Advisers

on the rebuildingsociety.com blog

30th Jun, 2017

10 Tips on the Best Ways to Invest on P2P Lending Platforms

Having operated a P2P lending platform for over five years, we’ve seen many investment strategies and styles and would like to share some of these with you. However, firstly you should acknowledge that every investor’s risk appetite is different. As with any investment, it’s important that you consider the risks and your personal circumstances before making any investment. The following tips are intended to educate and provide non-personalised guidance to assist.

  • Engage with borrowers. Consider each business and make use of the discussion forums. Would you buy from them? Do you know someone who might? What risks might the business be susceptible to? If you can see yourself becoming a patron, that’s positive step. Consider whether the borrower has thought about the risks to their business and how they have planned to mitigate them.
  • Compound your repayments. Idle money doesn’t earn; by re-lending or withdrawing the interest you earn each period, you can improve your net return from the platform.
  • Bid early. Avoid being outbid at the last minute. This can mean tying up your capital for a week or two longer, but often means you will be the last to be outbid, improving your chances of earning your original interest rate. However, don’t shortcut your evaluation of the business.
  • Consider incentives and offers. Inducements can add a nice boost, but don’t let them sway your decision. Everyone likes the sense of getting a deal, but consider if you would still make an investment decision without the incentive. Where incentives apply, check the terms and conditions to understand how you may be eligible.
  • Buy microloans as repayments are due. Interest is paid to the owner of the microloan on an incumbency basis, which means that if you own the microloan at the time the repayment is distributed then you get the pay-out of the interest for the full month that has passed. Always remember to review the repayment record and financial history of the businesses listed on the secondary market prior to purchasing.
  • Consider the maturity. Older loans may be more likely to refinance than newer loans (those within the initial 50% of their term). So if you are buying at a premium, you should cosider that you may not receive every interest payment that is due over the remaining term. Also a long and healthy repayment performance history can be a good sign, when assessing the creditworthiness of a business.
  • Be prompt when selling non-performing loans. Whilst it’s not uncommon for a business to fall one or two days behind, don’t be afraid to discount and sell out of a loan that falls behind with a repayment. Once a loan is 30 days past due, some platforms will suspend trading on loans, in anticipation of the loan falling into default. Some lenders using the secondary market are looking for a deal. We make it clear if a loan is behind with a repayment, so buyers acknowledge there is a risk associated with buying discounted loans.
  • Read the updates. Some businesses have significant cash fluctuations. Some updates will state the reason behind a missed repayment. Use this information to consider selling (as described in point seven) but also for buying… if a lender has substantially discounted their microloans, then they may represent good value, if the business repayment performance recovers. You’ll need to use your judgment carefully, but there are some deals to be had from nervous investors.
  • Expect a level of defaults. Investing carries risk, and regardless of how well you manage your portfolio, at some point it is likely that you will sustain a default. It is not unusual for lenders to earn above average returns on a platform at the outset, expect your net return to ‘normalise’ between four and six years, when they are experiencing recoveries and new defaults at the same rate.
  • Sharpen your investment decision skills. By taking a studious approach, you can learn from your mistakes and identify patterns. For example, by correlating the experience of the Director and their intended purpose for the funds, you can interpret a borrower’s ability to put the capital to use in their business. For example, has the director shown that they have grown in this manner in the past (perhaps with a previous business)? If not, how likely are they to get this investment decision, that they are making with the funds they borrow, right first time? Can you see a risk in this strategy that the borrower hasn’t? Don’t be afraid to ask if you’re unsure.

Peer-to-peer lending doesn’t need to be complicated, but by understanding and considering some of the above, you’ll be well on your way to building a good P2P portfolio. Remember, there is no best p2p lending platform, you will need to learn the best ways to invest.

If you are new to peer-to-peer lending, then please read about the risks involved also.


27th Feb, 2017

Full FCA Authorisation

rebuildingsociety.com has been awarded full authorisation from the Financial Conduct Authority in recognition of our compliance with sector-specific regulations.

