Lending FAQs

Getting Started FAQs

How can I become a lender?

Simply register online. We will promptly perform a few checks on your details and then, once approved, you can credit funds to your online balance. These funds can then be bid on new lending opportunities on the marketplace or used to purchase micro loans on the secondary market.

Can I lend as a business?

Yes, you will need to create a lender account with your own name, address and date of birth, but with the name of your business as a username. Be sure to add the full name of your business to your account settings. Like our other users, you will take full responsibility for your tax requirements. Please be aware that tax treatment depends on the individual circumstances of each client and may be subject to change in future. Please seek professional advice if necessary.”

How do I add funds to my account?

Visit your Dashboard by clicking Dashboard in the navigation, then click the Add Funds button. This will give you the account details and your unique reference ID, which you can use to make a bank transfer. Thanks to faster-payments, most credits are received within a few hours. Before your first transfer into the platform, you will need to provide your address details.

Where is my money held?

When you transfer funds to your online account, they are held in a segregated Barclays client bank account, protected by the same regulations that apply to lawyers or accountants who hold client money for the execution of financial transactions. You may access your available funds at any time by clicking the ‘withdraw’ tab on your dashboard. Your funds will normally clear with your bank account within a few hours, but may take up to two working days.

What is my rate of return?

Your Dashboard shows you an average Gross Return, which is the average rate at which you are lending across all loans, as well as a Net Return Calculation which is a calculation of the interest/capital employed for each period.

What are Bids and Capital Employed on the Dashboard?

Your bids are recorded on the Dashboard. A breakdown is available under the My Bids tab at the bottom of the Dashboard page. Once a bid has been made, it is binding. Should the borrower reject the loan offer, your bid will be cancelled and returned to your Available Balance.

Bids become capital employed once bids are accepted or when micro loans are purchased. These can be held until the loan matures, or you can list them for sale on the Secondary Marketplace.

What are your bad debt and default rates?

Please see our lending statistics for up-to-date information on bad debts and defaults. Lenders may spread their risk by building a diverse portfolio to minimise the impact of bad debt on their overall return.

Our first loan was completed in 2013, so we may have more defaults data than some newer platforms, whose performance may appear better than ours.

How do you calculate your risk gradings?

In assessing borrowing applications, we use data provided by the borrower in their application, data from leading credit agencies and data suppliers.

Information supplied by borrowers typically includes:
– Statutory Accounts
– Management Accounts
– Statement of Assets
– Additional security details

External sources are used to provide information on:
– Business Trading History
– Business Payment history
– Adverse information (CCJs, winding up petitions etc.)
– Verification of accounts supplied
– Directors associated businesses
– Directors Consumer scores
– Adverse Media

    • All collected data is assessed by our underwriting team and is used to determine the risk rating of the business. Risk ratings on rebuildingsociety.com are between A+ and D; applications below a C are not listed.

What do the risk ratings mean?

All loans listed on the platform are assigned a risk rating of A+ to C. Loans with different risk ratings have different starting interest rates, depending on their rating and the security they have offered in support of the loan.

Risk ratings are determined by the credit risk team at rebuildingsociety.com by taking into account a wide range of data points as described above. Generally speaking, A rated loans are considered to be lower risk than a loan rated as a C, which would be considered higher risk and would, therefore, have a higher starting interest rate.

When deciding to lend, it is important that you decide for yourself whether you consider the business to be within your risk appetite. Should you be unsure about whether to lend to businesses on the site, we recommend that you speak to an independent financial adviser before lending. Read more about the risks associated with lending to businesses.

How much can I loan to a business in one go?

At present, the maximum amount you can lend to a company in any one bid is £2,000. Lenders can make multiple bids of £2,000 on applications.

What fees apply to lenders?

0.5% microloan sale fee

When you sell a microloan on the secondary market, there is a 0.5% commission fee based on the outstanding capital, which is payable once your loan part is sold. For example, if you sell a loan part with £100 principal remaining, the sale fee would be £0.50 once the loan part sells. No charges apply if a loan part is not sold.

0.1% IF ISA account management fees

We charge a monthly account management fee on the first working day of each month. This balance will be debited from your available balance.

