Funding Circle to exit property loans

April 12th, 2017
Funding Circle

Funding Circle have announced that they are to exit property loans by mid 2018.  Funding Circle state the reason for this is to focus on their core product of small business lending.

Lenders on the P2P independent forum were disapointed with this development as a number of them had focused exclusively on property loans.

Its a shame , it worked OK for me. I suppose that FC must know their business though & some of the borrowers must have taken liberties. I wonder how soon it will become apparent where the business will drift away to , if it does.

This may have a positive effect on Lendy (formerly Saving Stream) who have focused on property loans in recent years.

Here is the statement on the Funding Circle blog:

Funding Circle’s long term goal is to become the first choice for small businesses here in the UK and across the world. By attracting thousands more businesses to the platform, we can offer you many more lending opportunities, allowing you to continue to earn an attractive, stable return. To meet this goal, we have taken the decision to focus on our core small business lending product in the UK and our other markets and will scale down new property development lending, expecting to stop all lending by mid-2018.

We are proud of the lending we have facilitated to small developers since 2014. The borrowers you have lent to have built thousands of homes and credit performance has been strong; loans have generated a 7% annual return* (as of 10th April 2017) and you have earned more than £22m in interest.

By focusing on our core product you will be able to help thousands more small businesses to access finance and grow. Over the last year you have lent record-breaking amounts, with approximately £280m lent to small business borrowers in the first three months of 2017. We expect this trend to continue.

It’s important to note that this decision is not related to credit performance of property development loans, which have outperformed expectations over the last three years and we expect this to remain the case.

We will continue to work on your behalf to service all existing property development loans. There will still be opportunities for you to lend to experienced property professionals over the next 12 months.

Innovative Finance ISA

April 3rd, 2017

With only a short window remaining within this tax year, the majority of peer-to-peer platforms still have not received full FCA authorisation, and are therefore unable to offer the new Innovative Finance ISA (IFISA).  However there are a number of P2P platforms that have been successful in obtaining FCA authorisation and HRMC registration as an ISA manager.  The members of the P2P Independent Forum have compiled a list of the various platforms that are currently offering an Innovative Finance ISA.

We have take a copy of this list as of 1st April but for the up-to-date list please refer to the P2P Independent Forum.

Abundance 5% to 12% AER
Typical 7.5% AER
£5 Yes 2% AER return on ISA cash balances until 31st May 2017
Bassett & Gold 6.12% AER £1000 Yes No fees 
Capitalrise 10% to 14% AER £1000 Not yet £35 transfer out fee
Crowd for Angels Not specified £100    
Crowdstacker Typically 5% to 7% AER Not specified Yes £15 fee to sell investments through platform
Crowd2Fund Estimated 8.7% AER Not specified Yes Secondary market available
Downing Typically 4 to 7% AER £100 Yes  
HNW Lending Not specified £10,000 Yes £75 transfer fee
Landbay Expected 3.75% AER £5000 Yes £50 transfer fee
LandlordInvest Up to 12% AER £100 Yes 0.5% secondary market fee if you choose to sell early
Lending Crowd Target 6% AER £1000 Yes 1% withdraw fee
Lending Works  3.6% AER Not specified  Yes Rates for 3 year and 5 year ISA respectively
4.5% AER
Money & Co Typically 7% AER Not specified Not specified  
Property Crowd 7% to 10% AER Not specified Yes  
UK Bond Network Typically 7% to 12% AER £5000 Yes 1% cashback bonus

Thanks to the members of the P2P Independent Forum for their tireless work in investigating these platforms.

FundingSecure obtain full FCA authorisation

March 31st, 2017

As we reported earlier, today two platforms received full authorisation from the Financial Conduct Authority.  The second of these was FundingSecure.  They have also announced that they will be offering an Innovative Finance ISA once their application has been approved by HMRC.

Here is the section from the email sent to lenders:

We are happy to announce that FundingSecure is now fully authorised by the FCA.  Significantly, this means we can now apply to be an ISA manager.  Our application has now been submitted and we hope to be able to offer an IFISA within the next 2 months.

Look out for a separate email giving details of how and when to apply.

Ablrate obtain full FCA authorisation

March 31st, 2017

Two more peer-to-peer lending platforms have received full authorisation from the FCA today.  The first of these today was Ablrate.

Here is the article on the Ablrate website:

We are pleased to announce that Aviation and Tech Capital Limited, the company that owns and operates Ablrate has gained full authorisation from the Financial Conduct Authority. 

We have spent many long hours creating appropriate safe guards for lenders and borrowers and we have developed new and innovative systems to ensure transparency. All of these have been looked at by the FCA and have been approved. 

Our agreement system, that creates your own bespoke lending agreement all the way through your ownership of that loan, was created to show that Ablrate loans are between you and the borrower as they should be. Some platform have chosen to have documentation and terms and conditions covering the relationship between the borrower and the lender, we chose to make it a physical solution with an agreement system that can be audited by our lenders.

Regulation is necessary, and to be affective regulation has to be adaptive. This has been a challenge for platforms with different models and a challenge for the FCA facing those different models. I have to thank my team for meeting this challenge, working long hours and putting up with a grumpy CEO on many occasions. It would also be remiss of me not to praise the professionalism and pragmatism of the regulator. The people we dealt with in all sections of the FCA have been helpful and professional, this gives us the confidence to be able to innovate, which is what our sector thrives upon, without fear of banging our heads up against a regulatory wall!

The most important people to thank is really you, our community. You have been quick to give us feedback, both positive and negative, this has allowed us to shape our procedures, our systems and technology to a stage where the regulator wants us to be; managing risk, being clear and fair, treating customers fairly but also bringing something new and exciting to the market place.

This is a big day for our company and our community, but it's just the start. We are now able to plan better, innovate better, expand faster, and do this to the benefit of our existing lenders and borrowers and those who join our community in the future.

Saving Stream rebrands as Lendy

March 30th, 2017

Saving Stream has rebranded itself as Lendy. Saving Stream was previously the trading name of the peer-to-peer lending arm of Lendy Ltd.

It is likely the name "Saving" in Saving Stream could have caused some confusion among consumers as there is a clear distinction between lending and saving.  Savings however are authorised by Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authoirty (FCA) and the PRA, and benefit from £85,000 protection from the Financial Services Compensation Scheme (FSCS) should the company fail.  Lending however is regulated by the Financial Conduct Authoirty (FCA) but does not benefit from the protection of the Financial Services Compensation Scheme and lenders capital is at risk.

Here is the announcement in the email sent to lenders:

Following feedback from users, we are integrating the Saving Stream platform under the Lendy brand.  This is in order to simplify the brand and make accessing the crowdfunding platform easier for all our clients.

As part of the rebrand, investors and borrowers will now use the same website:

Features on the refreshed site include a new Help Centre, with an extensive FAQ section and glossary. We've also added all of our recent news into a new Customer News section.

The rebrand has been guided by platform users who were very positive about the Lendy brand. We hope you like it. The Saving Stream website will be redirected to the new Lendy website in due course.

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