We are very excited to share news of this major achievement and important milestone with our community. Authorisation means that we meet the rigorous standards set by the FCA and that we can soon start to offer the Innovative Finance ISA.

Although we have been operating under FCA rules on Interim Permission since April 2014, being granted full authorisation helps us to continue building on the important relationships of trust we have with all our clients. We are proud to have achieved this milestone ahead of many other platforms, which we believe is testament to our small but dynamic team, systems, processes and controls.

(more…)


26th Jan, 2017

How to Get Your Loan Approved and Funded

Navigating your way through a loan process can often prove to be challenging and may seem like a long road obfuscated by a fog of red-tape and administration.

At rebuildingsociety.com we have made our processes as simple and transparent as possible to help you navigate the path to a successful loan application. You can either refer to our handy flowchart or digest the information below.

Get your loan funded flowchart

Criteria

Do you meet our basic criteria?

  • We can help Limited Companies, LLPs, PLCs and social enterprises
  • We require at least two years trading and filed accounts. (If you are a recently incorporated Ltd Company with a trading history as a different entity such as a sole trader then you may still be eligible)
  • No outstanding CCJs of £250 against the business
  • The business must be profitable and VAT registered
  • Directors/Partners must be UK residents
  • Turnover greater than £150k (we will also consider businesses that are on course to meet this requirement in the current financial year)

If you meet this criteria, we would love to receive an application which you can complete online.

On average it takes less than 10 minutes to complete the application form and once we have all of the required information, we can get you a decision within 24 hours.

Documents Required

We require the following information to process your application:

  • 2 years filed accounts
  • Management accounts, including balance sheet and P+L covering the period ending no earlier than 60 days prior to the date of submission
  • Details of any existing borrowing, including providers, monthly repayments and amounts outstanding
  • Completed statements of Assets, Liabilities, Income and Expenditure for all directors
  • Business bank statement covering the most recent 3 months
  • Personal credit report for all directors

Underwriter’s Questions

Once we have received all of the required information, the application will go across to our underwriters for assessment. During the assessment process they may have some questions on the application or accounts which they will raise via the listing discussion forum.

You will receive an email notification when any questions are posted and in order to respond to these questions you simply log on and reply directly to the underwriter. Any pertinent topics will be left visible for our lenders once the loan goes live. Any information provided which is sensitive or not directly relevant for the lenders will be removed before listing.

Once your application is approved by the underwriters you will need to review and approve the listing before it goes live.

Reviewing the listing is your last chance to make any changes to the listing blurb before it goes live to be viewed by potential lenders. As the listing is the first thing potential lenders will see about your business, it is always beneficial to make sure that it is of sufficient detail to give a true and fair picture of your business, what you need the loan for and why lenders should invest.

We also have the capacity to upload any pictures, files or embedded videos that you would like lenders to see, so you may wish to send us any of the following for inclusion:

  • Business plan
  • Introductory video
  • Cash flow forecasts
  • Asset valuations / property valuations
  • Promotional pictures

Security Discount

Before your loan goes live you may wish to consider the security you have offered. Well secured loans attract lower final rates, fund faster and may also qualify for a discount on the starting rate of up to 5%.

You can find out more HERE or speak to one of the rebuildingsociety.com team:

Your Application is LIVE!

Once you have approved the listing, we will email you to let you know that the loan is now live on our site and attracting bids.

It is good practice at this initial stage to add an introductory message on the discussion board to introduce yourself, so that the lenders are aware who it is they are addressing and who to direct their questions to.

Once the loan goes live you will be asked questions by lenders. These questions will be asked by potential investors and the answers given will often dictate whether they decide to invest or not. It is important that you ensure that you answer these in as much detail and as promptly as possible.

By subscribing to the listing discussion forum, you will be automatically notified via email each time a new question or reply is posted on your listing. Alternatively, you can visit the site at any time to engage with the lenders.

