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Funding Circle Collections Policy Shake-Up

We have helped over 500 individuals facing personal guarantee claims relating to defaulted Funding Circle business loans over the past 14 years or so. During this time, Funding Circle have varied their recoveries policies on a number of notable occasions, with their processes and approach to collections being remarkably consistent for long periods between these changes.

Funding Circle loan contracts typically include an inbuilt interest provision for the full intended length of the loan term. For example, if a loan is set to run for 6 years, the total amount repayable will include all of the interest that will fall due across the 6-year repayment span.

They have this month begun to implement a new policy that which overturns their previous stance to waive future interest in an agreement if payment is made prior to that interest being due, to now demanding payment of the full sum including future interest as part of longer-term settlement agreements.

This coincides with Mel Loades’ comments regarding the failure of the FSB’s super-complaint and the FCA’s response to deal with this very issue of demanding interest that has not yet accrued from guarantors following the default of business loan agreements offered in an unregulated environment by secondary lenders to limited companies. You can read more about the complaint and Mel’s comments HERE 

Prior to this change, Funding Circle have for some time been agreeable to long-term settlement agreements for Guarantors which allow individuals to make affordable payments while retaining the option to settle at a reduced final sum should they later be able to pay off the balance within the loan term, only paying interest up to the month that final settlement occurs.

Of course this change may also open up new opportunities for perhaps even more favourable settlements for alleged guarantors, though it will undoubtedly benefit individuals with quick access to lump sums (and/or smaller outstanding balances) disproportionately. Funding Circle, like other secondary lenders, continue to remain wedded to seeking security on property above all else.

If you require assistance regarding a Funding Circle Personal Guarantee claim and wish to better understand your options and best protect yourself and your property, please contact us HERE

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