Risk Warnings

Your capital is at risk and is not protected under the Financial Services Compensation Scheme. Fitzrovia Finance is authorised and regulated by the Financial Conduct Authority (IPRN 723810). It is your responsibility to assess whether making a loan is suitable for you, with particular regard to your risk appetite, investment term and your personal financial circumstances. We are not advising you on the appropriateness or suitability of any loan on our platform. We recommend that you take advice from an independent financial advisor if you are in any doubt as to whether making a peer-to-peer loan is suitable for you.

Fitzrovia Finance arranges loans between lenders looking for a return on their investment and corporate borrowers looking to fund property developments. Fitzrovia Finance hereby provides a Service that enables you to enter into, or purchase the rights to, certain peer-to-peer Loan Contracts that are secured under the Security Document(s) entered into by the relevant Borrower. Fitzrovia Finance is not a party to the Loan Contracts.

The terms used in this risk statement are also defined in the Fitzrovia Finance Service Terms which govern the operation of the Service.

Making a peer-to-peer loan is like any form of investing in that there are a number of risks. The key risk is that you may not get back the capital you invest and returns are not guaranteed. Your loan is also not protected by the Financial Services Compensation Scheme.
It is important you understand the risks associated with your loan.

The risk of default


We undertake comprehensive due diligence on all loans we place on the platform. There is however always a risk that there is an issue with the underlying investment, such that the loan does not repay or only repays in part. There is also the risk that the borrower can’t make their interest payments. Your capital is at risk and you may not get back what you invested.

What are the expected default rates?


The expected default rate for each set of Loan Contracts with each Borrower that are available via the Service is specified here: www.fitzroviafinance.com/statistics, along with a summary of the assumptions used in determining expected future default rates. The actual default rates are given here: www.fitzroviafinance.com/statistics.

Your estimated rate of return is stated on your lender’s dashboard taking into account fees and default rates on the interest you receive. The amount of income tax payable by you on interest income received is dependent on your individual circumstances and may be subject to change in the future.

How do we assess a loan?


We assess each Borrower’s creditworthiness and ability to afford to borrow under the Loan Contracts. These checks must be satisfied before funds will be paid out to Borrowers. Fitzrovia Finance takes a case-by-case approach to its property lending decisions. Our Loan Officers evaluate each loan request individually and a large number of criteria are taking into consideration when risk assessing a borrower and appraising a loan. Subsequently, our Loan Officers establish a risk band for the loan, which is communicated to our lenders on the web-portal along with the methodology we have used to determine the risk inherent to each loan.

We have developed the grid below for the classification of our loans by risk bands and we have identified each category by their level of bad debt. The grid in available here: www.fitzroviafinance.com/statistics. To determine the level of bad debt of a loan and therefore the risk band a property loan fits in, a strict methodology is followed by our Loan Officers. The methodology followed by our Loan Officer is available here: www.fitzroviafinance.com/statistics.

How do we collect an overdue debt?


The Security Document(s) provided by each Borrower are held for the benefit of the Lenders to that Borrower by Fitzrovia Finance Security Limited, acting as trustee. The type of Security Documents will be described on the relevant Loan Documentation.

If the Borrower misses a payment or only partially pays the amount due to you as the Lender, you authorise us or a Collections Agency, acting on your behalf, to contact the Borrower to attempt to collect an amount equivalent to the outstanding payment and any additional fees and charges due under the relevant Loan Contract. We will keep you informed of the progress of the attempts to collect the outstanding payment(s).

In the event of the occurrence of a default the Security Trustee will enforce all or any of the Security Documents and the relevant proportion of any sums recovered by the Security Trustee will be paid to you, subject to deduction of the costs of recovery (including legal fees and expenses and those of any manager, receiver or administrator appointed by the Security Trustee) from the gross proceeds recovered.

The net amount recovered will be apportioned to you according to the proportion of the total loan amount. The Security Trustee will keep you informed of the progress in enforcing the Security Document(s) concerned. It is possible that the proceeds recovered (if any) as a result of any recovery and enforcement activity may not be enough to cover the Borrower’s obligations to you.

Where are my unused funds held?


Any unused funds, and funds awaiting disbursement to Borrowers, are held by MangoPay SA in a segregated account separately from its own assets. MangoPay SA is a limited liability company incorporated in Luxembourg, with a capital of 2.000.000 euros and registered offices at 59 Boulevard Royal, L-2449 Luxembourg, listed under Number B173459 on the Luxembourg Trade and Company Register, approved as an electronic money institution by the Financial Sector Regulator (CSSF) and is authorised to carry out its business in the UK.

The risk that you can’t exit or sell the loan if you need to

Our average life of one of our loans is 16 months and they are therefore longer term investments. They are often also illiquid. We do provide the ability for you to sell your loan on the secondary market, but this will depend on the availability of a buyer for the loan and should not be relied on. When making a loan, you should consider your personal circumstances and what you might do if your circumstances change after you have made the loan.

How can I sell my loan on the secondary market?


If you wish to cash-out any of your Loan Contracts before they are due to be repaid in full, you may offer to assign your Loan Contract(s) to another lender via the Service by following the instructions in Clause 5 of the Fitzrovia Finance Service Terms and the Service. As above, it is possible that no other lender may wish to buy the Loan Contract(s), either as quickly as you wish them to, or at all.

The risk that the platform fails


There is a risk that Fitzrovia Finance as a firm may fail and cease to trade. Peer-to-peer lending platforms rely on the platform they operate to facilitate the repayment of loans. It is therefore important that we have mechanisms in place to manage this risk, in the unlikely event that Fitzrovia Finance ceased to trade.

What do you do to prevent the platform failing?


Fitzrovia Finance take risk management within the business very seriously. We have a business continuity plan in place to ensure that in the event of unforeseen interruptions to our business, there are processes and procedures in place to ensure business as usual. We monitor the risks to the business on an ongoing basis to ensure that where possible, we mitigate those risks.

What will happen if the platform fails?


If we were to cease trading for any reason, we have a contingency plan in place to ensure that your loans will continue to be serviced and administered to maturity. Alpha Real Property Investment Advisers LLP (trading as TIME Investments), a firm regulated by the Financial Conduct Authority, will administer the loan book and finalise any residual business of Fitzrovia Finance. TIME Investments has significant property lending experience and capabilities to manage and administer Fitzrovia Finance’s loan book run-off.

It is important to remember that the activities of all peer-to-peer lending platforms are not covered by the Financial Services Compensation Scheme.

Risk warning


Your capital is at risk and is not protected under the Financial Services Compensation Scheme. Fitzrovia Finance is authorised and regulated by the Financial Conduct Authority (IPRN 723810). It is your responsibility to assess whether making a loan is suitable for you, with particular regard to your risk appetite, investment term and your personal financial circumstances. We are not advising you on the appropriateness or suitability of any loan on our platform. We recommend that you take advice from an independent financial advisor if you are in any doubt as to whether making a peer-to-peer loan is suitable for you.

Find out how to get started

The first step is usually the most important one, whether you are interested in earning competitive returns on your investments or wish to access funding.

Learn more about why Fitzrovia Finance is right for you.

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