Lending Works gets full authorisation, ISA manager status to follow

Consumer lender Lending Works becomes first P2PFA member platform to be fully authorised by FCA.

Lending Works, a consumer lending platform which offers a level of insurance coverage to investors, has become the first member of the Peer-to-Peer Finance Association to be fully authorised.

Peer-to-peer lenders in the UK have been caught in a kind of regulatory purgatory since filing for full authorisation with the FCA towards the end of 2015. The majority of platforms continue to operate under interim permissions, and as such remain unable to offer Innovative Finance ISA investments to lenders.

Now that the company has been authorised, Lending Works is free to apply to HMRC for ISA manager status. Speaking with AltFi, Lending Works CEO Nick Harding said that the HMRC application is an administration process, rather than a review process – in other words the platform cannot be denied ISA manager status for long.

“With full authorisation in hand, the next step for us is to launch our new ISA – something we have spent much of the past few months preparing for,” said Harding. “Given the great benefits this new tax-free wrapper will bring, the level of enthusiasm among our lenders, and indeed consumers within the wider sector, for the new IFISA has been substantial. We very much look forward to delivering this new product imminently.”

Other peer-to-peer lenders such as Funding Circle, Zopa and RateSetter continue to await the green light from the regulator. Lending Works joins a handful of fully authorised, mostly early-stage peer-to-peer lending platforms – a group which includes Peer Funding, Crowd2Fund and Crowdstacker.  

Harding suggested that the fact that Lending Works is smaller than the likes of Zopa and RateSetter may have helped to speed up the authorisation process. He said that tweaks to technology were easier for Lending Works to implement, since the platform isn’t bogged down by legacy issues.

Lending Works has lent a little over £35m to date, and has a 0.51 per cent market share of the UK’s peer-to-peer lending sector over the past 3 months, according to the Liberum AltFi Volume Index UK.