General

What is crowdfunding?

Crowdfunding is the process of raising money – "funds" - directly from "the crowd". Typically, a large number of people each contribute a small sum of money. This money is loaned to a business, which will always be a limited company or a limited liability partnership.

What is Money&Co.?

We are a crowdfunding platform, regulated and authorised by the UK's leading regulatory body, the Financial Conduct Authority. Money&Co.'s CEO is Nicola Horlick, a well-known investment manager. Money&Co. was founded in 2013 to help British businesses get funds to finance growth, and to provide lenders with a good return on their money.

Can I be a lender?

Yes, providing that you understand the potential risks and benefits of lending to businesses on this site. It's also important that you understand the fees and costs of lending. We also have to check that you are who you say you are – this "Know Your Client" process is required by financial regulators, and is designed to prevent fraud and money laundering.

Can I sign up as a lender if I live on a UK Crown Dependency (e.g. Isle of Man, Channel Islands)?

No. HMRC considers the Channel Islands and the Isle of Man as a non-UK residency, and in these circumstances Money&Co. would be required to withhold tax on behalf of lenders. Money&Co. does not have the facility to effect this process at the moment and as such cannot accept lenders from these Dependencies.

What are the risks of being a lender?

When you lend to a small or medium-sized business, you inevitably take on risk. While we do extensive credit analysis of businesses seeking funds, it is possible that a business may fail. In that case, you may lose all or part of the money you have loaned to the business. Your capital is at risk, as is the income you would have been entitled to. You should invest only money that you are prepared to lose - and of the money you invest in small or medium-sized businesses, it may be prudent to spread your risk by investing across a range of companies operating in different commercial sectors. This is called building a diversified portfolio.

There are other risks associated with making fixed-rate, fixed-term loans. You may find that your money could earn a better rate of return elsewhere because interest rates have risen significantly but your money is locked in (interest-rate risk). If you decide you need to realise the cash lent through Money&Co., you may find that you cannot sell your loan at a price you are happy with (there is no guarantee of finding a buyer). You may have no choice but to hold a loan because the borrower has missed a payment and you are not allowed to sell in the loan market when this happens (liquidity risk).

What do the credit ratings mean?

The credit ratings given for each loan equate to the relative risk of lending to each business (A+ the lowest risk, C+ the highest risk). The indicative interest rate for each credit rating is given below. This represents what we believe is a broadly appropriate interest rate for each category (these represent a gross rate, and do not account for Money&Co.'s fee for lending). We stress this is a set of indicative rates. These indications should not in any way be construed as advice.

A+: 7% A: 8% B+: 9% B: 10% C+: 11%

Can my company be a borrower?

Yes. Here's the practical process: You can apply for loans through us. We will check your company's finances and if we think it is creditworthy, we will give it a risk rating. Our experienced team of credit analysts assesses businesses, backed by a powerful system to help us do it quickly and fairly. For more information take a look at the borrowing section.

What are the risks of being a borrower?

When you borrow money you're staking your reputation, the goodwill of your business, and its main assets. Loans from Money&Co. lenders will always be secured by a debenture over the assets of the business. In some cases, borrowers may be asked to give personal guarantees for loans. You may also want to offer security over land and buildings if it is available, as this may improve your risk rating and make lenders more comfortable lending to you. For more information take a look at the borrowing section.

How is Money&Co. regulated?

We are a loan-based crowdfunding firm, and we are regulated by the UK's leading regulatory body, the Financial Conduct Authority.

Is Money&Co. a member of the UK Crowd Funding Association (UKCFA)?

Yes. We have signed up to the UKCFA's code of conduct, as evidenced by the black UKCFA icon on our website. We are audited by the UKCFA annually to ensure that we adhere to best practices of fairness and transparency in the industry.

Why does membership of the UKCFA make a difference?

It shows that, along with the highest levels of legal and regulatory obligation as required by the FCA, we have voluntarily adopted the best practices in the industry.

Am I protected if Money&Co. goes bust?

Our regulatory and legal obligations, as required by the FCA, and the UKCFA code of practice, all require Money&Co. to keep lenders' money separately. A similar rule applies to the funds held by investee companies. If Money&Co. goes bust you will be able to claim these separately held monies.

Am I protected if the company I lend to goes bust?

As a lender, your money is always at risk. If the business you invested in goes bust you may lose some or all of your investment as the liquidators of the company sell its assets and distribute the cash to you and other creditors of the business. You are a secured creditor because we always take a debenture charge over the borrowing company's assets. A debenture is a way of asserting a claim over assets if things go wrong.

It is likely that there may be other secured creditors who get paid before you, but you are likely to recover more of your capital than general, unsecured creditors. This is why a loan secured by a debenture offers better security than a loan secured on a director's personal guarantee. Holders of such loans rank as unsecured general creditors in the event of the borrower's going into liquidation.

Is crowdfunding the same as the Enterprise Investment Scheme (EIS), or the Seed Enterprise Investment Scheme (SEIS)?

