Changes to the Marketplace

Here at, we’ve been working hard to bring you a range of good quality borrowing applications for you to consider.

We are constantly reviewing and improving our processes to ensure that we both maintain and improve the variety of lending opportunities we can present to you.

We have recently changed the way our application process works, and this blog post is intended to notify lenders of our most recent change, along with how the change will affect the listing information presented for your consideration.

  What is the change?

Starting this month, we will be presenting applications which have submitted VAT Returns in place of or in addition to their most recent Management Accounts.

  How does it work?

In the past, we requested two years of filed accounts, along with Management Accounts for at least three months prior to the date the application was made from the borrower.

This change means that, instead of supplying Management Accounts, an applicant business may instead choose to provide us with VAT Returns, since the most recent filed accounts for the period which would usually be covered by Management Accounts.

The rest of the required submissions for assessment will still be unchanged. Our Credit Risk team will still assess the two years of filed accounts along with the VAT returns and all other submissions. Furthermore, an application supported by VAT returns will still need to meet all of our usual criteria and risk rating, and pass our full assessment, before it will be presented to lenders.

  Why are we making this change?

The primary reason for this change is to allow us to present you with more information and increase the variety and number of credit-worthy businesses which we can present to our lending community.

For all limited companies, there is a legal requirement to file statutory accounts. These must be prepared in accordance with the statutory framework and must be filed at Companies House in accordance with their filing deadlines.

No such requirement exists for Management Accounts, which are not mandatory and are produced usually for the internal use of the company’s management.

Many SMEs do not produce up to date Management Accounts in the statutory format required for filed accounts; as such, we receive financial information in a variety of different formats, which then needs to be checked to ensure that is presented to you in a suitable format.

These may still be profitable and good businesses who use an external accountant to prepare their year-end accounts but do not keep internal management information of sufficient detail to enable our credit risk team to review and approve them to be presented in a standardised format to our lenders.

Unlike Management Accounts, the submission of VAT Returns presents a statutory declaration upon the directors of the business to attest to the veracity of the information required. Furthermore, VAT Returns present actual trading information about the business for that period and can often, therefore, present us with a truer and fairer view of the recent performance of the business. Previously, we could not consider applicants that did not have up-to-date Management Accounts in a suitable format.

This change will mean that we can now consider these applicants by allowing them to submit their VAT Returns to supplement our full assessment of the business.

  When will it be introduced?

We will be starting to list businesses which have submitted VAT Returns commencing 1st September 2017.

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

Starting today, you will start to see lending opportunities presented with the previously required two years of filed accounts but with VAT Returns in place of Management Accounts.

Of course, we will still accept submissions from businesses with Management Accounts, and these will be presented in the usual manner.

You will be able to see which applications have presented VAT Returns instead of Management Accounts via the following indications:

The listing will have a clear disclosure in the ‘Who are we?’ section of the listing overview stating:

“This company has elected to submit VAT returns instead of Management Accounts. As a result, this listing is presented to lenders with the previous two years of filed accounts, for the 12 months to [DATE], and the 12 months to [DATE].

More recent financial information is presented in the form of VAT Returns, which have been uploaded to the listing for lenders to download.”

For these applications, the YTD column on the finances tab will be left blank, as below:

Loan finances

There will also be an extra file to download attached to the listing. This contains the applicant’s VAT Returns, which can be found on the loan overview.

File uploads

  How should this affect my lending decision?

The bidding process of the site remains unchanged, as does the indicative risk rating given to each loan. The only change will be that on some applications, lenders should incorporate the recent VAT returns as recent financial information instead of the business’ Management Accounts when arriving at their lending decision.

Remember, lending carries the risk of default, but as a lender on you have a choice about which businesses you want to support. We provide you with information to help you inform your lending decisions, and you should always review the information before lending to a business. If you do not understand the information presented to you or have a question about the information provided, you should either ask the borrower a question via the discussion forum or contact us via or 0113 8150 244.

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