Previous applicants have found that engaging with our lender base at this stage is an excellent way to get the most out of the P2P lending experience. Our lender base is comprised of a wide cross-section of individuals from various ages, demographics, professions and business experience. Applicants have found this stage of the process to be a valuable opportunity to engage with potential customers, potential new business contacts and gain a number of potential new stakeholders with a vested interest in seeing their business succeed. Building a good rapport with our lending community from the start of the application will likely see the application fund quicker and at a better rate.

Your Loan Has Been Fully Funded

What happens next?

The day after the auction closes, we will send you a completion email which will lay out the steps you need to follow before we can release the funds.

This email will contain:

  • A confirmation of the final interest rate and a breakdown of fees and funds
  • A step by step guide on how to complete the online loan acceptance
  • The legal documentation for the loan (e.g. Loan Agreement, Personal Guarantee)
  • Details of the ID, bank statements, additional contact details and security documents that we require

We try to make the completion email as easy to follow as possible, however if you do need any additional assistance with any part of this process, we’re always available to provide guidance, so please get in touch via email or telephone.

Once you have completed all of the steps and posted the completion documents back to us, you just need to wait for us to confirm the transfer. Once our team has reviewed the submissions, we will be in touch to let you know that we have authorised the transfer.


12th Jan, 2017

FinTech North 2017

Following the success of the inaugural event in 2016, FinTech North 2017 is once again set to take place during Leeds Digital Festival week and aims to attract 350 delegates and support from the FinTech community in the Leeds City Region, across the UK, and internationally.

FinTech North 2017 will be hosted on the 26th April 2017 at aql in Leeds. The goal of the event is to generate collaboration and knowledge share within the financial services and technology community and to generate tangible economic benefits for the region.

The agenda for the one day conference will feature a number of well-known keynote speakers who will cover topics including innovation, alternative finance, big data and analytics, machine learning, digital identity and authentication.

View the 2016 FinTech North video:

 

In recent months the interest and activity in the FinTech arena in Leeds has heightened, with developments including the publication of a FinExtra report into FinTech in the Leeds City Region and the announcement of a new Digital Laboratory which is being led by Finexus and has gained high profile corporate support.

Julian Wells, Director of Whitecap Consulting, says: “There is a strong desire by numerous stakeholders in the Leeds City Region to increase the profile, capability and economic value of FinTech in the region. This year by launching FinTech North we laid the foundations which will enable us to deliver an even more impactful event in 2017 and help put FinTech firmly at the heart of the northern digital economy – particularly the Leeds City Region – making it attractive to UK and international organisations.”

Dr Chris Sier, Director of FiNexus and FinTech Envoy for the Northern Powerhouse, who spoke at FinTech North and will chair the 2017 event, says: “Opportunity was a theme from every speaker at FinTech North 2016. The challenge for Leeds is to work together to ensure our City has the best chance of exploiting the opportunity to become a true FinTech centre of excellence.”

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Nearly 200 business leaders attended the first FinTech North conference in Leeds, and speakers and delegates were drawn from places as diverse as Estonia, Germany, London and Manchester.

Dan Rajkumar, Managing Director of rebuildingsociety.com and White Label Crowdfunding, summed up why the next FinTech North event will be a great opportunity for the region: “There is no doubt Leeds is now seen as a key FinTech and digital leader outside London both for infrastructure and talent. FinTech North 2017 will provide the delegates with a fascinating day of insight and the opportunity to network with industry peers and some of the region’s best known FinTech companies and governmental bodies.”

Registration for FinTech North 2017 is now open – click here to book your free place.

For speaking and sponsorship opportunities, please contact Whitecap Consulting.


23rd Nov, 2016

The A-E of Reasons to Take a Business Loan

 Asset Purchase

Assets can often be purchased through a hire purchase agreement, but where this option is unavailable a business loan can fill the funding gap and allow you to spread the cost of potentially expensive equipment.  In some instances the asset can act as security for the loan which will somewhat reduce the risk.

