Fri, 25 Oct 2019 | ADMINISTRATION
Peer-to-peer (P2P) lending platform Funding Secure has gone into administration, the Financial Conduct Authority (FCA) has said, putting investors at risk.
CG Recovery has been appointed as administrator and is now in the process of contacting the firm’s investors. Funding Secure claims to have more than 5000 investors, many of whom will now be at risk of major losses after providing loans worth £80 million through the platform.
The company facilitated crowdfunded loans for the purchase and development of property, as well as loans which were secured against property and other high-value assets such as jewellery, cars and boats.
It ran into trouble following an increased number of borrowers being unable to repay their loans, while they also became caught up in the fraud lawsuit of art dealer Matthew Green, who is thought to owe the platform around £3 million.
While borrowers are expected to continue paying off their loans for the time being, CG Recovery have said it is unclear how much money will be recouped for creditors and investors, or when payments would be made to them.
CG said it was now “evaluating the company’s current financial position and working to maximise recoveries either in the short or longer term.”
In a statement posted on its website, Funding Secure said: "As a result of the administration no legal proceedings may be commenced or continued with against the Company without the consent of the Administrators or leave of the Court. The Company is now protected from any third party actions by virtue of a statutory moratorium."
The collapse of Funding Secure, which is based in Buckingham, comes after the FCA sent letters to peer-to-peer lenders last month warning them that poor practices were exposing investors to undue risks.
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