. Receiving approval is a testament to the quality and credibility of our platform, procedures and recovery processes, and will allow us to continue to accelerate our growth plans and deliver more projects to the platform.

For those of you that may have been waiting for full authorisation before lending across our platform, we encourage you to log in to view the latest ‘Secured & Insured’ project which is offering 6.5% p.a.

If you have any questions please contact us.

Below is a copy of the press release:

ArchOver, the peer-to-peer (P2P) business lending platform, has secured full authorisation from the Financial Conduct Authority (FCA) to operate as a P2P lending platform (Article 36H). Since launching in September 2014, ArchOver has facilitated over £35 million of investment over its platform, operating under interim permissions granted by the FCA. Full authorisation will support ArchOver in attracting new lenders to the platform and allow it to continue working with businesses to make access to funding as easy and simple as possible.

“There is great satisfaction in gaining a stamp of approval. Our industry leading policies and procedures will allow us to take alternative forms of lending to the next level,” commented Angus Dent, CEO at ArchOver. “At a time when investors are experiencing low interest rates and banks are tightening the purse-strings, P2P lending offers a unique and much needed service. Incorporating the most successful elements of P2P lending into the regulations and strategy of the FCA is critical to raising awareness and protecting the long-term success of the industry.”

As a fully authorised P2P lending platform, ArchOver can operate on a level regulatory playing field and focus on expanding its community of investors to achieve its ambition of facilitating £500 million of lending within the next five years. With no borrower defaults, late payments or losses in nearly three years of operations, ArchOver delivers an above-industry-average return of 7.24% to investors.

Backed by the Hampden Group, ArchOver has developed two asset-based lending services allowing UK SME’s to borrow against Accounts Receivable and/or recurring contracted revenue. Its experienced management and credit team carefully vet borrowers and monitor the performance of businesses and assets every month. ArchOver also partners with Coface, the world-leading provider of credit insurance and debt recovery services, to offer additional security.

“From the first day of operations, we’ve placed lender security at the heart of our business model to exceed any potential compliance requirements,” commented Ian Anderson, Chief Operating Officer at ArchOver, who has been closely involved in the authorisation process with the FCA. “This attitude meant we have not had to change our primary working practices in order to comply with regulation. While we have waited a long time to gain this recognition, we always believed that it was in the best interests of ArchOver, and the sector in general, that the FCA take the necessary time to ensure the process was thorough and fair.”

Funding Circle obtain full FCA authorisation

May 24th, 2017
Funding Circle

Funding Circle has announced it has received full authorsiation from the FCA, two weeks after Zopa.

Below is a copy of the email sent to customers:

We are very pleased to to announce that Funding Circle has today received full authorisation from the FCA.

The news comes as we become the largest UK platform (having overtaken Zopa last week in terms of total lending).

There are now over 60,000 retail investors lending directly to small businesses through Funding Circle. Since launching in 2010, they have earned an average return of 6.5% per year and a total of £116 million in net interest.

To manage risk, investors lend small amounts to hundreds of different businesses, all of whom are first assessed by an experienced credit team. Investors also have the option to access money early by selling loan parts to other investors on Funding Circle’s secondary market.

Please get in touch if of interest.

Below is a copy of the press release:

Funding Circle, the world’s leading direct lending platform for small businesses, has today become fully authorised by the Financial Conduct Authority.

Launched in 2010, Funding Circle allows people and organisations to lend to small businesses, offering investors attractive and stable returns whilst supporting the backbone of the British economy.

By bringing together industry leading risk management and cutting edge technology, investors have earned an average 6.5% per year* and £116 million of net interest over the last seven years.

The news puts Funding Circle in a position to be able to launch an Innovative Finance ISA, subject to approval by HMRC.

James Meekings, UK Managing Director and co-founder said: “Our vision is to support thousands of people across the UK to earn stable, industry leading returns by lending directly to small businesses. With more than 60,000 investors now regularly lending through Funding Circle, we are on track to becoming a mainstream investment choice for investors up and down the country.”

Funding Circle facilitates lending to small businesses from a wide range of investors including 60,000 individuals, local authorities, the UK government-owned British Business Bank, the European Investment Bank and financial institutions such as pension funds. Investors have now lent more than £2.3 billion to over 24,000 businesses.

Zopa obtain full FCA authorisation

May 11th, 2017
Zopa

The world's first peer-to-peer lending company Zopa has announced it has received full authorisation from the FCA. Zopa launched the concept of peer-to-peer lending in March 2005 and remains one of the leading platforms in the UK. Zopa becomes the first of the top tier peer-to-peer platforms to receive full authorisation which would allow it to apply to HMRC for permission to launch an Innovative Finance ISA.

Here is the statement on the Zopa blog:

Zopa, the pioneering financial services business, announces that it has today been granted full authorisation by the FCA for peer-to-peer lending (Article 36H).

Giles Andrews, co-founder and Chairman of Zopa commented: “Zopa, both individually and as a founder member of the Peer-to-Peer Finance Association (P2PFA), has campaigned for peer-to-peer lending to be a regulated activity for a number of years. We are delighted to receive our full FCA authorisation.”

Jaidev Janardana, Zopa’s CEO, said: “The authorisation process has been rigorous and in-depth and involved extensive scrutiny of our business. We will continue to focus on serving UK borrowers and investors through our market-leading products and best-in-class customer experience. In addition, we are also working towards applying for a banking license which will allow us to offer great customer choice whether you are spending, borrowing, saving or investing”.

Full Authorisation from the FCA is a pre-requisite for Zopa to offer the Innovative Finance ISAs (IFISA). Following notification that Zopa has been granted full authorisation, it will seek permission from Her Majesty’s Revenue and Customs (HMRC) to become an ISA Manager. Further details of the launch of Zopa’s Innovative Finance ISA will be announced following the HMRC’s decision.