Our wind-down plan

Our regulatory obligations

As a P2P lending platform that is authorised and regulated by the Financial Conduct Authority, LendingCrowd is required to have a ‘wind-down plan’ in place that would set out what would happen if:

• we decided to strategically exit this market, or
• an unexpected event meant we were unable to operate our platform

Our wind-down plan aims to enable us to cease our regulated activities and achieve cancellation of our regulatory permissions in an orderly manner, with minimal adverse impact on our customers (lenders and borrowers), counterparties or the wider markets.

We have plans in place that would cover both a company-managed wind-down scenario – for example if we voluntarily decided to cease our regulated activity – and a wind-down triggered by events beyond our control.

Our wind-down plan is reviewed and approved by our board on an annual basis. It is also subject to ongoing review to reflect any material changes in our business or operating model.

A company-managed wind-down

Our wind-down plan allows us to identify, with confidence, that we have adequate resources (both financial and non-financial) in place to wind down the services in an orderly manner, especially under potentially challenging circumstance.

We consider that we are best placed to manage the wind-down of the services in the best interests of lenders and therefore we will continuously monitor available management information to ensure we monitor for any potential triggers of a wind-down scenario.

What happens if LendingCrowd cannot operate its service?

Lenders would still continue to receive repayments on loans originated with LendingCrowd, because all loan contracts are between borrowers and lenders and would still remain valid.

Under FCA rules, we must appoint a third-party standby servicing company to administer the loan book in the event that LendingCrowd is no longer able to do so.

We have appointed a standby servicing company, The Nostrum Group Limited (trading as Equiniti Credit Services), to manage and administer the loan book should this situation arise. The standby servicer can also perform ISA manager activities and would continue to administer loan holdings held in a LendingCrowd ISA. All lender funds are held in a separate client money bank account and don’t form part of LendingCrowd’s assets.

Lenders would be unable to add new funds and no new loans would be issued by LendingCrowd.

In the event of a wind-down, borrowers would continue to make their monthly repayments, which should flow into lenders’ accounts as normal. Failure to do so could lead to recovery action, affecting the borrower’s credit rating and subsequent ability to raise further capital.

When lending to businesses, it’s important to remember that your capital is at risk.