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Your Latest Questions & Answers

By Jane Rey on 10th December, 2014 | Read more by this author

We've had a few questions from you and so we put them to a P2P lending company so you can get answers right from one of the horses' mouths.

Aldwyn Boscawen of Wellesley & Co.* managed to squeeze out some time to answer your questions.

Q. What happens to my money, in particular to the terms, conditions and fees and interest rates,  if the P2P [lending company] is bought out by another P2P organization?

A. “Yes so similarly to what happens when we lower our rates, existing lending terms are not affected by rates being lowered. It is just rates for new terms that are lower for new purchases of them.”

The matter is different for new lending, including re-lending loan repayments and interest after a takeover:

“Any takeover deal comes with its own terms and conditions. Wellesley & Co. is privately owned by the directors who have capitalised the business well to allow it to grow at the rate it has over the last year. In the event of a takeover Wellesley & Co. would do its best to protect its lenders from negative changes to Ts & Cs, fees and interest rates. Wellesley & Co. has the best interests of its lenders at the core of its business decisions.”

Q. What happens if the company is forced into liquidation? Is my loan considered an asset which could be taken by creditors?

“If the company is forced into liquidation, Wellesley has measures in place to manage the return of lender capital. When lenders commit funds for lending with Wellesley & Co., they are either matched against loans, or unmatched – although Wellesley & Co. still pays interest on these funds.

“Firstly, funds that are not on loan are held in a segregated client money trust account with Barclays Bank. Money held in a segregated client money account ringfences this as client money and so in the event of Wellesley & Co. being forced into liquidation, creditors are unable to touch these funds. They would be returned to lenders upon Liquidation.” [All financial Services firms operating with customer money should do this in accordance with CASS (FCA Clients Assets Sourcebook) rules.]

“Funds that are matched against loans are not considered to be an asset which could be taken by our creditors. Wellesley & Co. has created a robust corporate structure in order to ensure this. We would – in the event of liquidation – we would cease to make new loans and our security trustee would step in to administer the repayment on lenders from loans to borrowers as they repay.

“The trustee will manage the day to day operations of Wellesley & Co. with the assistance of the Wellesley directors.” [More information on this is available on the Wellesley website in the section Investor Security, under the heading What Are The Risks?]

“In due course, I aim to explain the corporate structure in a blog post/graphic of some sort, it's just currently I have not the time to translate it to something widely followable!”

Q. Do the assets/properties for a borrower have to be within the UK?

A. “We lend on a secured basis against assets in the UK.” [A small number of P2P lending companies open to UK lenders accept borrowers overseas and/or overseas assets.]

Got some more questions?

You might well find more answers to your questions in:

Our FAQs.

Our What the Heck is P2P Lending? guide.

*Commission, fees and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from Wellesley & Co. and other P2P lending companies not mentioned above either when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

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