In 2015 more than £29 billion in finance was provided by members of the The Finance & Leasing Association to assist with asset purchases.  This figure is further boosted by the work being carried out by the Peer-to-Peer funders who offer an alternative route to finance outside of the traditional sources.

Business Acquisition

Business acquisition is the process of acquiring another company in order to build on strengths or weaknesses of the acquiring company.  The aim is often to aid growth in a quicker manner than would normally occur organically. We have also supported new business owners who are able to show experience in their field of purchase and where security is strong to support the acquisition.

Cash Flow

Successful businesses typically have a healthy cash flow, but even the best run businesses can experience fluctuations and cash flow finance can be an effective way to ease cash flow issues during busy periods.  For short term options, businesses can use credit cards and overdrafts where appropriate.  Longer term requirements such as construction firms covering a shortfall before they are paid by their customers and import/export or retail businesses making large inventory purchases to save money a loan can offer timely support to help plug this gap in finance. Another popular option is invoice financing and it’s important to consider the best fit for your organisation before entering in to any agreements.

Debt Consolidation

A fairly common use of a loan is to consolidate other debt.  This may seem confusing but there are three main reasons why a business may wish to take this route; businesses can spread the cost of an expensive loan over a longer period, combine several smaller loans into one more manageable loan or they may wish to refinance at a better rate.

Some debt consolidation companies have a bad reputation and Money Saving Expert, Martin Lewis rightly warns his readers to be wary of these in this excellent piece on his website.

The key here is to make sure the deal is the right one for you.  Are the savings on the monthly payments going to help you and your business to succeed? Once you have considered the likely rate and repayments on the consolidation loan you will be in a better position to decide if this is the right move for you, but whatever you do, do not blindly accept a deal without considering the benefits or potential pitfalls.

Expansion

If you are looking to grow your business, expansion can take many forms.  There are a plethora of options for expansion including taking on new employees, larger offices, additional sites, product diversification and taking your product online.  You may find a cash injection from a loan helpful in achieving your desired growth. It can help to pay for the new revenue stream in it’s early stages before it starts to pay for itself and could help you to achieve your planned expansion earlier than you may have through organic growth.

Before taking a loan for expansion you should be confident that you have planned effectively and considered the relative risks and challenges.  If the expansion is unsuccessful for any reason you will still be expected to pay the remainder of the loan from your existing profit, so it is vital that there is a clear route to profit before accepting finance to fund the project.

If you are a business looking for funds, bypass the banks and get a better deal in just a few days, call us at 0113 8150 244 or start your online loan application today here


11th Nov, 2016

The Return of an International Sweet Treat

In 2014, Candy Hero Ltd. came to rebuildingsociety.com looking for an influx of funds in order to expand. They planned to use the investment to boost wholesale sales, strengthen equity and then open a new UK store in time to maximise Christmas time sales.

Candy Hero Ltd. was founded in December 2008, by two entrepreneurial siblings with a mission to bring unique, specialist and delicious sweets from all over the world to sweet-toothed customers in the UK and Europe.

The online shop was launched in 2009, to be followed later by high street shops in York and Leeds. Visit one of their shops, and prepare to be tempted by Birthday Cake Golden Oreos, exploding cinnamon candy, Nerds, giant lollipops, wasabi candy and boxes of Jelly Belly Buttered Popcorn Jelly Beans, to name just a few from the vast collection. The 10,000 square foot warehouse in Bradford sees around 4,000 unique product lines carefully handled by employees individually chosen to fit the company’s high energy, innovative ethos.