No. Companies seeking to sell stakes in themselves may do so under the terms of the Enterprise investment Scheme, or the Seed Enterprise Investment Scheme. These are tax-incentive schemes designed to persuade investors to become part-owners of businesses seeking funds. Money&Co. offers funding via loans. You will not own a stake in these businesses, and you will not qualify for EIS nor SEIS tax breaks. You will, however, shortly be able to include your Money&Co. loans in an ISA or NISA (new ISA) as announced in the 2014 Budget.

How do I reset my password / log in?

If you try to log in and you have forgotten your username or password, you will have the option of resetting. Just follow the instructions on the page.

How can I contact you?

You can contact us via the site. Go to "Contact Us" and follow the instructions.

Is the Money&Co. website available in large-print, Braille or audio/screen-reader versions?

Most computer operating systems allow you to zoom in (see "View" on your screen) and have a read-text function. We are working on a Braille function.

How secure is the Money&Co. website?

Our IT infrastructure is hosted by a leading global IT hosting company that ensures physical and operational security of our systems and data, and has been certified as ISO 27001/2 compliant annually since 2009. We also ensure all website traffic is secured by 2048-bit encryption. Our Barclays and Barclaycard banking and payment platforms conform to similarly high standards of security protocol. Please remember that the money in your account is held in the same way that a bank would hold money on your behalf and so it is essential that you do not give your username or password to anyone else.

How safe is my personal information?

Your personal information is very safe, but please ensure that you do not give your username or password to anyone else.

Who actually stores my information?

The information that you have given us is held on Money&Co.'s systems, and is not available to anyone else as you are protected by UK Data Protection legislation.

Why does Money&Co. require me to use a display name?

It is no more and no less than an attempt to give you a little privacy. While transparency and openness in financial dealings are of the utmost importance to effect legally binding deals, we are concerned to protect our borrowers and lenders from vulgar abuse and other undesirable side-effects that can come with internet transactions.

What happens if I can't make the site work?

We hope there'll be no glitches at our end. One small problem is that the borrower registration part of the site doesn't support some versions of the Firefox browser. We're working on this now. In the interim, please use another browser - and the problem should go away.

And what if I want to complain?

You should visit "Complaints" and initiate the complaints procedure. We adhere to best practice, and will deal with complaints fairly and promptly.

Lending

Why do I need to read the Lender Terms?

You should read the Lender Terms because they set out the risks inherent in making a loan to a Money&Co. borrower. You need to be fully appraised and aware of these risks before lending.

Can I be a lender?

Yes, providing that you understand the potential risks and benefits of lending to businesses on this site. It's also important that you understand the fees and costs of lending. We also have to check that you are who you say you are – this "Know Your Client" process is required by financial regulators, and is designed to prevent fraud and money laundering.

What are the risks of being a lender?

When you lend to a small or medium-sized business, you inevitably take on risk. While we do extensive credit analysis of businesses seeking funds, it is possible that a business may fail. In that case, you may lose all or part of the money you have loaned to the business. Your capital is at risk, as is the income you would have been entitled to. You should only invest money you are prepared to lose - and of the money you invest in small or medium-sized businesses, it may be prudent to spread your risk by investing across a range of companies operating in different commercial sectors. This is called building a diversified portfolio.

There are other risks associated with making fixed-rate, fixed-term loans. You may find that your money could earn a better rate of return elsewhere because interest rates have risen significantly but your money is locked in (known as interest-rate risk). If you decide you need to realise the cash lent through Money&Co., you may find that you cannot sell your loan at a price you are happy with (there is no guarantee of finding a buyer). You may have no choice but to hold a loan because the borrower has missed a payment and you are not allowed to sell in the loan market when this happens (known as liquidity risk).

Am I protected if Money&Co. goes bust?

Our regulatory and legal obligations, as required by the FCA, and the UKCFA code of practice, all require Money&Co. to keep lenders' money separately. A similar rule applies to the funds held by investee companies. If Money&Co. goes bust you will be able to claim these separately held monies.

Am I protected if the company I lend to goes bust?

As a lender, your money is always at risk. If the business you invested in goes bust you may lose some or all of your investment as the liquidators of the company sell its assets and distribute the cash to you and other creditors of the business. You are a secured creditor because we always take a debenture charge over the borrowing company's assets. A debenture is a way of asserting a claim over assets if things go wrong.

It is likely that there may be other secured creditors who get paid before you, but you are likely to recover more of your capital than general, unsecured creditors. This is why a loan secured by a debenture offers better security than a loan secured on a director's personal guarantee. Holders of such loans rank as unsecured general creditors in the event of the borrower's going into liquidation.

How do I start lending?

The first step is to look at the businesses that have applied for loans from Money & Co. They will all have had their finances checked and been given a credit rating by our credit analysts. Then you can bid for a loan. You need to say how much you want to lend, and at what rate. The auction will close at a specified time. At this point, if the required amount has been raised, the auction closes, and the business will receive its funding, and begin to make monthly payments. You can also choose the "auto-lend" function, which will spread your money automatically across a range of borrowers.

Can I be a lender AND a borrower at the same time?

Yes, providing you meet the requirements of the lending and the borrowing process.

