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
Lendy

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:

www.lendy.co.uk

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.

Full story »

Relendex receives full FCA authorisation

March 28th, 2017
RElendex

Relendex has become the latest P2P lending platform to receive full authorsisation from the FCA.  Relendex launched in 2013 and provides funding for commercial real estates, and lenders reieve interest of between 7% and 10% AER.

Here is their full press release:

Relendex, a peer-to-peer (P2P) commercial real estate lending marketplace that directly connects creditworthy borrowers to investors, has reached a significant milestone with full authorisation from the Financial Conduct Authority (FCA). The regulation demonstrates the rigour and governance of the platform and will allow Relendex to launch its new Innovative Finance ISA giving retail investors unparalleled tax efficient lending to the U.K. commercial property market. Founder and Chief Executive Officer of Relendex Michael Lynn, said:

“FCA full authorisation marks a fantastic start to 2017 for the Relendex team and platform which will further encourage and facilitate investment in commercial property from both our UK and foreign investors. The appetite for P2P marketplace lending in the property sector continues to grow at an incredible rate with the advances in technology resulting in further market share being taken from the high street banks. Receiving full authorisation will further accelerate this growth and demonstrates that Relendex’s robust operational infrastructure has met with the highest standards demanded by the FCA, bringing increased transparency and confidence to our customers.”

Relendex, an early mover in security-backed commercial property lending for investors, specialises in innovative finance through its nimble P2P marketplace lending platform technology and ultimately improves accessibility of established and secure asset classes into the direct retail and institutional investor market. Their commercial approach and automated secondary market provides much needed liquidity to lenders. Relendex has sustained zero defaults on its loan book to date (www.relendex.com).

Reaching this important milestone in Relendex’s real estate lending development with full FCA approval is testament to its commitment to support U.K. economic growth with fast and flexible financing options for Britain’s commercial property businesses. Whilst providing creditworthy borrowers with access to much needed credit and at the same time providing investors attractive and secured returns that are delivered through Relendex’s leading technology.

Obtaining ISA manager status on the back of this full FCA approval is the next step for Relendex allowing them to be one of the first movers in offering the Innovative Finance ISA to retail investors - the tax free wrapper and P2P investments that is forecast to propel the industry into the mainstream.

MoneyThing obtain full FCA authorisation

March 25th, 2017
MoneyThing

MoneyThing have announced that they have obtained full authorisation from the Financial Conduct Authority.  They have confirmed that there will be no further pre-funding of loans.  MoneyThing will also be offering an Innovative Finance ISA after they receive approval from HRMC, and this will be in the 2017/18 tax year.

MoneyThing were voted the Best Platform of 2016 by readers on the P2P Independent Forum.

Here is their full press release:

We are delighted to announce that today we have been fully authorised by the Financial Conduct Authority (FCA).

This is a significant milestone for our business and the result of just over 18 months’ work that involved the scrutiny of every aspect of our business.

Many platforms in the P2P industry are working hard to gain their full permissions and we are one of the first few platforms to be granted full authorisation, ahead of some of the largest P2P companies.

This will help to give our lenders and borrowers confidence that we meet high standards in the way we operate, based on the regulations set by the FCA.

We have had some extraordinary assistance along this journey from our compliance consultants and our legal advisors who have helped us to navigate the complex regulatory landscape. We would like to thank them and the MoneyThing team who have all contributed to our authorisation.

There will be a few changes as a result of our authorisation. Significantly, we are no longer able to pre-fund loans and we will be introducing new lender terms for new loans.

A full update on the changes and how they will affect lenders will be provided shortly.

Now we are authorised we can look towards launching an IFISA offering to lenders. This will be subject to HMRC approval and we will release further information in the coming months.

Ed Pearce, Managing Director, said “Gaining our full permissions to operate is a real achievement for MoneyThing and it is the result of a lot of hard work over a long time. Full authorisation will build credibility with our lenders, borrowers and partners which can only help to support our growth plans. It’s onwards and upwards for MoneyThing!”