The sweet importers and retailers’ first loan application was a great success; brothers and co-owners Frank and Leo managed to raise the target £50,000 from investors. Candy Hero Ltd. invested the money they raised into the wholesale distribution of imported sweets, snacks, and groceries. They decided not to open a shop, as they were unable to find an adequate unit within their chosen city. Instead, they focused on their online sector. In the last two years, the company has:

  • grown turnover significantly; 2015 to 2016 saw 83% growth
  • increased their stock-holding capacity from 5,000 to 10,000 square feet
  • acquired a great number of additional wholesale customers
  • built a proprietary pre-order system
  • co-ordinated a huge UK product range comprising around 10,000 lines available for pre-order and export
  • improved internal systems with strong procedures that improve staff training processes
  • added powerful price and margin controls and mitigated currency fluctuations

Frank commented on their experiences with rebuildingsociety:

“They provided a smooth process prior to listing the application, support throughout, and a platform that is clear and easy-to-use. Rebuildingsociety is a very impressive social business that is a powerful tool when you need extra finance above and beyond what may have been already possible.”

Perhaps one of the keys to their online funding success was the company’s open-door policy. Frank discusses business with his team quite openly, “from the top to the bottom of the organisation, in response to any question.” Therefore, he embraced the discussion forums available on rebuildingsociety.com, believing that “talking business with lenders in a peer-to-peer environment with the same openness and clarity builds up the confidence to invest in us.”

Now, Candy Hero is back with a new loan application. The return borrowers are well-supported by rebuildingsociety’s lender base, something they hope will help them fund their £300,000 loan application. If successful, the team plan to refinance £184,000 to achieve cheaper interest per month and fewer capital repayments per month, and use additional capital to add to the stock cycle.

When asked why they decided to return to Rebuildingsociety, Frank explained that while their bank is very supportive, recently offering them a new import loan facility, they cannot approve a loan of this size. As he commented: “The only method of gaining a loan of this size would be crowdfunding and the only place I want to crowdfund is Rebuildingsociety.”

Read about the company on their website, and find out more about their loan application at rebuildingsociety.com.

Lending to businesses carries risk. Past returns are not necessarily a guide to future returns. Any unrepaid capital is at risk of arrears or default. To find out more please visit http://reb.so/risk


24th Oct, 2016

Changes to the Marketplace

We’ve been working hard to bring you good quality borrowing applications for you to consider. Currently businesses that are eligible to borrow through rebuildingsociety.com, must have at least two years history, an average turnover of £50,000 a quarter and offer at least a personal guarantee as security. The average final rate paid by borrowers on our loan book is over 20% APR*, this rate is paid usually regardless of the security offered in support of the loan.

Currently, the risk rating given to the borrower drives the maximum starting rate for bids. To incentivise applicant borrowers to offer more or better security we are introducing a modifier to the maximum rate ceiling on the loan auction.

Whilst we currently take security into account during the underwriting process, it is not a significant factor in determining the risk rating given to the borrower, and therefore has little bearing on the cost of the finance.

From the 26th October 2016, the starting rate on a loan will be driven by the security strength and Loan To Value (LTV) score of the security rather than the final risk rating. The underwriting of the loan will be done in the same manner as before and risk ratings between A+ and C will continue. The weightings attributed to the determination of the Risk Rating in our model will remain unchanged, therefore a loan that was rated as C risk earlier, will still be rated as a C rated loan, allowing you still to view the suggested relative risk of the business.

The Changes in Practice

What is it?

A new borrower incentive to encourage borrowers to offer more and better security in support of their loan.

How does it work?

The borrower can offer a wide variety of security to support their loan. We’ve assigned a nominal value to the different types of security, making some security ‘more valuable’ than others. For example a 1st charge on a property will be deemed a more valuable form of security than a company debenture, and as such they will be rewarded with a lower starting interest rate.
The more security added, the more the starting rate will be reduced* as the security added works in a cumulative way linked to the loan to value ratio.
The starting maximum rate will never be modified lower than 5% of the standard maximum rates, which are currently as follows:

  • A+ = Max rate 11%
  • A= Max rate 14%
  • B= Max rate 17%
  • C= Max rate 20%

Therefore a C rated loan will never have a maximum starting rate of less than 15%.

The security we can accept from a borrower is ranked in priority below.