These are the main fees that lenders should know about, other fees also apply.

What is the risk associated with lending?

We cannot guarantee that a business will repay its debt.

However, we credit check potential borrowers and make sure they supply statutory accounts and supporting documentation. The discussion tab allows you to put questions directly to borrowers. We highly recommend that if you have any questions about the business you are thinking of lending to, that you put these to the borrowers in the forums.

Read more about the risks of lending to SMEs.

What happens when the auction expires and is not fully funded?

If a loan request is not 100% fully funded, we do not release the funds raised to the borrower.

Towards the end of the auction, we contact the borrower or their broker to discuss their options depending on how the loan request has funded.

Once the auction ends, if the loan request is not 100% filled we can, at our discretion, offer the borrower the option to extend the auction at the current loan request, or alternatively lower the loan request and extend the auction.

If the applicant wishes to withdraw their request completely, the auction will be cancelled and lender funds will be immediately returned. No interest will be earned on bids made where an auction is cancelled or withdrawn.

If the applicant communicates their desire to extend the auction to try and reach 100% of their funding target, we can offer a one- or two-week extension to the auction. We can also, on occasion, reduce the amount requested if the applicant wishes to lower their target to a more achievable amount.

Whenever an auction is extended or the amount requested is changed, lenders will have the right to cancel any bids made before the change occurred. Notice of the change will always be posted on the ‘Loan Updates’ tab of the application page and is also visible via your lender dashboard.

The update notification post will contain details of how to request a bid cancellation and the deadline for any requests.

Who am I lending to?

Companies looking to borrow money to grow their business will apply online. In their application, the director(s) will explain what their business does, who they are and what the the loan is for. This way you can have full control over who you lend to and can tailor your preferences to suit your interests or to help businesses in your community.

How can I monitor my loans?

All your information is available on one screen at a click of a button.

Whenever you log in to your account at rebuildingsociety.com, you will be directed to your Dashboard. This will present you with all the information about your funds and loans, from the funds you have available and the funds you have committed by bidding, to information about the status of your loans.

When will I start getting my repayments?

Once the loan has been accepted by the borrower, a standing order will be set up to coincide with the repayment schedule, according to which all payments will be made.
Once a loan that you have bids on has been accepted by the borrower you can view the repayment schedule on the borrower’s profile page, so you know when to expect repayments.

Managing your Portfolio FAQs

Can I get my money back early?

If you need to access your money, you can sell your micro loan to other lenders in the secondary marketplace. After a micro loan is sold, the proceeds are returned to your balance. If you want to access this cash, you need to submit a withdraw request from the Dashboard.

If you choose to sell micro loans individually, you can select and sell micro loans at a premium or discount of up to 5%. If you sell at a premium, you can earn a profit, but if you sell at a discount, it is likely that you will be able to access your money sooner.

What is the secondary market?

The secondary market is a marketplace via which lenders can sell micro loans to other lenders. This offers lenders the chance to gain quick access to their cash.

How do I sell micro loans?

Selling your micro loans is easy and a great way for you to be able to realise a quick profit and gain access to your cash.
You can sell your micro loans by visiting your Dashboard, and selecting Action. You will then be able to select the rate at which you want to sell your micro loan at. You can choose to sell your micro loans at up to 5% mark-up or mark-down.
Once you have selected your sale preferences, your micro loans will be listed in the secondary market.
Interest on micro loans is accrued on an incumbency basis, meaning that should you sell a micro loan, you will waive the right to the interest due on the next repayment date.

How much will my micro loans be sold for?

The outstanding principal amount lent, plus or minus the chosen rate of premium or discount selected.

Interest on micro loans is paid to the micro loan holder, so the best time to buy a micro loan is just before a repayment is due (check the repayment history to see if this has been made) and the best time to sell is just after a repayment has come in.

What is the Buyer's Rate?

Imagine a loan of £100 at 13% won in an auction. When some months later the lender sells this loan, they sell the loan of the outstanding capital (e.g. £93.27), which continues to earn the new owner, the buyer, the same rate of interest (i.e. 13%). The buyer pays more or less than £93.27, depending upon whether the original lender, the seller, applies a premium or a discount.