Are my details visible to the borrower / others if I bid?

Yes. Live bids are visible to the businesses seeking funding, and other would-be lenders. Money&Co. does not do 'blind' auctions.

Is there a maximum or minimum amount I can lend?

There's no maximum, other than the amount the borrowing business is seeking. You can do the entire amount of the loan, if you wish. However, diversifying loans across several companies is an excellent way of spreading risk.

The minimum credit the Money&Co. site will accept is £100. You can break that down into individual bids of as little as £10. In theory, you could bid to spread a credit of £100 across ten companies, at £10 a loan.

How do I transfer money to the company I'm lending to?

You don't. You transfer money to us through the website, where it will be held in a separate account, untouched until the money is ready to be transferred to the company. There is a time-out date, which is usually two weeks from the auction start date. If the borrowing company decides to proceed after a successful auction, it must complete loan documentation. The process will take a little longer if, for example, property is provided as security, when a valuation must be completed. Once this process is finished, we'll transfer the monies to the borrower, and you will begin to earn interest on your money.

As a lender will I have a stake in the company I'm giving money to?

No. Your loan earns you interest and capital repayments over a certain period, subject to the borrower meeting commitments to pay these amounts. You will not own shares in the company.

Is crowdfunding the same as the Enterprise Investment Scheme (EIS), or the Seed Enterprise Investment Scheme (SEIS)?

No. Companies seeking to sell stakes in themselves may do so under the terms of the Enterprise investment Scheme, or the Seed Enterprise Investment Scheme. These are tax-incentive schemes designed to persuade investors to become part-owners of businesses seeking funds. Money&Co. offers funding via loans. You will not own a stake in these businesses, and you will not qualify for EIS nor SEIS tax breaks. However, you will shortly be able to put your Money&Co. loans in an ISA or NISA (new ISA) following the announcement in the 2014 Budget.

What kinds of loans are on offer?

Simple, fixed-rate loans: you bid to provide funds at a certain rate for the duration of the loan term. If your bid is accepted into the final loan sum, that's what you get.

Can I be a lender if I don't live in the UK?

Sorry, but no. There are all sorts of complicated reasons for this. The simplest and most basic one is that money-laundering regulations make it hard for lenders outside the UK to lend via Money&Co.

How do I choose a company?

When companies (borrowers) are seeking a loan, they are required to explain what their business does and to give a considerable amount of information, which you can then see. Money&Co.'s credit analysts give each company a credit rating, which will help you to determine how creditworthy the company is and what rate of interest you should ask for. You have two choices; you can read the postings for each company and then select your own loans or you can use auto-lend (NB: auto-lend is not currently available, but will be shortly). Auto-lend allows you to tell us how many loans you wish to spread your money across, and at what interest rates, what risk rating, and term. This means you will not need to spend time selecting individual companies.

This is – and has to be - your decision. Our credit-assessment team will have vetted the businesses asking for funds on Money&Co. and assigned a credit rating. The credit rating is Money&Co.'s take on the inherent riskiness of the business. Our team will have carried out due diligence to make sure that the representations made by the businesses are honest and true – but we cannot and do not warrant that those statements are true. Beyond that, we cannot and do not endorse or recommend the merits of any of the loan requests on the site. Before making any decision to lend you should consider that each and every loan carries the risk of loss of some or all of your money.

What is auto-lending? [Auto-lending is not currently available, but will be soon]

Auto-lend allows you to tell us how many loans you want to spread your money across, at what interest rates, risk levels, and for how long. If you use auto re-lend, you do not need to select individual companies.

How do I set up auto-lending?

Go into the auto-lend screen and tell us how much money you would like to lend and across how many loans. You must also tell us how you want to spread your money across loans with different interest rates, terms, and risk levels. It is very important to have several loans, if possible, in order to mitigate risk.

What is auto re-lending?

Auto re-lending is the automatic re-lending of available monies from redeemed loans, interest, and monies transferred into your account. You can choose how much interest and/or capital to be automatically re-lent, and select the general type of new loan, according to length, amount, interest rate and risk level.

Is auto-lending or auto re-lending riskier than lending via an auction?

The risk levels are the same. All methods of lending carry risk – all lending carries the risk of the loss of some or all of your money. All businesses will have been subject to exactly the same process of risk assessment carried out by the Money&Co. team. The only difference is that the auction process requires your positive decision to make a loan, whereas auto-lending or auto re-lending will automatically commit monies to the type of business loan pre-selected by you. The only difference is that if you use the auction process, you will select the companies yourself.

What does the "loan market" mean?

The loan market is the place where you can sell some or part of a loan that you already own. We charge 0.25% commission on all sales. There is no guarantee that you will be able to sell your loan, but as the loan book on the site builds, we do expect the loan market to become very active.

Can I sell my live loans at any time?

Yes, if you can find a buyer in the loan market and the loans have a perfect repayment history. If your loans have had one or more repayments missed, you will not be able to sell them.

What does selling at a premium or discount mean?