  • 1st Charge Commercial Property
  • 1st Charge Non Residential Property
  • 2nd Charge Commercial Property
  • 2nd Charge Non Residential Property
  • 1st Charge Residential Property
  • Fixed Asset Debenture
  • 2nd Charge Residential Property
  • All Assets Fixed and Floating Debenture
  • Corporate Guarantee
  • Personal Guarantee Insurance

Therefore, depending on the LTV on the security, a 1st legal charge taken on a commercial property in support of a loan will be ranked higher than a loan with an All Assets Debenture and may be achieve a lower maximum loan rate. Similarly, based on the above a loan secured on a 1st charge non residential property with an exceptional LTV will not achieve a better rate than a loan secured on a 1st commercial charge that also has an exceptional LTV, unless the former is accompanied by additional security.

Personal Guarantee’s do not qualify for a reduction in the interest rate as this is a mandatory requirement for all loans.

Why are we introducing it?

We have received feedback that the security being offered should have a more direct effect on the rate of loans. As such, we are rewarding borrowers who choose to back their loan with additional security. In the long run this should result in a higher percentage of secured loans and an increased rate of recovery.

When will it be introduced?

The security discount will apply to all new loans from Wednesday 26th October 2016.

How will this affect you and your use of the site?

The bidding process of the site remains unchanged as does indicative risk rating given to each loan, the only change will be the maximum starting rate of any loan that achieves the reward.

Will this be applied to historic loans?

No, but existing borrowers who reapply for new finance may qualify for the ceiling rate reduction.

Will this reduce my returns?

We expect any reduction in average gross returns to be offset by an improvement in net returns.

As ever you should always review each loan application in detail before lending. Where you have questions in regard to an application you should put these to the borrower via the discussion forum on each application.

If you have not already done so, please read more about the risks associated with lending to businesses.


26th Sep, 2016

Financial Services Regulation. What does it mean for you as a consumer?

FCA, TCF, FOS, OFT, PRA…As a lender on a Peer to Peer site, these are all acronyms you may have come across. But do you know what they stand for and what the regulation means for you as a lender? In this post, we take a closer look.

The Financial Conduct Authority (aka The FCA) were formally known as the Financial Service Authority and the Office of Fair Trading (OFT).

In 2013, the FCA was formed, taking over the operations of the FSA and the OFT and at the same time also creating the PRA, the Prudential Regulatory Authority, the authority that regulates the banks and insurers.

The FCA (who are directly accountable to HM Treasury and Parliament) aim to secure an appropriate degree of protection for consumers, protect and enhance the integrity of the UK Financial System and promote effective competition.

In 2013, the FCA announced that it planned to regulate the previously unregulated crowdfunding sector, including both the equity and debt-based sides of the market. Rebuildingsociety.com, having operated since late 2012, fell under the new regulation and authority of the FCA. As rebuildingsociety.com was already trading under the supervision of the OFT, it was granted Interim Permission and invited to apply for full permissions in October 2014.

So, how does the FCA go about ensuring that the firms under its supervision protect consumers (you)?

All firms under the authority of the FCA must meet the minimum applicable standards as set out in their Regulatory Handbook. The Regulatory Handbook is driven directly from legislation, primarily the Financial Services and Markets Act 2000 (FSMA). The handbook acts somewhat like a Bible for regulated firms, setting out how it should handle client money, how it must manage its promotional activity and communicate to their clients, to name but a few of the rules set out in the extensive Handbook.

Some of the most prevalent rules that go towards protecting consumers are the rules on Treating Customers Fairly (TCF) and Financial Promotions. These rules, if not followed, can result in firms facing penalties and restrictions and as such are taken seriously by regulated firms.

Treating Customers Fairly

TCF rules aim to raise the standards by which firms carry out their business. The TCF rules are driven by 6 outcomes that firms should measure their performance against. These principles aim to help you fully understand the features, benefits, risks and costs of the financial products you buy and minimise the sale of unsuitable products by encouraging best practice before, during and after a sale.