If the seller applies a premium of say 3%, then the buyer will pay £96.07 for this loan of £93.27. The new owner, the buyer, will continue to receive monthly interest payments equivalent to an annual rate of 13% of the outstanding capital each month (i.e. £93.27 at outset). Although the interest will equate to 13% of £93.27, it will equate to a lower % of the amount paid (£96.07) for the outstanding capital (93.27). This lower % is listed as the “Buyer’s Rate” and gives a more realistic indication of the interest which will be earned after the seller’s premium has been taken into account.

If the seller had offered this loan for sale at a discount, then the Buyer’s Rate would have been higher than 13%.

The value of the Buyer’s Rate depends upon the value of the premium or discount, and also the remaining term of the loan.

Why can't I sell certain micro loans?

Sometimes a loan will complete, but there will be exceptional circumstances that mean we temporarily prevent micro loan sales. For example, we could require a charge over a property to be registered with the relevant authorities. Should anything happen that means the loan has to be cancelled, there will not be a complicated trail of redress.

Also, if a business is in default, we prevent the sale and purchase of its micro loans.

When a borrower is late in repaying, what do I do?

In the event that a business is late in a repaying an instalment, we’ll be the first to know. As soon as we become aware that a borrower has fallen behind on their payments, we will contact them on your behalf to find out the reasons for missing a repayment and when we can expect it to come in.
If the business has run into financial difficulty, we will negotiate with them to find a way by which the balance can be repaid on different terms. In the event that the borrower is not able to repay the loan, you will be given the option to take a repayment holiday which allows the business to pay the interest and not the capital. Should the borrower continue to under-perform, we will get a debt recovery company involved in order to recover the debt.

For more information on our debt collection policy and process please see our Terms and Conditions.

What is promotional credit?

When users earn cashback by participating in our affiliate scheme or qualify for incentives, we pay you a promotional credit. This is added to your balance in the same way and can be used just like regular credit.

You can also earn promotional credit through active participation in loan auctions, we offer 0.5% cash back through a number of lending incentives for various lending behaviours. Visit the Loan Offers page of any live listing to see the various ways in which you can earn a little more.

Promotional credits may not be accumulated through the use of Transfer bids. However, if you bid in addition to your transfer bids, these will go towards any lender incentive you may be eligible for.

How can I cancel a bid?

It is only possible to cancel bids when there is a material change to the auction. For example, the loan amount requested is amended, or the security offered or auction deadline is changed.

In these situations, an update will be posted in the relevant Loan Updates tab informing lenders of their right to cancel prior bids with the instructions for requesting a bid cancellation and the deadline for requests.

What happens when a loan repayment is late?

Rebuildingsociety.com recognises the need to balance its recovery processes with taking a proactive approach to recover lender debts and working with a borrower to ensure that a mutually beneficial arrangement is reached for the full repayment of the debt.

Our process for following up on late repayments is as follows:

1. Where a repayment is not received on the day it is due, we will attempt to make contact with the borrower via email and phone, to make them aware that the repayment is late and ask that they see that the repayment is made immediately. Most late repayments are resolved this way.

2. When a repayment falls 3 days behind, it will then show as overdue on the repayment schedule that is visible to lenders. At this stage we will ordinarily post a note on the relevant discussion forum informing lenders that we are aware of the overdue repayment and report any communication we may have had with the borrower.

3. Each day that a repayment is not received, and we have not heard from the borrower as to why it is late and when we can expect payment, we will continue to email, call and text the Company / Director.

4. If a loan falls 14 days behind we will write formally to the Director/s at the company address to request repayment.

5. When a loan falls 30 days behind on a repayment we will write a formal warning letter to the Director/s of the company as well as relevant guarantors, informing them of the missed repayment and request that the overdue repayment and the next repayment be made. We will also make them aware of the consequences of default.

6. At 30 days overdue we will also suspend Micro loan trading.

7. If at this stage, we have still had no repayment or communication with the borrower, we will continue to try to make regular contact. If contact is made we will attempt to arrange repayment a debt restructuring plan or where necessary take relevant collections steps.

Where a repayment is more than 7 Days overdue, this will show up permanently on the borrowers’ repayment record, which is visible to lenders throughout the term of the loan.