Selling at a premium means you're getting more money back on the amount of the loan left to be repaid, than you would if you did not sell the right to be repaid to a new lender. Premium sales will typically occur if interest rates go down, and credit becomes cheap. Selling at a discount is the other side of that coin. You sell the right to receive income from a business to a new lender, and you receive less money than the amount left to be repaid on the loan.

What does Money&Co.'s credit rating mean?

When a company comes onto the site and applies for a loan, our credit analysts attribute a credit rating. The credit scale is alphabetical: A+ is the highest, with C+ the lowest. Thus a company with a rating of A+ will, in our risk-assessment team's judgment, be less risky than a borrowing company with a rating of A or B+. We are taking a conservative approach and will only approve loans to companies that are reasonably strong financially. Within this group of companies, however, some will be stronger than others and the credit rating will provide guidance to lenders in terms of what rate they should ask for on their money and how likely or not it is that a company might default on loan repayments. Companies that are weaker financially will be expected to pay a higher rate of interest. This may sound counterintuitive, but that is how credit markets work. It is very important that you spread the money that you are lending across as many companies as possible in order to minimise any losses that might occur as a result of bad debts.

How do I track the progress of my loan?

When you become a lender on the Money&Co. site, you will have your own account. When you access your account page, you will be able to see all the loans that you have made and the status of each one.

Once I've made a loan, I get paid monthly - what do those monthly payments consist of?

Your monthly payment consists of capital and interest on that capital. Interest is calculated daily on a reducing capital balance. The borrower makes a fixed repayment each month and, rather like a repayment mortgage, this means that proportionately more of the payment in the early months of the loan will be interest. When you see your interest income from a borrower come in over successive months you should expect this amount to reduce slightly on each occasion. At the same time, you will see slightly more repaid against the outstanding loan value each month.

Please note that you will also see the Money&Co.'s 1% fee reduce successively because it is calculated on the same basis, gradually being paid to us as each part of the principal is repaid. We do not take our 1% fee from you up front so we bear the risk of loan default as you do.

Can I use my loan repayments to pay another party, e.g. a charity or family member?

Loan and interest payments stay in your Money&Co. account until you decide to pay them out to your normal bank account. Once you have paid them into your normal bank account, then you can arrange to make a payment to a charity or family member.

When do I get my capital back?

When money is lent to a company and the rate of interest has been struck as a result of the auction process, a monthly payment is then made by the company, which will be the same every month for the term of the loan. This payment will include interest and capital. Thus, if a company borrows money for 3 years at 7%, a calculation will be made and the company will be told what the monthly payment will be and it will then be obliged to make the same payment every month for 36 months.

Can I ask questions of the management of the company I've loaned money to?

Yes, there is a message board where you can ask questions whilst the auction is live. Once the auction has closed, you will not be able to ask questions any more.

What happens if the company I want to lend to doesn't raise all the money it wants?

If the company doesn't raise all the money, then nothing will be lent. The company will have the option to come back onto the site and ask for a smaller amount.

What are the costs of lending through Money&Co.?

We will charge you 1% per annum on all the amounts that you lend. This will be deducted from the interest and capital repayments that you will receive monthly. Thus, the amounts that you will receive will be net of our fees.

How does the loan auction work?

When a company has been approved and a credit rating attributed, then the auction will go live. You will be able to read about the company on the site and decide whether you like the look of the loan. The credit rating will provide guidance to you in terms of what rate of interest you should ask for. You will then have to decide how much you would like to lend to the company and at what rate of interest. When the company has all the money that it has asked for, it will look at all the amounts that have been offered and at what rates. It will be able to close the loan immediately if it is happy with the overall rate of interest. However, if it believes that some of the offers are high and it might be able to reduce the overall rate of interest by leaving the auction open, it will be able to do this for up to two weeks from the auction start date.

It is only when the auction has closed that you will know whether your bid has been successful or not. Whilst your bid is still live, you will not be able to use that amount of money to bid in another auction. If your bid is successful, you will start receiving payments at the rate of interest that you bid once the loan has been made. If your bid is not successful, that will almost certainly be because another lender has offered to lend at a cheaper rate (the borrowing company naturally wants monies at the best rate it can obtain, and more expensive offers of credit will be squeezed out of popular borrowing propositions). In that case, your money will be released in your Money&Co. account and you will be able to commit to another auction.

How can I reduce my lending risk?

It is vital that you spread the money that you would like to lend across as many companies as possible and companies with different credit ratings. This is called "diversification" and a well-diversified portfolio will provide greater protection against bad debts.

What if the auction I bid on ends, and the average rate of interest is less than I wanted or hoped for?

The average rate of interest is irrelevant. If you are included in the loan, you will get the rate of interest that you asked for, whether this is the original amount you bid, or the "minimum rate" that you bid.

What due diligence does Money&Co. undertake on borrowers?

Money&Co. undertakes credit analysis on borrowers. Borrowers must have at least three years of filed accounts before Money&Co. will even consider approving them. Companies that have seen a sharp decline in profits or which are loss-making will not be approved. Profitability must be steady or rising in order to gain credit approval.

What happens if I fail your credit checks?

