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What happens if Funding Circle goes out of business?

Lending through Funding Circle is not covered by the Financial Services Compensation Scheme. Investment firms, including Funding Circle Ltd, are required to separate client money from their own resources. We are not permitted to use client money in the course of our own business activities and your money would be ring-fenced in the unlikely event that we became insolvent. We have put in place comprehensive arrangements at Funding Circle so that you would continue to receive payments on the loans you have originated on our platform and any funds that have not been lent will be protected in accordance with FCA’s Client Money Rules:

  • At Funding Circle, rather than lending to a bank, you are lending to lots of small and medium sized UK businesses, and all loan contracts completed are directly between investors and borrowers. These contracts would remain in place and be unaffected in the unlikely event that Funding Circle were to fail or become insolvent.
  • We have in place comprehensive arrangements to continue to administer loan contracts held between investors and borrowers. In the unlikely event of Funding Circle becoming insolvent, we would transfer the servicing role we perform on all outstanding loans to a third party back-up servicer, who would step in and continue to collect repayments from borrowers, and distribute these to investors.

Any funds that you have not lent are held in a segregated account at Barclays Bank plc. In the event that Barclays Bank plc were to become insolvent, a claim under the Financial Services Compensation Scheme up to £85,000 may be possible.

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