What does “estimated probable recovery” mean?

When a loan defaults, we will attempt to recover it on your behalf. Whilst we attempt to recover the full accrued unpaid interest as well as capital, a recovery is not guaranteed. The legal recovery process can, depending on the circumstances, be long and uncertain. To provide you with more clarity on the progress of the recovery action, we provide you with an ‘estimate probable recovery’ figure that will give you our best estimate on the percentage of your capital debt that we believe can be realistically recovered.

With new defaults, we will normally set the probability to our average success rate, and then adjust it as we learn more from the solicitors enforcing the security on the debt.

This estimated amount is then displayed on the lender’s dashboard in pound sterling, to give the lender an approximation of the estimated value of their currently defaulting loans.

What do the different types of loan security mean?

Borrowers are required to offer security on our loans.

For loans up to £50,000 this can be a personal guarantee. For loans above £50,000, an asset must be offered by the borrower. When borrowers offer a personal guarantee, we ask them to fill out a Statement of Assets, Liabilities, Income and Expenditure (SALIE). This is signed as true by the borrower who receives independent legal advice.

When borrowers offer a charge on a residential or commercial property, we instruct solicitors to carry out checks on the title register to ensure the person offering the security owns the property. We also require the most recent mortgage statement and an independent valuation to estimate the loan to value ratio of the asset. If all of this information is to our satisfaction we will register a legal charge on the property on completion of the loan.

When borrowers offer a charge on a named business asset, such as a piece of machinery, we require an independent valuation from the manufacturer and an estimate of the likely resale value of the asset. We also need the asset to be removed from any existing asset debenture that may be in place.

When borrowers offer an all-asset debenture as security, we check that there are no other debentures in place, which are registered at Companies House. This entitles rebuildingsociety.com to become the primary creditor, should the business default on its loan and liquidators appointed to repay creditors through a sale of the business assets.


What is an Innovative Finance ISA?

An Innovative Finance ISA is a type of account which allows tax-free interest on peer-to-peer loans. It’s subject to the same rules on eligibility and limits as other types of ISA. We have added IFISA-specific provisions to our Terms and Conditions (Sections 40 through to 48); please read these here.

Please be aware that tax treatment depends on the individual circumstances of each client and may be subject to change in future. Please seek professional advice if necessary.”

How does rebuildingsociety.com manage your Innovative Finance ISA?

Your IFISA works very much like a normal rebuildingsociety lending account.
Once you have added funds to your rebuildingsociety IFISA account, you will be able to individually select the microloans you want in your portfolio or choose to use the Portfolio Builder to deploy your funds more quickly. Both these options make use of microloans available for purchase on the secondary market.
You can start lending with your IFISA account with as little as £10.
You will have a normal account alongside your IFISA account; this will collect any surplus balance should you credit an amount exceeding the maximum annual subscription.

Can I transfer existing ISAs into the rebuildingsociety Innovative Finance ISA?

Yes. Just use the Transfer In widget as part of the account opening process. See Section 45 of the Terms and Conditions for further information regarding the transfer in of your IFISA.

If I transfer an existing ISA to rebuildingsociety.com, will it maintain the tax efficiencies?

Yes, if you make a provider-to-provider transfer to ensure your ISA maintains its tax-free status.

How do I transfer out of my rebuildingsociety.com IFISA?

Please ask your new IFISA provider to email the Transfer Authority Form to support@rebuildingsociety.com. See Section 47 of the Terms and Conditions for further information regarding the transfer out of your IFISA.

Before being able to transfer your rebuildingsociety.com IFISA, you must divest from any loans you currently hold on your IFISA account, via the secondary marketplace. You should be aware that the secondary market is driven by supply and demand and we cannot guarantee a time frame in which your parts will be sold or whether all of your loans will be bought. Selling at a premium or dsicount on the secondary market may affect the rate at which parts are bought by other lenders.

Can I lend more than the ISA limit with rebuildingsociety?

Yes, you can lend as much as you want with rebuildingsociety, but you must adhere to the ISA allowance within the IFISA to qualify for tax-free interest.