We do not perform credit checks on lenders. We are, however, obliged to perform checks to ensure that criminals do not use the site in order to commit fraud or launder money. If you do not pass this check, it is likely that this will be because you are not on the electoral register or you have recently moved your bank account. If you do fail the check, you will receive a message with a telephone number. Please call the number and we will help you through the approval process. We will also waive our fee on the first £1,000 you lend to compensate you for the extra time that it will have taken for you to sign up.

How is the Money&Co. credit rating calculated?

Money&Co. has a sophisticated risk-rating process, which is difficult to describe in a few words. However, the key element is that the companies must have three years' of filed accounts and must be profitable in the last financial year. We are looking for companies that have stable or growing profitability.

Are loans guaranteed or secured?

Loans are not guaranteed to be repaid by Money&Co., and so lenders must understand that their capital is potentially at risk. Loans will often be secured on the assets of the company or may carry a personal guarantee from the owner of the business. This will provide some protection if the company defaults on loan repayments.

What are the income tax implications of lending through Money&Co.?

The interest you receive is income, and income tax is payable on that interest. The back-room team at Money&Co. will provide you with an annual statement of income earned and tax paid to the UK tax authorities. The capital you advance will simply be returned to you during the life of the loan, as long as the borrower makes all repayments owed to you. This will not be a capital gain, and will not be subject to Capital Gains Tax. However, you will soon be able to put your Money&Co. loans in an ISA, which will protect you from income tax.

What happens if a business I lend to misses a repayment?

You will receive an email alert. The Money&Co. credit-control team will chase payment for you in this (we very much expect) unlikely event. There is no need for you to contact directly the business you have loaned money to.

Does Money&Co, report any defaults on loans to credit reference agencies?

Yes, we share information on defaulting businesses with recognized credit agencies. But this has no effect on the credit rating of you, the lender.

Can a business repay a loan early?

Yes, and you as a lender will not receive any further interest once the loan has been repaid.

What is the Watchlist – and how does it work?

The Watchlist is designed to help you choose businesses to lend to. Once you've logged in as a lender, your page will show you 'Auto-Lend', 'Loan Market', 'Business Profiles' and 'Watchlist' at the top of the page. If you like the look of a business after examining 'Business Profiles' but aren't sure whether you want to lend, you can tag the company and it will automatically be added to your Watchlist – you'll then be able to see how the business loan is progressing – the percentage funded and the numbers of bids, plus the time left until the auction expires.

How do I decide what rate of interest to ask for?

All that really matters in concluding a loan is that you make a bid that the borrowing business accepts. You will be able to judge what sort of bid you should make by looking at the risk rating and the rates other prospective lenders are bidding.

Will I receive regular updates from Money&Co. on my existing loans and/or live bids?

You will not receive updates on how the company you have lent money to is doing. One of the advantages for businesses borrowing in this way is that they do not have to report on their performance: they just have to make repayments of capital and interest. We will provide you with up-to-date information about what you have lent through Money&Co. Simply log in to your Money&Co. account, and a timely summary, consisting of each and every loan you've made, will be readily available.

Can I lend to my own business?

There is no reason why individuals cannot make a loan application on behalf of their business and also be lenders, including lending to their own business.

Borrowing

Can I be a borrower?

Yes. Here's the practical process: You can apply for loans through us. We will check your company's finances and if we think it is creditworthy, we will give it a risk rating. Our experienced team of credit analysts assesses businesses, backed by a powerful system to help us do it quickly and fairly.

Can I be a lender AND a borrower at the same time?

Yes - providing you meet the requirements of the lending and the borrowing process.

Is Money&Co. a member of the UK Crowd Funding Association (UKCFA)?

Yes. We have signed up to the UKCFA's code of conduct, as evidenced by the black UKCFA icon on our website. We are audited by the UKCFA annually to ensure that we adhere to best practices of fairness and transparency in the industry.

Why does membership of the UKCFA make a difference?

It shows that, along with the highest levels of legal and regulatory obligation as required by the Financial Conduct Authority, we have voluntarily adopted the best practices in the industry.

What does Money&Co.'s credit rating mean?

When a company comes onto the site and applies for a loan, our credit analysts attribute a credit rating. The credit scale is alphabetical: A+ is the highest, with C+ the lowest. Thus a company with a rating of A+ will, in our credit-assessment team's judgment, be less risky than a borrowing company with a rating of A or B+. We are taking a conservative approach and will only approve loans to companies that are reasonably strong financially. Within this group of companies, however, some will be stronger than others and the credit rating will provide guidance to lenders in terms of what rate they should ask for on their money and how likely or not it is that a company might default on its loan payments. Companies that are weaker financially will be expected to pay a higher rate of interest, which may seem counterintuitive, but that is how credit markets work. It is very important that you spread the money that you are lending across as many companies as possible in order to minimise any losses that might occur as a result of bad debts.

What due diligence does Money&Co. undertake on borrowers?

Money&Co. undertakes credit analysis on borrowers. Borrowers must have at least three years of filed accounts before Money&Co. will even consider approving them. Companies that have seen a sharp decline in profits or which are loss-making will not be approved. Profitability must be steady or rising in order to gain credit approval.

