As an FCA authorised business we are required to have a back-up arrangement in place. This means that in the unlikely event that Funding Circle stops trading, our back-up provider would take over our existing loan contracts, receive repayments from borrowers, and process and distribute these payments to you.
Our current back-up service provider is Equiniti Gateway Limited t/a Equiniti Credit Services (”Equiniti”).
Equiniti is authorised and regulated by the FCA to manage loans and collect debt on behalf of investors.
Equiniti is also authorised by HMRC as an ISA Manager, and would be able to take over the Funding Circle ISA accounts. This means loans held in a Funding Circle ISA would keep their tax-free benefits.
However, as Equiniti is a separate legal entity to Funding Circle Ltd, it is possible that the protections given to Funding Circle may be reduced or no longer be available once the loans are transferred. This depends on its ability to maintain the permissions from the FCA.
Investor funds that have not been lent, or that have been repaid to investors and not lent out again, are held by us in separate client money bank accounts with Barclays Bank plc and National Westminster Bank. 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 if we were to go bankrupt.
We must note that protections only apply to cash held in our client bank accounts, and not to the funds invested in loans.
Lending through Funding Circle is not covered by the Financial Services Compensation Scheme.