Borrower default

Peer-to-Peer lending involves matching investors who want a better return on their money with borrowers who require a loan at a fair interest rate. As with all Peer-to-Peer lenders, the biggest risk posed to investors is if one of their borrowers does not repay their loan. This means that lenders’ capital is at risk.

Unlike traditional Peer-to-Peer lending companies, we only participate in asset-backed lending, which means that the total value of the loan is secured against an asset. If the borrower does not repay their loan, we can sell the asset to seek to recover any shortfall. We only lend to borrowers with high quality assets that we believe could be sold readily.

Operator insolvency

If Wellesley & Co were to stop trading for any reason, it would present some risk to you in that we would no longer be able to manage borrower repayments to your account. We have taken a number of precautionary steps to ensure that, in the unlikely event of our insolvency, you would have protection.

  • All customer money that is not on loan is held in a segregated client money trust account with either Barclays Bank or Lloyds Bank, London.
  • The security provided by a borrower in favour of the loan is held by an independent Security Trustee.
  • We have made arrangements with our Security Trustee to take over the administration of our customer loans in the case of Wellesley & Co no longer trading. The trustee will manage the day-to-day operations of Wellesley & Co to ensure that the platform can continue to be offered to existing customers and that all borrower repayments of interest and capital are credited to your account as normal. The directors of Wellesley & Co have committed to assist the Security Trustee and the costs of operating would be covered by the interest rate margin in each loan.

Property market risk

For loans that are secured against property, the borrower’s ability to repay the loan would likely be affected if there were a dramatic downturn in the UK property market.

If such a situation were to occur, the management of Wellesley & Co would consider any claims which may be repaid using the company’s own capital.

Interest rate risk

As with any fixed-term loan or bank term deposit, there is a risk that interest rates could increase before the end of the committed term, which would mean that you would not be able to move your capital into a higher interest-bearing loan until its maturity. Whilst this is not necessarily a risk to your capital and interest, it is a consideration that you should make before committing your funds.

Your investment is not covered by the FSCS

Investing in Peer-to-Peer lending involves risk to your capital. If you suffer a loss, you are not entitled to compensation from the Financial Services Compensation Scheme (FSCS). Although Wellesley & Co is regulated by the Financial Conduct Authority (FCA), this does not mean that customers’ funds are covered by the FSCS.

Frequently asked questions




Understand all the risks?

Investment through Wellesley & Co involves lending to individuals or companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower fails to repay the loan. In that event, Wellesley Finance would attempt to recover the funds outstanding. However, such security arrangements do not guarantee full return of capital and income. Peer-to-Peer lending is not covered by the Financial Services Compensation Scheme.

Still not sure?

Speak with a person

0800­ 888­ 6001