How is the Money&Co. credit rating calculated?

Money&Co. has a sophisticated, bespoke credit assessment process that analyses both filed accounts and management information, along with other qualitative data (such as Industry information) to derive a credit rating. This process focuses a number of key metrics including Cash Flow generation, the ability to repay debt, liquidity and earnings stability. Money&Co. always insists on a debenture over the company, to ensure any losses are minimised. This focus on quality means that whilst our gross indicative interest rates by credit rating may be somewhat lower than other crowdfunders, our net return (after losses) should be lower.

What are the risks of being a borrower?

When you borrow money you're staking your reputation, the goodwill of your business, and its main assets. Loans from Money&Co. lenders will always be secured by a debenture over the assets of the business. In some cases, borrowers may also be asked to give personal guarantees for loans. You may also want to offer security, if it is available, over land and buildings. This may improve your risk rating, make lenders more comfortable lending to you, and lower your overall interest rate.

As a borrower, what will raising money cost?

There are two parts to the cost of borrowing – the transaction cost, which is fixed, and the cost of the loan, which isn't. The transaction cost is composed of a £50 application fee, and a £100 listing fee (both excluding VAT), once all the details of the application have been processed. The listing means that your business's details will go into an auction, and Money&Co. lenders will offer money at the interest rates they decide on. We will publish a range of interest rates to represent what we expect each risk level to be priced at, but lenders are free to make offers to lend at any rate they wish. As a borrower, you are not obliged to accept any offers. As the closing point of the auction nears, bids for attractive business propositions will typically decrease, and the most expensive bids will be frozen out of the auction. If your loan completes successfully, there may be the cost of getting a valuation over any land and buildings if you have offered these as security. There will be an arrangement fee, which is a percentage of the loan raised (ranging from 1.5% - 5% depending on the size and length of the loan), and you may also have to pay legal costs related to completing the loan documentation, depending on the size of the loan.

Does my company need to be in the UK or UK based to be a borrower?

Fraud and money-laundering prevention regulations mean that we restrict our offering to UK businesses.

How do I, as a borrower, make a pitch?

You have the opportunity to set out the attractions of your business proposition in writing and – if you apply for a more expensive Premium Listing - on video. Once you've been through the process of stating how much you want, how you plan to apply the money to the business, etc, you will have the opportunity to write a business profile, and to make a video, which we'll host on the Money&Co. website. The video pitch can be an especially effective tool - an opportunity for potential lenders to see who you are, and for you to talk about your business, and explain what will happen to the monies from the loan.

Is there a prescribed format for the business information I have to supply?

There are certain things you need to explain, so as to engage with and capture the interest of potential lenders. You will need to explain – vividly, but briefly – what your business is all about (Micro-brewery? Plumber? IT consulting?), who your customers are, who your suppliers are, the history of your business, who your main competitors are, and how your business has performed financially over the past few years.

How precise, as a borrower, do I have to be about my company's prospects for growth?

You must be absolutely truthful – and extremely careful not to treat future prospects of contracts and growth as present fact. It is unhelpful and potentially misleading to make general, qualitative statements about your business's competence and standing in a certain area. Your company may be the "best" wicker-basket manufacturers in Berkshire, but it would be potentially misleading to make such a statement (even though this would be difficult to prove). If a lender were to loan money in reliance on such a statement, you might find yourself liable to a civil action if your business were to run into difficulties and you were to default on payments. Even something more easily proved – eg, your business is the "biggest" or "fastest-growing" in its sector – needs to be stated in qualified terms. If you have a strong growth record, state it. If you believe you are one of the leaders in your field, state that – but do point out that this is your reasonable belief, based on facts such as published accounts, testimonials, client base, etc.

When Money&Co. makes enquiries of due diligence to ensure the soundness of my company, what are my obligations?

Again, you must be absolutely truthful, and disclose all relevant facts pertaining to the questions asked by Money&Co.'s credit-analysis team.

What are the most commonly used ways of promoting my loan offer?

The Money&Co. website is central to promoting your loan offer. You might do well to set up a suite of online media channels – Twitter, Facebook, LinkedIn, Pinterest, Google+, FourSquare, etc, to cross-promote your business.

How long will it take to raise a loan through Money&Co.?

Once you've been through the application process, and set up a business profile, complete with video (if you go for the Premium Listing option), your offer will be listed in the auction. The application and listing process should take no more than three working days. Auction periods typically last for up to 14 days, unless you decide to complete it early in the event that the total amount of the loan has been raised and you are happy with the average rate of interest your business will need to pay. After the auction period is over, there is a four-week period during which loan documentation needs to be completed. There may also be a requirement to have a valuation done over any land and buildings, if offered as security. The time taken will therefore be a little longer if your loan requires security (in most cases, 'security' means a mortgage on a piece of real estate).

What is a Premium Listing - and how does it work?

Premium Listings offer more exposure on the Money&Co. website – the powerful tool of a short video showcasing you and your business. Premium Listings cost £750 (plus VAT) - an extra £750 on top of the standard £100 listing cost. This is to cover the cost of having the video made. However, only a limited amount of information about your loan application, excluding your company name, will be publicly available. That way new lenders may be attracted to your loans but your customers, staff, suppliers and your bank need not be aware you are looking to raise loan capital.

