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Running a crowdfunding or P2P lending platform
How to get FCA authorisation to operate a loan-based (P2P) or investment-based crowdfunding platform. Covers capital requirements, investor restrictions, client money rules, and wind-down arrangements.
UK-wide
Guide summary
You must get FCA authorisation before running a loan-based (P2P) or investment-based crowdfunding platform. P2P platforms must have enough money to protect investors, follow marketing rules, and have a plan if they close down. Check investor types and keep client money separate.
- Get FCA authorisation before operating
- Maintain minimum capital of £50,000 or percentage of loans (whichever higher)
- Recalculate capital if loaned funds increase by more than 25%
- Only market to sophisticated, high net worth, or restricted investors
- Restricted investors can invest up to 10% of net assets in 12 months
- Assess if P2P lending is suitable for each investor
- Keep client money separate from your own funds
- Have a wind-down plan to protect investors if you close
- Update resolution manual and keep it current
- Tell investors about wind-down plans before they invest
On this page
UK-wide
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Operating an electronic system for loan-based crowdfunding (peer-to-peer lending) or investment-based crowdfunding is a regulated activity. You must obtain FCA authorisation before operating.
Operating without FCA authorisation is a criminal offence. This guide covers the requirements for loan-based (P2P) platforms - investment-based crowdfunding has additional MiFID requirements.
Understanding FCA crowdfunding regulation
Which type of crowdfunding?
| Type | FCA Regulated? | What it involves |
|---|---|---|
| Loan-based (P2P) | Yes | Consumers lend money for interest and capital repayment |
| Investment-based | Yes | Consumers buy shares or debentures in businesses |
| Donation-based | No | Contributors receive nothing in return |
| Rewards-based | No | Contributors receive non-financial rewards |
Capital and financial resource requirements
P2P platforms must maintain adequate financial resources to protect investors.
Calculating your capital requirement
The requirement scales with loaned funds under management. You must recalculate whenever loaned funds increase by more than 25%.
Example: A platform with £10 million loaned funds would need capital significantly above the £50,000 minimum. Review IPRU-INV 12 for the specific calculation formula.
Investor restrictions and marketing
You cannot market P2P investments to all investors - restrictions apply.
Investor classification process
- Determine investor category at onboarding
- For restricted investors, calculate 10% of net investible assets
- Monitor investment levels against limits
- Allow reclassification when investors meet criteria (2+ P2P investments in 2 years)
Appropriateness assessment
Before accepting investments, you must assess whether P2P is appropriate for the investor.
Client money rules
If you hold client money, CASS 7 rules apply.
Avoiding client money
Some platforms structure operations to avoid holding client money - for example, by having lenders pay directly to borrowers' accounts. This removes CASS requirements but may not suit all business models.
Wind-down arrangements
You must have arrangements to protect investors if your platform fails.
Key wind-down documents
- Resolution manual: Details of critical staff, IT systems, outsourcing, bank accounts, loan data
- Standby servicer agreement: Contract with third party to take over loan administration
- Investor disclosure: Clear explanation of arrangements before first investment
Disclosure and reporting
Annual outcomes statements and regular reporting are required.
Applying for authorisation
Preparing your application
- Business plan: Detailed description of platform operations
- Governance: Senior Managers and Certification Regime documentation
- Policies: Investor restrictions, appropriateness, client money (if applicable)
- Wind-down plan: Resolution manual and standby servicer arrangements
- Financial projections: Capital adequacy and ongoing viability
Tip: Use FCA's Pre-Application Support Service (PASS) for complex platform structures.