If you have subscribed to the maximum amount in your rebuildingsociety Innovative Finance ISA (£20,000 for the 2017/18 tax year) and you want to lend more, you can do so through a normal rebuildingsociety account, which is set up automatically when your account is opened.

Once you reach your IFISA limit for the prescribed tax year, any further funds lent will automatically be assigned to a standard rebuildingsociety account.

How much is the ISA allowance?

For the 2017/18 tax year, the maximum is £20,000.

What happens if I pay too much into my ISA?

We’ll prevent you lending more than the ISA allowance for each tax year. However, if you have more than one ISA provider, it is up to you to make sure you don’t exceed the ISA allowance across all your accounts.
As an ISA Manager, we are obliged to provide regular reports to HMRC; as such, if you do exceed the total allowance, HMRC will notify you and your ISA provider of any corrective action.

I have a rebuildingsociety account but I haven’t opened an Innovative Finance ISA. How can I do this?

Opening a rebuildingsociety Innovative Finance ISA once you are registered with us is quick and easy.
Simply log into your account, click ‘Open IFISA Account’ and follow the instructions.
We’ll ask you to confirm the details we currently hold about you and enter your National Insurance Number. You’ll then just need to confirm your acceptance of the IFISA Terms and Conditions.

If a loan defaults in this tax year, but isn't recovered until the next tax year, does the recovery count towards my annual allowance?

No, it doesn’t. If a loan defaults in one tax year but is recovered in another, it simply adds back in to your IFISA balance.

However, if you close your IFISA or transfer it to another provider. Then we’ll need to pay the money into a non-ISA account so those funds will lose their ISA status.

Can I transfer my rebuildingsociety.com IFISA to a new provider if some of my loans are in default?

We can’t transfer any loans in default or arrears so they will need to stay in a your rebuildingsociety.com IFISA account.

If you send us a transfer request, we’ll sell as much as we can on the secondary marketplace and transfer those funds to your new provider. However we cannot guarantee a time period for this.

If you’re transferring an ISA you opened in the current tax year, you must transfer as much as possible. We’ll then move any loans in default or arrears into a non-ISA Rebuildingsociety.com account while we work on recovery.

What interest rate could I earn?

Average net returns on rebuildingsociety can vary. The level of interest you earn will depend on your decisions and the performance of the businesses you lend to. Please see the stats page for the latest information regarding performance.
Please be aware that as you are lending to businesses, there is a risk that the business may default on their loan and where this happens, your capital may be at risk. More details on the risks involved can be found at http://reb.so/risk.

Is a return guaranteed?

No, there are various economic factors that may potentially affect your return. Your return is likely to vary depending on your decisions, how much your loan, and the performance of the loans in your portfolio.

Is there any risk involved?

By using an IFISA, you are lending to businesses. There is a risk that these businesses will default on the arrangement. If this happens, we will try and recover your funds for you; however, if we are unsuccessful, you will lose your capital.

Please read about the risks involved before lending to any business. More details on the risks involved can be found at http://reb.so/risk.

Can I make a monthly transfer into my ISA?

Yes. Simply set up a Standing Order from your bank to pay into your rebuildingsociety Innovative Finance ISA on a regular basis using the reference number provided.

What are the fees?

We do not charge any fees to open an IFISA account. However, charges do apply for the transfer in and out of your IFISA.

See Rates and Fees for more information about charges payable.

Can I have more than one Innovative Finance ISA?

You may only use one Innovative Finance ISA in any single tax year. This means you could open one Innovative Finance ISA this year and in future years open additional Innovative Finance ISAs.

How many ISAs can I have?

In a single tax year, you can open and use one Cash ISA, one Stocks & Shares ISA and one Innovative Finance ISA. The total you pay in must not exceed £20,000 for 2017/18.

Who can have an Innovative Finance ISA?

Anyone who is at least 18 years old and is a resident in the UK. You can also apply if you’re a Crown employee (such as a member of the armed forces or civil servant) serving abroad, or the partner of a Crown employee. You don’t need to be a taxpayer to have an ISA but you must have a National Insurance number.

Can I open an ISA on behalf of someone else?

Only if you have a Lasting Power of Attorney for the person you want to open the ISA for. If that’s the case, please call us on 0113 8150 244 to discuss further.