Can my company be anonymous when borrowing?

No. Fraud and money-laundering regulations require transparency and clarity in all dealings. Nevertheless, only a limited amount of information about your loan application, excluding your company name, will be publicly available. That way new lenders may be attracted to your loans but your customers, staff, suppliers and your bank need not be aware you are looking to raise loan capital.

For what purposes can I borrow money through Money&Co?

You need to demonstrate to Money&Co. and its team of credit analysts and senior executives that the money you're seeking to raise will be used to promote and strengthen your business, to help it grow, or to refinance existing debt. Money cannot be raised to pay shareholders or directors.

What happens if my loan is not completely filled – i.e., the lenders don't come up with all the funds I am seeking?

You will only receive funds from Money&Co. if your loan is fully funded. If it is only partially funded, you can resubmit your application for a lower amount. Please note that this will incur a new application and listing fee.

How much can I borrow through Money&Co.?

The maximum is £3 million. In this case, Money&Co. will require you to grant a mortgage secured on a piece of real estate as security. For loans not secured on a property the maximum is £2 million. The minimum amount that can be borrowed is £50,000.

Can I borrow more than once through Money&Co.?

Yes, you can borrow more than once through Money&Co., but it is not necessarily the case that a second loan will be approved. Our credit analysts will look at the position at the time of the application and make a decision based on all the information available to them at that time.

Can my company have more than one auction at a time?

No. Each company can only have one auction at any one time.

Can my application form be amended once an auction is live?

It is not our intention to amend the information provided during a live auction. However, if there is something that has dramatically changed the circumstances of the company whilst the auction is ongoing, you must inform us immediately. For example, if you are a manufacturing business and a fire has destroyed your premises, we need to know.

Can I lend to my own business?

There is no reason why individuals cannot make a loan application on behalf of their business and also be lenders, including lending to their own business.

Can I repay my loan early?

If the company no longer needs the loan and you are able to repay all that is outstanding, then you can do so without any penalty. You cannot, however, only repay part of all that is outstanding, inlcuding any interest accruing to the repayment date.

Can I track the progress of my loan auction?

You can look at the auction page for your company and see how the auction is progressing at any time.

If my loan auction is successful am I obliged to accept the monies?

No. If the rate of interest set by the borrowers is much higher than you were expecting or you decide you no longer require the loan for any other reason, then you have the right to withdraw.

What is the loan documentation/completion process once the auction is successful?

Once the auction process is complete, we will send you our standard documentation. You will then be required to sign this and return it to Money&Co.

Is there a timeframe in which I have to complete a loan after a successful auction?

When the auction is closed, we will send you our standard documentation for signature. If we are securing the loan against an asset that needs to be valued, then we will arrange for a valuation. As long as this is satisfactory and the asset has a value close to the initial estimate, the loan monies will be released. In general, we would expect the loan monies to be released within two weeks of the auction closing. For secured loans the process may take a little longer, as the mortgage procedure dictates. We have set a maximum period of six weeks from the start of the auction. This is to protect lenders who will not have had access to their money during this time.

What are my obligations to the lenders once I have borrowed the monies?

Your obligation is to make the monthly repayments on time. This is paramount. We may also have other conditions, e.g. not paying more than 75% of net profit as dividends. We will advise you if this is the case during the application process.

How do I reset my password / log in?

If you try to log in and you have forgotten your username or password, you will have the option of resetting. Just follow the instructions on the page.

What happens if I can't make the site work?

We hope there'll be no glitches at our end. One small problem is that the borrower registration part of the site doesn't support some versions of the Firefox browser. We're working on this now. In the interim, please use another browser - and the problem should go away.

How can I contact you?

You can contact us via the site. Go to 'Contact Us' and follow the instructions.

How do I transfer money to repay the lender?

You will be required to set up a standing order from your bank account to make monthly payments. These payments will be the same amount every month for the term of the loan and include a capital payment and an interest payment combined.

How do I respond to any questions potential lenders are asking?

You will be able to see the questions coming through from potential lenders on your business's profile page. Please answer these as promptly as possible.

Risk

What are the risks of being a lender?

When you lend to a small or medium-sized business, you inevitably take on risk. While we make diligent enquiries of the businesses seeking funds, it is possible that a business may fail. In that case you may lose all or part of the money you have loaned to the business. You should invest only money that you are prepared to lose -and of the money you invest in small-to-medium-sized businesses, you should spread your risk by investing across a range of companies operating in different commercial sectors. This is called building a diversified portfolio.

What are the risks of being a borrower?

When you borrow money you're staking your reputation, the goodwill of your business, and its main assets. Loans from Money&Co. lenders will always be secured by a debenture over the assets of the business. In some cases, borrowers may also be asked to give personal guarantees for loans. You may also want to offer security, if it is available, over land and buildings. This may improve your credit rating and make lenders more comfortable lending to you.

What is the estimated default rate for borrowing companies?

