The 2019 ISA season is now in full swing, and it's as good a time as any to focus on financial planning - and, within that, looking ahead to your retirement years to ensure financial security.
What would happen if Lending Works didn’t exist?
Lending Works has put together a carefully considered plan to cover the unlikely event that the company ceased trading. We have an agreement with a back-up service provider who would step in to manage all of the open loan agreements to maturity, and the arrangement with our debt collection agent, Daniels Silverman, would continue. This arrangement is for the protection of our lenders and provides continuity for our borrowers.
Your loan agreements
The back-up service provider would continue to collect all payments due from borrowers and distribute the expected capital and interest payments to our lenders as usual. The loan contracts between lenders and borrowers remain unchanged. No new loan contracts would be entered into and so any un-lent funds would be immediately returned to lenders. The back-up service provider effectively becomes Lending Works by taking over all of the day-to-day loans management, and for the most part both borrowers and lenders will not notice a difference.
All existing policies and procedures will continue and Lending Works’ excellent customer service standards will be upheld.
How this affects our lenders
Lending Works holds all lending funds within a ring-fenced Trust, the structure of which is specifically designed to protect our lenders. This Trust is administered by a not-for-profit company, Lending Works Trustee Limited. The funds held within the Trust are completely segregated from the day-to-day operations of Lending Works, meaning that these funds cannot be used by the company to pay for its operational costs. These funds also cannot be used by any other third party apart from the back-up service provider.
Key points to note:
- The back-up service provider would charge an annual fee of 1% of the outstanding balance of loans which would therefore slightly reduce the returns received by lenders
- Loan contracts between lenders and borrowers would remain unchanged and therefore lenders would continue to receive their expected capital and interest payments, net of the annual management fee paid to the back-up service provider
- The back-up service provider would continue to collect all scheduled loan repayments in exactly the same way, including following Lending Works’ arrears and collections policies in the event of a borrower missing a payment or defaulting on their loan
- Any un-lent funds would be immediately returned to lenders
How this affects our borrowers
Key points to note:
- Loan contracts between lenders and borrowers would remain unchanged and therefore borrowers would be required to continue making their scheduled loan repayments
- The back-up service provider would continue to collect all scheduled loan repayments in exactly the same way, including following Lending Works’ arrears and collections policies in the event of a borrower missing a payment or defaulting on their loan
- Lending Works’ agreement with our debt collection agent, Daniels Silverman, would remain unchanged and they would be instructed when necessary if an account is in arrears or in default
- Your credit status would continue to be reported to Credit Reference Agencies - we report all payments made on time, late payments, missed payments, and defaults
Need more information?
If you would like further information about anything you’ve read on this page or anything else about Lending Works please do not hesitate to get in touch with us by calling 020 7096 8512 or emailing cs@lendingworks.co.uk.
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