Lending through Funding Circle is not covered by the Financial Services Compensation Scheme.
As an FCA authorised business we are required to have a back-up servicing arrangement in place. This means that in the unlikely event that Funding Circle ceases to trade, the back-up service provider would take our place in operationally managing and administering existing loan contracts between investors and borrowers. It would continue to receive loan repayments from borrowers, and to process and distribute these payments to you.
Our current back-up service provider is also authorised by HMRC as an ISA Manager, and would be able to take over the administration of Funding Circle ISA accounts. This means loans held within a Funding Circle ISA would keep their tax-free benefits.
Investor funds that have not been lent to borrowers are held by us in a segregated bank client account with Barclays Bank plc. These funds are completely separate from Funding Circle’s own money and we cannot use client money for our own business purposes. These funds do not form part of our assets which means that they would not be available to creditors in the event of our insolvency. Client funds are ring-fenced in a separate bank account and held on trust for investors in accordance with the FCA’s Client Money Rules.