Borrowing companies that pass the Money&Co. credit-rating test are given one of five credit ratings (A+, A, B+, B, C+). A+ is the "best" rating, for companies deemed the most credit-worthy. Below we set out the estimated rate of default, according to credit rating. The riskiest category projects capital losses equivalent to the failure of three companies in 200, and the A+ category projects the equivalent of the failure of just one company in 200.

You should be aware that if a company fails your capital is at risk.

Credit Rating

Estimated Bad-Debt Rate

A+

0.5%

A

0.75%

B+

1.0%

B

1.25%

C+

1.5%

What legal rights and protections do I have as a lender?

There are no special protections for lenders. Lending to businesses does not necessarily have the rights, privileges and protections that apply to consumer-finance transactions. Although currently all of the loans offered by Money&Co. will fall outside the protection of the Financial Conduct Authority (FCA)'s Financial Services Compensation Scheme, we are regulated by the FCA, and treat lenders and borrowers according to the highest standards.

Why do I need to read the Lender Terms?

You should read the Lender Terms because they set out the risks inherent in making a loan to a Money&Co. borrower. You need to be fully appraised and aware of these risks before lending.

How is Money&Co. regulated?

We are a crowdfunding/lending platform and are regulated and licensed by the UK's leading regulatory body, the Financial Conduct Authority, as a financial adviser.

Is Money&Co. a member of the UK Crowd Funding Association (UKCFA)?

Yes. We have signed up to the UKCFA's code of conduct, as evidenced by the black UKCFA icon on our website. We are audited by the UKCFA annually to ensure that we adhere to best practices of fairness and transparency in the industry.

Why does membership of the UKCFA make a difference?

It shows that, along with the highest levels of legal and regulatory obligation as required by the FCA, we have voluntarily adopted the best practices in the industry.

Am I protected if Money&Co. goes bust?

Our regulatory and legal obligations, as required by the FCA, and the UKFCA code of practice, all require Money&Co. to keep lenders' money separate from the company's money. A similar rule applies to the funds held by investee companies. If Money&Co. goes bust you will be able to claim these separately held monies.

Am I protected if the company I invest in goes bust?

As a lender, your money is always at risk. If the business you invested in goes bust you may lose some or all of your investment as the liquidators of the company sell its assets and distribute the cash to you and other creditors of the business. You are a secured creditor because we always take a debenture charge over the borrowing company's assets. A debenture is a way of asserting a claim over assets if things go wrong.

It is likely that there may be other secured creditors who get paid before you, but you are likely to recover more of your capital than general, unsecured creditors. This is why a loan secured by a debenture offers better security than a loan secured on a director's personal guarantee. Holders of such loans rank as unsecured general creditors in the event of the borrower's going into liquidation.

What does Money&Co.'s credit rating mean?

When a company comes onto the site and applies for a loan, our credit analysts attribute a credit rating. The credit scale is alphabetical: A+ is the highest, with C+ the lowest. Thus a company with a rating of A+ will, in our credit-assessment team's judgment, be less risky than a borrowing company with a rating of B+. We are taking a conservative approach and will only approve loans to companies that are reasonably strong financially. Within this group of companies, however, some will be stronger than others and the credit rating will provide guidance to lenders in terms of what rate they should ask for on their money and how likely or not it is that a company might default on loan repayments. Companies that are weaker financially will be expected to pay a higher rate of interest. This may sound counter-intuitive, but that is how credit markets work. It is very important that you spread the money that you are lending across as many companies as possible in order to minimise any losses that might occur as a result of bad debts.

How is the Money&Co. credit rating calculated?

Money&Co. has a sophisticated credit-rating process, which is difficult to describe in a few words. However, the key element is that the companies must have three years of filed accounts and must be profitable in the last financial year. We are looking for companies that have stable or growing profitability.

How can I reduce my lending risk?

It is vital that you spread the money that you would like to lend across as many companies as possible and companies with a range of different credit ratings. This is called "diversification" and a well-diversified portfolio will provide greater protection against bad debts.

What happens if a business I lend to misses a repayment?

You will receive an email alert. The Money&Co. credit-control team will chase payment for you in this (we very much expect) unlikely event. There is no need for you to contact directly the business you've loaned money to.

Does Money&Co, report any defaults on loans to credit reference agencies?

Yes, we share information on defaulting businesses with recognised credit agencies. But this has no effect on the credit rating of you, the lender.

How secure is the Money&Co. website?

Our IT infrastructure is hosted by a leading global IT hosting company that ensures physical and operational security of our systems and data, and has been certified as ISO 27001/2 compliant annually since 2009. We also ensure all website traffic is secured by 2048-bit encryption. Our Barclays and Barclaycard banking and payment platforms conform to similarly high standards of security protocol. Please remember that the money in your account is held in the same way that a bank would hold money on your behalf and so it is essential that you do not give your username or password to anyone else.

How safe is my personal information?

Your personal information is very safe, but please ensure that you do not give your username or password to anyone else.

Who actually stores my information?

The information that you have given us is held on Money&Co. and is not available to anyone else as you are protected by the Data Protection legislation.