Do I have to declare my ISA profits on my tax return?

No. Your ISA earnings are exempt from tax and there is no need to declare them provided you meet the ISA rules. Our tax statement excludes your earnings within your ISA.

How do I make a withdrawal from my rebuildingsociety Innovative Finance ISA?

Simply go to your dashboard, select ‘Take’, and enter the amount you would like to withdraw. To be able to withdraw money, you will need to ensure that you have Available Funds, and as such, you may need to sell some of your loans on the secondary market.

Are there any special offers for opening a rebuildingsociety.com IFISA account?

We do run special offers from time to time, please see our offers page for more information: https://www.rebuildingsociety.com/category/offers/.

If I transfer in my IFISA and the transfer is delayed, will I miss out on a special offer?

It depends upon the terms of the offer. Some offers may provide an incentive for opening the IFISA account, whereas other offers may require you to transfer in a specific amount by a certain date and delays in transfer could be a problem.

What happens to my IFISA if rebuildingsociety.com stops trading?

The loans your money is invested in are a contract between you and the borrower. As part of FCA regulation we are required to have a Living will with a third-party administrator that would take over the servicing of the loans. This administrator would also be an ISA manager so your investment would still be treated as an IFISA.

You wouldn’t be able to add more funds into the Rebuildingsociety.com IFISA and your borrower’s repayments wouldn’t be reinvested in more loans. As your borrowers repay you would be able to withdraw the funds or transfer them to another ISA provider.

Advanced FAQs…

Can I lend with Euros?

All loans are made in GBP, However you can credit our UK bank account using Transferwise. There is a small fee, but you are given a better exchange rate than you would get with most banks, because this is a Peer-to-Peer currency exchange platform. When you withdraw your funds you will need to provide your IBAN (International Bank Account Number) and SWIFT code.

We also use Transferwise to return your funds as Euros into your bank account. Most credits and withdrawals happen the same day, so there is not much of a delay for the currency conversion.

Please note that you…

  • may suffer from exchange rate fluctuations, which may effect your returns
  • are responsible for declaring your interest earnings to your local tax authorities

How does BidPal work?

BidPal is a feature that enables you to make the most of new opportunities as soon as they become available. It is the best way of using your capital so it is always working for you.

If you use BidPal, you will be able to choose the risk band, the rate that you will bid at and the denomination you would like to lend to each business.

So if you have £1,000 to lend, would like to lend to businesses that have been classified as being in Risk Band A+ and want to lend £100 to each business, you will essentially have placed bids to lend with 10 businesses within that particular risk band.

BidPal is principally a tool which allows you to lend to more businesses and in the process spread your risk.
BidPal will bid the amount specified for each risk band but there is a restriction to lend no more than 5% of your available funds to each new lending opportunity.

It only works for new auctions, not in the micro loan market. All purchases here are manual.

Why is my Miroloan Gain/Loss showing a negative number?

If you purchase a microloan on the secondary market, you may have paid a premium or benefited from a discount (of up to 5%). For example a microloan with £92 capital outstanding may be sold at a 3% premium, meaning the buyer pays £94.76 to the seller (who pays a 0.5% fee). The difference between what is paid by the new lender £94.76 and the capital outstanding amount of the microloan £92 is reflected as a small capital loss in the box for Microloan Gain / Loss. The inverse is true for microloans sold at a discount.

What are ‘Transfer Bids’?

After the first 6 months of repayments, an existing borrower may apply to re-finance. If one of your businesses reapplies, you may re-lend the capital they owe you onto the new loan auction. We call this a Transfer Bid because you are ‘transferring the capital owing from the old loan onto the new loan.’ This allows you to bid without having to add more funds to your account. Of course, you can always bid your available funds as normal.

So, if you had £100 outstanding on A Company Ltd, this would be shown on your Dashboard, ‘My Loans’ tab. If A Company Ltd refinance their loan, you may Transfer your £100 to the new listing (or your amount to the nearest £10). When the loan completes, Transfer bids are converted to ordinary bids.

You have the ability to choose, how much you would like to transfer, in what denominations you would like the Transfer Bids to be and at what rate you want them to be lent at.

