P2P Money Blog

The Manchester based peer-to-peer lending platform Collateral has gone into administration. Lenders were presented with the following message as of Monday:

We are currently in the process of updating our servers and our network infrastructure.

We apologise for the inconvenience and are working to get everything back to normal as soon as possible.

What originally appeared as an unannounced server update became apparent that this was something more. Collateral was one of the last platforms still operating under interim permission from the FCA, but it appears those permissions lapsed at the end of January. Emails received prior to February appear to confirm this as they contained the following text in the footer, which was removed in February:

Collateral (UK) Ltd is authorised and regulated by the Financial Conduct Authority (FCA)

At 8:45am today and email was sent to lenders stating:

An update is being prepared and will be emailed to all lenders later today.

Thank you for your patience.

At 10:36pm today the promised email was sent to lenders stating the company is now in administration.

COLLATERAL (UK) LIMITED - IN ADMINISTRATION (the Company)

I am writing to advise you that I was appointed Administrator of the Company on 28 February 2018 and enclosed with this letter is formal notice of my appointment.

Please note that I am licensed to act as an insolvency practitioner by the ICAEW. As such, I am bound by the Insolvency Code of Ethics when carrying out all professional work relating to an insolvency appointment.

The current position

The Company is continuing to trade under my supervision, however for the timebeing, until the Company position is clarified, the Company will not be facilitating any new loans or allowing the transfer of any loan portion.

I understand in the circumstances, investors and borrowers will have a number of queries with regard their loans and investments, consequently a question sheet is attached for your information, which will hopefully be able to answer these queries in the interim.

...

A further letter explains the impact on lenders and confirms that the administration was due to the fact that is was unable to trade without FCA authorisation.

COLLATERAL (UK) LIMITED ? IN ADMINISTRATION (?the Company?) CESSATION OF NEW LOANS AND LOAN TRANSFERS

Introduction

Collateral (UK) Limited has gone into Administration as of 28 February 2018 with Mr Gordon Craig being appointed as Administrator. With immediate effect the Company has suspended the facilitation of loans or the transfer of portions of loans via its website. It is important to note that this does not amount to a cessation of trading and you should note the action you should take below.

Please note that your investment is safe and this is a procedural and compliance issue.

Why has this happened?

The Company was operating in the belief that it was authorised and regulated by the Financial Conduct Authority under interim permission. It has transpired that this is not the case and consequently the Company has ceased lending.

What does this mean?

For the timebeing, until the Company?s position is clarified, it will not be facilitating any new loans or allowing the transfer of any loan portion. As the Company is not authorised and regulated by the Financial Conduct Authority you are not afforded the protections which are afforded to customers of entities which are so authorised and regulated.

Is my money at risk?

The main difference between the previous situation and the current situation is that if the Company became insolvent and you suffered any loss you would not be able to recover any of those losses through the Financial Services Compensation Scheme.

It should be noted however that you have never had the ability to make a claim for losses suffered as a result of any borrower becoming insolvent and unable to repay any loan you have made.

I have lent money via the Collateral platform do I need to do anything?

No. Subject to the borrower continuing to make payments of interest and capital those will be returned to you in accordance with the Collateral terms and conditions.

I have borrowed money via the Collateral platform do I need to do anything?

You should maintain making payments in accordance with your loan agreement. If you do not then you are at risk of recovery proceedings being taken against you.

I hold a portion of a loan and want to transfer that?

You would not be able to facilitate this through the platform.

If I am unsure what should I do?

If you are unsure about your position you should take independent legal advice from a solicitor or other suitably qualified professional.

What is the future for Collateral?

The Directors of the Company have recently appointed new external counsel and specialist compliance consultants with regard their business model and approach. In terms of the current business model and the Company?s correspondence with you:

1. The Company has ring fenced the existing loan book and will look to wind this down over the life of the loans in an appropriate way.
2. The Company is reviewing how it might best continue the business, a number of potential routes forward have been identified but these are still being assessed.

Collateral was voted one of the top three peer-to-peer lending platforms of 2017, and we will need to see what the collateral damage will be to the rest of the sector.  Join the discussion on the P2P Independent Forum.