What are the 6 Outcomes?

  • 1. Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Whilst this outcome may seem obvious at first, it is central to the FCA’s core mission to protect consumers. The FCA insist that firms make fair treatment of consumers core to their corporate culture and not merely a box ticking exercise to satisfy the regulator.

Firms are expected to ensure that all staff act honestly and with integrity and deliver a high standard of service to clients.

  • 2.Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

This means that firms must not sell financial products to customers who do not need them, nor sell products that are not suitable to their specific needs.

This puts the responsibility on firms to ensure that they know their customers and their needs, so that they are not burdened with products or services that they do not actually need. For an obvious example, a firm should not sell a Pay Day Loan to a customer who does not have a job.

If you think back to PPI, or to the mis-selling of mortgages and the effect of the collapse of this market, you can see the importance of this principle clearly illustrated by the consequences of previous failures.

  • 3.Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

You may have heard of the Latin Phrase, ‘Caveat Emptor’ roughly translated to ‘Buyer beware’. This is exactly the type of behavior that the FCA is trying to remove from the financial services sector. They want to ensure that firms do not hide important details in the small print.

Customers should be made aware of all costs, penalties and terms before entering into an agreement to ensure that they are fully aware of what they are committing to or should expect throughout the term of the product or service.

  • 4. Where customers receive advice, the advice is suitable and takes account of their circumstances.

Entering into a contract for a financial service or product is one of the most important contracts that many of us enter into. Think Mortgage, Life Insurance or Pension. As such, it goes without saying that when doing so you expect to be given advice that is suitable and tailored to your needs so that you are able to make an informed decision.

Firms that fail on this principle are subject to exceptional penalties.

  • 5. Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect.

When you buy a financial product or service you should expect to get what you expected when you bought it. So if you open a savings account that you are told will yield a certain amount of interest each year, your savings account should deliver as expected.

  • 6.Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

Firms must make it easy for customers to change providers, make a claim or submit a complaint.

Matters concerning financial products and services are often time sensitive and as such firms should react in a reasonable manner so as not to cause major inconvenience for their customers.

At rebuildingsociety.com, TCF is in our DNA. We’re always striving to improve your experience of the site and the service you receive from us. If you don’t think that we are meeting your expectations we’d like to hear from you so that we can put it right.

You can contact us either by phone or email, all details are available on our Contact Us Page.


01st Sep, 2016

Do You Know… What we look for?

There is a lot of work which goes on behind the scenes from the point when an application is first submitted until the point at when it goes live on the marketplace.

To give you an idea of the time involved, the borrower team spend an average of nine days on the assessment phase of an application, from the initial submission to listing.

This time is spent analysing the prospective borrower’s submissions, assessing the accounts and security submitted, asking pertinent questions about the business, liaising with the applicant to get more information on their business or additional security to support their application and, when identified, requesting amended accounts in circumstances where accounting errors are spotted, to ensure that the figures presented to lenders are as fair and accurate as possible.

First and foremost, however, a listing must meet our basic lending criteria, and we filter out those that don’t at the first instance. Our five basic criteria are as follows:

1) The applicant must be a limited company.

We do not offer loans to partnerships, sole traders or individuals. Limited companies are by law separate legal entities from their directors or shareholders. This means that there is a clear legal distinction between personal finances and the finances of the business. We can assess the strength of the business purely on its own merits and look at the personal finances of any directors or shareholders separately to assess the suitability of security.

A Limited company is required by law to produce fair and accurate accounts to be filed at Companies House available to the public record every year, along with an Annual Return listing directors and shareholders. This allows us to cross-reference accounts submitted by applicants with those filed at Companies House, an important security check we conduct on every application before listing.

2) The company must have two years or more of trading history.

Recent statistics suggest that up to nine out of every ten start-up businesses will not survive past the first two years. The risk of failure usually reduces after each year of successful trading. We require all businesses we list to have at least two years of prior trading history. This allows us to mitigate the risk of failure by only listing businesses which have already survived the most risky period. It also gives us at least two years of business accounts to assess, and lets our underwriting team get a more accurate idea of the business, adjusting for one unusually good or bad trading year.