Saving Stream default repaid in full

March 1st, 2017
Saving Stream

Saving Stream have announced that they have repaid all lenders for loan PBL020, along with interest.  There was a shortfall in the realised amount following the sale of the asset, but this has been covered by the Saving Stream provision fund.  This has been welcomed by lenders.

Speaking to Saving Stream at LendIt Europe last year the company stated that they believed lenders would be fully repaid.  The additional of interest after the default was unexpected, but perhaps welcomed by lenders who had continuted to purchase loan parts after the default.

Here is a copy of the email sent to lenders, which borrower details redacted:

We would like to announce the full repayment of the above loan. All investors should now have their capital credited to their Saving Stream accounts. The accrued interest to date will be included in the end of the month interest payments.

In December 2014, Lendy Ltd advanced £1,700,000 of Saving Stream investors funding in bridging finance to [redacted], to fund the [redacted] Garden Centre project. When sale negotiations fell through nine months ago, the loan went into default. Since then Lendy Ltd and our appointed agents have been working closely with the borrower to effect a satisfactory outcome.

We are pleased to confirm that today the matter concluded with the successful sale. While the project did not meet its original sale objective, it was sold for £1.3m, with the difference in capital made up by our Provision Fund. As a result none of the 1,156 lenders in this loan will lose any capital. Over the past two years, lenders have collectively earned over £170,000 in interest on this loan, based on the gross annual return of 12%.

Our auditors have conducted a thorough review of this loan and are satisfied that Lendy Ltd advanced the loan on a sound commercial basis and that our underwriting and due diligence were conducted in a stringent and thorough way. Users of the Lendy platform can be assured that Lendy takes a responsible approach to lending, and will always take every possible precaution to prevent a loan defaulting.

The loan was defaulted in May 2016 when the sale of the asset fell through and lenders stopped receiving interest at that time.  At the time the loan was already a year overdue and Saving Stream stated that lenders may not receive all of their capital if there was any shortfall in the value realised against the loan amount.

Here are the comments posted in May 2016:

As the borrower has not repaid the loan, Lendy is, on your behalf and at Lendy's option, enforcing the default procedures set out in the loan agreement with the borrower (clause 5.2). Once the assets have been realised Lendy will repay your investment.  In the event that there is a shortfall then Lendy will pay you a proportion of the recovery proportionate to the amount invested by you in the loan (clause 5.3.1)

The reaction on the P2P Independent Forum was positive.  A regular contributor on the forum stated:

Also worth noting that the borrower paid £1,475,000 for the Garden Centre, so the LTPV was 115% - The purchase value should always be disclosed to investors, in this case, it wasn't. If you work out the actual loan, it does seem that this was a 100% loan, with no collateral coming via the borrower at all.

I wonder if we will ever find out what the deal was with Lendy having a 10% share in the failed business (i.e. the borrower)... I guess not

In any case, a satisfactory result for all involved; good to see that nobody lost any money, but I hope investors don't see it as a precedent.  This was on the old T&Cs and the PF is still discretionary

The provision fund wording has also been modfied.  Below is the old wording:

The Fund will have a minimum balance of 2% of the total live loan amount at any time. Every time a new loan is made a portion of the fee charged to the borrower is paid into the Provision Fund (the amount is dependent on the loan size). It is also important to note that in the event of a default in excess of the Provision Fund value it may not be possible to cover all claims from Saving Stream investors.

Below is the new wording, with differences highlighted in bold.

The Fund will aim to have a minimum balance of 2% of the total live loan amount at any time. Every time a new loan is made a proportion of the fee charged to the borrower is paid into the Provision Fund (the amount is dependent on the loan size). If the Provision Fund is used to cover a shortfall in asset disposal, then it may take time to top the Provision Fund back up from company cashflow.