There have been 10 films, 11 songs, one album, a book, a board game and a TV series all entilted "Easy Money".  Joining this long list is now a peer-to-peer lending platform from the "easy" family of brands.

easyMoney offers a regular lending account, an Innovative Finance ISA and a tax-free pension investment account, all with an estimated return of 4.05% (capital at risk).  Lenders investing a minimum of £1000 will become a easyMoney plus member which offers discounted gift cards, cinema discounts and exclusive offers.

The brand with it owner - Sir Stelios Haji-Ioannou - is perhaps the highest profile individual to enter the peer-to-peer lending space.  Another high profile individual, Nicola Horlick, launched Money & Co in May 2014.  easyMoney will also be competing with the established brands such as Funding Circle, Assetz Capital and Lendy.

The leading European peer-to-peer platform Mintos has launched its first loan originator from the United Kingdom.

1pm is an FCA accredited non-bank finance provider which is publicly listed on the AIM market on the London Stock Exchange.  The company provides various loan types to small and medium enterprises (SMEs).  On Mintos 1pm now offers business loans for investment in Sterling, and lenders can enjoy annual net return of up to 11%.

?The United Kingdom has one of the largest alternative finance markets in the world. We are very excited to have expanded Mintos into this geography by launching 1pm on the marketplace. The company is a great addition and offers investors on Mintos a new geography and further opportunities in GBP investments. We look forward to this partnership with 1pm and to seeing further partnerships arise in this market,? says Martins Sulte, CEO and Co-founder of Mintos.

Founded in 2000, 1pm was listed on the London Stock Exchange in 2006.  The company is dedicated to helping the UK economy grow by providing finance to businesses.  It offers many finance solutions to SMEs within the UK including asset and vehicle finance, hire purchase, commercial loans and invoice financing.

?An important part of our strategic growth plan is to harness the benefits of financial technology. By joining the Mintos marketplace, we will now be able to accelerate our loans business origination and to access retail global investors efficiently, a funding source that would be unavailable to us without this digital capability,? says CEO of 1pm plc Ian Smith.

1pm has a total lease, loan and invoice finance portfolio of £130million.

RateSetter has announced details of their Innovative Finance ISA which will be launching in February.

Here is the email sent to existing lenders:

The RateSetter ISA will launch in February 2018 and will initially be exclusively available to existing RateSetter active investors. You will have until 5 April 2018 to invest your 2017-18 ISA allowance, up to £20,000, in a RateSetter ISA.

After April 2018, we will accept transfers of ISAs, which means that you will be able to transfer funds from all types of ISA accounts into your RateSetter ISA while retaining the benefit of the tax-free wrapper.

As a result of the launch of the RateSetter ISA, we will be making some changes to the Lender Terms to cover the new ISA product. We will let you know when the new terms go live and provide you with a copy.

There is still time for new customers join to RateSetter.  New customers can receive a £100 bonus when they invest £5000 or more.  Terms & conditions apply and this promotion ends 11th April 2018.  Capital is at risk.

RateSetter also provided an update of the composition of their loan portfolio.  The platform is best known for their personal loams which represent 71% of their total loan portfolio.  Business lending represents 12% of their loan portfolio, with property lending representing 13%.  Over the last 3 months property lending represented 32% of loans, which indicates that RateSetter has been increasing its property lending.

We are pleased to announce the winners of the P2P money Preferred P2P platform award 2017, as voted for by members of the P2P Independent Forum. The winners are as follows:

WINNER: MoneyThing

RUNNERS-UP: Collateral, Assetz Capital

There is also a noteable mention for Unbolted, who showed the largest increase from the vote in 2016. Of the big three peer-to-peer platforms RateSetter and Funding Circle were fifth and nineth respectively, both rising from their vote in 2016. The highest place European platform was Mintos in eleventh.

The members of the P2P Independent Forum are some of the most knowledgeable individuals on peer-to-peer lending, and as such these awards should carry some weight. The winners of the P2P money awards 2016 were MoneyThing, Lendy (previously Saving Stream) and Assetz Capital.

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