Who operates Huddle Capital?
Huddle Capital is a subsidary of Aviation & Tech Capital Ltd.
How are your loans originated?
Borrowers find us through our website and are able to directly apply for financing. We also originate loans through a close association with third party brokers and introducers such as accountants and lawyers who have a close relationship with their business clients and are able to advise them on the best financing option available. Because of this partnership, we hope to attract high quality borrowers.
How do you assess your borrowers?
We only want to offer our investors highly curated lending opportunities, with this in mind we have a stringent assessment process in place for our loans.When we assess a new borrower we take in account a number of factors:
Credit referencing agencies (directors, shareholders and members of company)
Financial standing of the business (inc trends of performance)
Track record of the management team
The business’s cash flow and overall ability to repay the loan
Can I cancel my investment?
You can cancel your registration at any time until you start investing. Once your investment has begun you are unable to cancel any loans in progress, however, you are permitted to sell on your loans on the secondary market. There is no fee for the secondary market.
Can I access my money before the end of the loan term?
Once a loan is in progress you are unable to access your funds, however, you are permitted to sell on your loans on the secondary market. This is a free service. Purchases are subject to demand from lenders.
How do I invest my money?
If you wish to become an investor at Huddle Capital you will first need to register on our platform. You will then need to be verified by our system – once this is complete you will be able to deposit funds securely by a bank transfer.
Once your funds are deposited you can then review our borrowing requests and choose your investments. Once you have selected which lending opportunity you would like to invest in, just click the ‘invest’ button and select what amount you would like to lend the borrower.
How much money can I invest?
The minimum loan that an investor can invest is as little as £100 but there is no maximum with Huddle Capital. In order to comply with anti-money laundering regulations larger amounts in excess of £20,000 may be subject to additional security checks.
What fees do I have to pay?
Investors do not pay any fees to invest through Huddle Capital. Our fees are paid by the borrower.
What returns can I expect?
Depending on the type of investment you are making, and the level of risk associated we currently offer loans with a return from 6% – 16%, depending on the strength of the loan. Bear in mind that your actual return may be lower, taking into account default rates and your own personal tax situation.
What happens if a borrower stops paying?
If a borrower discontinues their loan repayments then Huddle Capital will commence default procedures after the second missed repayment.
What are your complaints procedures?
Customers of Huddle Capital can raise a complaint by email, phone or by post. We take any complaint very seriously, and in addition to responding and resolving any complaints, we also seek to identify any underlying weaknesses in our procedures and resolve them accordingly.
For our detailed complaints procedure, click here.
Is Huddle Capital Regulated?
Huddle is an Appointed Representative of rebuildingsociety.com, who is authorised and regulated by the Financial Conduct Authority. We therefore operate under their regulated license.
How Do I Qualify To Become an Investor on Huddle Capital Website?
To qualify as an investor, private investors and ISA investors will be required to undergo an identify and anti-money laundering checks. You must also be prepared to invest at least £100 for every investment you make on the platform.
How long are we locked into the investment?
Any uninvested funds can be withdrawn at any time. However, once your funds are invested in a loan, they will only be repaid over the life of the loan. Of course, it is possible to sell on the secondary market, but this may be on a discounted rate.
Can I automate the investment process?
We do have an autobid feature on our platform that allows your funds to be automatically invested based on the criteria you choose. Please bear in mind that this does not in any way constitute us providing you with investment advice or services similar to a discretionary fund. The autobid feature will invest in exactly the way you ask it to invest
How do we deal with defaults?
Firstly, we always lend on the back of security. As a minimum, we ask for a Director’s guarantee. Collateral shall be held in a Trust Company for your benefit. We will monitor the loan and collect payments or manage any defaults. Where a default has occurred, we will use the collateral that the trust company holds to recover as much of the loan as is possible.
How do I calculate my tax liability?
We provide you with access to a tax statement which shows your interest income for each tax period. You can use this on your self assessment or give it to your accountant.
Do borrowers have to meet minimum criteria before they qualify to borrow on the platform.Yes, before applying for a loan through Huddle Capital, borrowers will need to meet minimum eligibility criteria:
They must have a UK bank or building society account to facilitate repayments
They must be registered via UK Companies House
The business and Directors must meet minimum credit and fraud risk criteria which may include obtaining a minimum score from credit reference agencies
Their business must not have any outstanding CCJs
They must have registered through our online platform before we accept the loan and it is uploaded.
How are interest rates set by Huddle?
We use a matrix to determine pricing for every loan. There are several factors that determine the pricing of a loan, including the following:
Period of trading
Loan type and structure
Amount of the loan
Type and value of security
First or second charge lending
Underlying financial performance
What role does Huddle play to facilitate P2P loan agreements?
Different P2P lending platform provide different roles. We will:
Source lending opportunities
Provide a credit risk assessment
Present creditworthy applications on the marketplace for you to choose
Arrange the loan agreements
Facilitate financial transactions via a secure client account
Hold any collateral in a trust on behalf of lenders
Debt collection for late repayments
Debt enforcement of defaulted loans
We will not:
Provide a portfolio service whereby your funds are invested in loans without your knowledge
Is there FSCS cover?