3) The business must be profitable and must have a turnover sufficient for our affordability criteria.

As part of our lending criteria, we require that every business we list must have made a profit in the last two years of trading. On top of this, we also use our bespoke risk tool to calculate whether the loan repayments are affordable, taking into account factors such as the business’ turnover, net profit, liquidity and the equity/debt ratio.

4) The business must meet our risk rating requirements.

Along with affordability calculations, our bespoke risk tool also gives each application a risk grade from A+ to F-, factoring in a myriad of criteria from turnover, profitability and growth to liquidity, credit rating, repayment history and creditworthiness.

Any business which scores a D+ or below is rejected. If a business scores C- or higher, should it also meet our security and affordability criteria, it is listed on the marketplace with the appropriate risk rating.

5) The business must also meet our security requirements

Before making it on to the marketplace, businesses must fully satisfy our security requirements, which are considerably higher than most of our competitors. Firstly, unlike some other platforms, all of our loans are backed by Personal Guarantees as a minimum. For any loan request in excess of £50,000, we also require additional security in the form of a Debenture or a Legal Charge over Property.

In addition, in order to try and ensure the greatest prospect of recovery should a loan default, we also require that the total value of all security offered must cover the full loan amount requested. Our underwriters determine the value of each form of security offered by a prospective borrower and should the sum be less than the full loan amount, the borrower will be notified that additional security will be required in order to list.

The above 5 steps are just the first part of underwriting process. Once these initial checks have been done, the application is then pre-approved to undergo further, more stringent assessment.


07th Aug, 2015

P2P Weekly: Leaders aim to get ahead of Treasury Department concerns, and other stories

Our weekly round-up of peer-to-peer and crowdfunding news.

Peer-to-peer lenders get ahead of regulation with voluntary code, Yahoo Finance

U.S. peer-to-peer lenders have released a list of six best practice guidelines that lenders can use to protect borrowers. The announcement comes on the heels of news that the U.S. Treasury Depart is gathering more information about peer-to-peer lending. The “Small Business Borrowers’ Bill of Rights” calls for more transparency, responsible underwriting and non-discriminatory access to credit, among other safeguards.

“China seeks to tame online financial risks,” Financial Times

China’s move toward regulation of online lending both legitimizes a growing industry and indicates the government’s support of traditional banks.

“Regulation will standardise operations and expose the industry to sunlight. Practices that were seen as existing in a grey area will be forbidden,” says Xu Hongwei, chief executive of Online Lending House, a website that tracks the P2P industry. “But regulation will also increase operating costs, causing some of the lower ranking and weaker players who can’t make the cut to go bankrupt. And it will raise barriers to entry. Average people won’t be able to get in any more.”

“The Wired 100,” Wired

Wired is releasing its annual list of 100 most influential people in tech-related fields, and this year UK-based P2P service Funding Circle Team made the list at number 92. Wired notes, “Funding Circle now has access to over 38,000 investors, who lent £100m to small businesses in Q1 2015 alone. The company hopes to hit $1bn in loans this year.”

“Brazil’s BankFacil Secures $3M, Launches Low-Rate Consumer Loans,” Wall Street Journal

BankFacil has raised venture capital so it can make consumer loans easier and cheaper. The three-year-old online lending startup mostly competes with banks, as alternative finance is a nascent industry in Brazil. Founder and CEO Sergio Furio hopes to secure a large enough volume of loans to be able to offer markedly better interest rates than other lenders, including banks.

“The UK is beating the US in the peer-to-peer alternative lending market — here’s why,” Business Insider

The UK is generating 72 percent more P2P lending capital per capita than the U.S., according to new research from Business Insider. Several factors, including a friendly regulatory environment, very high rate of online access and early adoption contribute to this. Business Insider subscribers can read the full report.


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