CCR2 Compliance


Taking a broader view


Peer-to-business lending achieves most when there is cooperation between applicants and lenders


Philip Pawson Underwriter and forensic accountant, Rebuildingsociety.com


Peer-to-business lending poses its own problems for the arranging platform when it attempts to satisfy the lenders’ desire for information on which they can base their lending decisions, while, at the same time, recognising the applicant’s desire for a swift and efficient process that leads to a successful outcome. Information disclosed on a platform will be both subjective and objective in nature. Lenders probably achieve the best outcome


when coming to a decision about whether to lend or not and, if so, at what rate of interest, when they are able to take all of the available information and appraise it.


Financial statements Clearly, one of the principal ways in which a company represents itself is through its financial statements. On our own platform, lenders are always able to see two sets of historical financial statements from the two most recent completed accounting periods and more up-to-date information from a recent set of management accounts. It is well-known that the law requires


that annual financial statements be true and fair, however, it is fairly common for intermediate brokers and applicants themselves to take the view that this legal requirement applies only to the annual financial statements that have been filed at Companies House. This is not our view; we take the opinion


that all financial statements, which are put into a public forum, should be true and fair, and, in pursuance of this objective, we work with the applicant directors to ensure that we get as close to the statutory standard as possible in respect of the management accounts, that there are no obvious errors or omissions, and that all important disclosures are made.


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Information disclosed on a platform will be both subjective and objective in nature


Going live Of course, a platform like our own can only do so much prior to the listing of the application. When an application goes live, it is up to those lenders, which are interested in making a loan, to appraise the information that they have, which will be the accounts and the directors’ representations of the


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business, its achievements and its hopes and prospects for the future. The lenders then have the opportunity to


ask their own questions, probing any aspect of their choice. In our experience, some lenders can ask


very probing questions that the directors sometimes regard as either irrelevant or intrusive. We never limit the nature or scope of the questions that the lenders are entitled to ask and we will always encourage the directors to answer all questions promptly, succinctly and honestly. If they are delinquent in this, it will be


clear to all lenders and they are entitled to draw whatever conclusions they choose from that fact and make their lending decisions accordingly. CCR2


June 2017


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