No. Investments made on Huddle are not eligible for the Financial Services Compensation Scheme.
What would happen if Huddle Capital ceases business or chooses to wind down?
Huddle is constantly looking to progress with plans to scale our business and bring quality loan opportunities to our lenders.
Circumstances may arise where our strategy is no longer viable. This could be changes in market or economic conditions or regulation.
To prepare for this eventuality, and to comply with regulation, we have created a ‘Wind Down Plan’. The aim of this strategy is to act as a comprehensive plan for winding down the business to ensure minimal impact on everyone we do business with, including investors with loans through Huddle. It should be noted that this wind-down plan is intended to be enacted by the firm prior to any need for insolvency action. In the event of an unforeseen insolvency action against the firm, the firm will endeavour to work to this plan in collaboration with the insolvency or administrative partners as far as possible.
Wind Down Plan explained
The Wind Down Plan is aimed at ensuring an efficient wind down of the business and/or the loan book.
Situations where the Wind Down Plan would come into effect could include:Transferring the platform and business to another entity/owner. It is likely that the platform would continue as normal but would be held by new owners. Lenders would have the choice of whether to continue lending. We anticipate that the secondary market would stay open in order for lenders to continue to manage risk.
Selling the loan book. The proceeds of that sale would be used to repay lenders their capital and interest due.
In the event that the Wind Down Plan comes into effect, we envisage there being sufficient capital for Huddle to remain solvent while running down the loan book. If the wind down plan needed to be enacted, Huddle Capital has a wind-down in place with both our principal rebuildingsociety.com and our technology partner Aviation and Tech Capital Limited.
Together, Huddle Capital, rebuildingsociety.com and Aviation and Tech Capital (ATC) would ensure that the loan book is efficiently wound down.
Under this plan, rebuildingsociety.com Ltd would continue to manage and oversee client money, as they currently do as our regulatory principal. Client money (lender funds) would continue to be held in a segregated client account at Barclays Bank PLC.
The Huddle Capital platform technology is currently supplied and maintained by Aviation and Tech Capital Limited. During a wind-down phase, ATC will continue to host and maintain the Huddle Capital Platform and ensure that it remains accessible to existing lenders.
An operational wind-down team will remain in place at Huddle Capital. This team in conjunction with rebuildingsociety.com and ATC will ensure the smooth wind-down of the loan book and distribution of lender funds.
Operative clauses in contracts
The loans we arrange and monitor on behalf of lenders are not affected by our Wind Down Plan, as all loan agreements completed on Huddle Capital are between individual lenders and the borrowers, borrowers are still required to comply with the terms of the loans and the security arrangements we have in place.
Our Terms and Conditions with lenders specify that we are able to appoint a third party to manage loans if we are required to do so.
Where the Wind Down Plan calls for the loan book to be wound down over the natural term of the loans, we would take the following steps:Critical staff would remain in place to manage the wind down process. In an insolvency situation, the company may use insolvency measures to protect from potential claims, such as Administration or a Company Voluntary Agreement
The core team would intend to carry out the following actions:Reduce the functionality of the platform to simplify operations, namely – cease accepting new investors or deposits, cease advancing new loans or providing new funding on existing loans and suspending the secondary market. There may be limited operations of the secondary market to allow loan buyers to purchase from existing customers as a way to accelerate the wind down through those willing to purchase the loans
Have dialogue with borrowers to ensure repayments continue to be made; process repayments through the client money systems, return funds to investors’ accounts on the platform
The core team would continue to attempt to refinance some loans on the platform to other commercial lenders. This is intended to accelerate the return of funds to investors ahead of the standard terms of loans on the loan book.
Funds held in the client money account and funds paid into the client money account by borrowers over the course of the wind down would continue to be held in a segregated client money account operated under the existing CASS permissions of rebuildingsociety.com Ltd by its core team until withdrawn by investors via the normal process.
Risks – Wind Down Plan
We have engaged experts to advise on the adequacy of our Wind Down Plan and believe that they are fit for purpose.
There are always risks that assumptions made during the planning process prove to be incorrect in practice. Here are the risks we’ve considered and how we will address them:If there is insufficient funding available to pay for the costs of collecting the loan repayments over the life of the loans, that activity may cease leaving no means to return lenders’ investments to them. However, the income received by Huddle under the loan agreements, as detailed in our Wind Down Plan, is more than sufficient to cover the expected costs of winding down the loan book
Loans on Huddle are bilateral, i.e. they are between you and the borrower. Should Huddle cease to be in business those rights still apply and you are entitled to the monies lent to borrowers on a continuing basis. However, if Huddle ceases operation you will be entitled to receive monies held in the client account but those monies that have not been received from borrowers (i.e. future or outstanding payments) will not be due until they are paid by the borrower.
What are Huddle's Capital default rates and lending statistics?
Past performance is not indicative of future performance.*During 2019 an Interest Only Loan of 150K was written off to bad debt. This was a loan secured by motor vehicles. Following this bad debt Huddle no longer offer this type of facility without having a property charge.
**Calculations for expected loss does not include the 150K loan secured by motor vehicles as the product is no longer available.Last update: 18/02/2020