Then when A Company Ltd’s first loan is redeemed on completion of their second listing, you will be repaid any capital outstanding and any interest due to you at the time of redemption. The value of your transfer bids (plus normal bids) are then taken from your balance and loaned to the borrower.

Transfer bids may not attract lender incentives on that loan. However, if you bid in addition to your transfer bids, these will go towards any lender incentive you may be eligible for.

What if I don't want to use ‘Transfer Bids’?

If you do nothing, you will be repaid your capital and interest due as normal when the loan is refinanced, which is usually when the latest loan auction completes and is accepted.

If I loan £100 out at 14% why don’t I receive £14 interest every year?

Whenever a repayment is due the interest is calculated based on the current capital outstanding. Each repayment is made up of an interest payment = and a capital repayment. So each period there is less capital owing, meaning that the subsequent period earns less in interest.

Repaid Capital will sit on your available balance, ready to re-lend or withdraw. While you have an idle balance held on the platform it is not normally earning you interest.

To keep earning interest, you need to keep lending your available balance. To make this easier for you, we created the BidPal feature

Is my repayment amount the same every month?

A varying repayment amount would be inconvenient for both the lender and the borrower, as such a formula is used to calculate the total amount of interest payable over the lifetime of the loan and then this is added to the outstanding capital to get the total amount repayable.

The total amount repayable is then spread evenly over the lifetime of the loan ensuring that each repayment is for the same value.

These repayments are then split between capital and interest to ensure that interest amount is still as it should be.

In our below example (£100 lent for 10 months at 12%) we have a total repayable of £105.50, £5.50 interest and £100 capital.

Splitting this £105.50 over 10 months gets us a repayment amount of £10.55.

By subtracting the interest we earn in each month from this total we can see the amount of capital being repaid:

Month Capital Outstanding Capital Repaid Interest Paid Total Repayment



















































As you can see, you are still earning the correct amount of interest and by repaying less capital early in the loan and more in the late stages the repayment amount can stay the same each month.

Are you regulated by the FCA?

Yes. We are a fully authorised platform, regulated by the FCA. This means we have obligations to treat customers fairly, maintain high standards for systems and controlls, diligently look after client assets and much more.

What happens to idle capital?

Money is held in a segregated client account regulated by the FCA, it’s one of the fundamental difference between us and banks who lend off balance sheet. Normally no interest is paid to lenders on idle capital, until the loan completion when the borrower starts paying interest. Therefore it’s in everyone’s interest to get the auctions funded quickly.

Lenders start earning interest from the time the loan has completed and draw-down been made.

What happens when a loan is refactored?

Refactoring a loan refers to the process where we take an existing loan with the original loan agreement and structure and create a ‘new loan’ with the same borrower but with new requirements.

We work hard to ensure that there is no change to the security in place as well as no extra barriers to enforcement should the borrower default on the ‘new loan’.

Legally speaking, the refactoring takes place through the signing and execution of an amended loan agreement which sits alongside the original loan agreement and works to amend the terms of the original loan agreement. The penalties for non-compliance and our enforcement powers remain unchanged, and our legal security documentation contains the requisite clauses to enable them to remain in effect for any loan amendment until the total arrears are repaid.

In most scenarios, the only thing that changes when a loan is refactored will be the repayment amounts, loan term and in some occasions, the repayment dates.

When a loan is refactored, a new listing page for the ‘new loan’ is created which will display the new repayment timetable, new term and any other changed features of the loan. There will always be a link to the ‘old listing’ so that lenders can see the borrower’s previous repayment history and the previous details of the loan. Usually, the reason for the refactoring will be made clear on the ‘Loan Updates’ tab.

In most cases, loan refactoring takes place because of repayment difficulties which have led to a borrower being unable to maintain regular repayment. Some borrowers may propose an alternate repayment plan to either request a repayment holiday or to extend the loan term.

We seek on all occasions to put the decision of whether to accept the new repayment proposal or continue with our legal enforcement action to the lenders who have capital in the loan. We do this through lender polls, which you should be notified of by email should you hold capital in a distressed loan which will be refactored. Should the majority of lenders vote to accept the new repayment proposal, the amended loan agreement is drafted and sent to the borrower, and once signed and returned, the new refactored loan page is created.