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Frequently Asked Questions

General Questions

About Folk2Folk

What is Folk2Folk?

FOLK2FOLK is a financial technology (FinTech) platform that offers simple, straightforward, local lending and borrowing nationally.  We match investors with local businesses seeking finance through our award-winning Peer-2-Peer platform.  Our Local Lending Movement enables people to invest their money locally promoting business growth and diversification, creating job opportunities and driving positive social outcomes - all essential to the benefit of the wider UK economy.

Is Folk2Folk a Lender?

No. FOLK2FOLK does not lend its own money but introduces people with funds to those who need them.

Is Folk2Folk a bank?

No. FOLK2FOLK is not a bank and does not hold a banking licence.

When did Folk2Folk begin?

Folk2Folk can trace its origins back over 100 years when private mortgages were being arranged by Parnalls Solicitors. The owners of Parnalls founded Folk2Folk in early 2013. Read more about our history.

Who started Folk2Folk?

The founders are Mark Parnall and Louis Mathers, who set up Folk2Folk in February 2013 with the help of the staff who previously ran the Santander Agency.

What is the philosophy behind Folk2Folk?

Our guiding principles are summarised as:

  • Fairness for all
  • Personal, face to face contact
  • Supporting local areas and businesses
  • Honesty
  • Loyalty

Read more about our values and ethos.

Who owns Folk2Folk?

FOLK2FOLK is owned by its original Founders, some of its leadership team and private shareholders some of whom have supported FOLK2FOLK from its inception. 

Who comprises the Folk2Folk leadership team?

Information about the FOLK2FOLK board can be found here.

How can I contact Folk2Folk?

Folk2Folk is a people-facing organisation and we are happy to be contacted by phone or email but equally our customers can come and meet us at one of our offices. Our contact details.

Where are Folk2Folk’s offices?

Folk2Folk has offices in market towns in England and is also represented further afield by a growing team of personnel. Folk2Folk has strong relationships with a number of law firms throughout the country that also help to reinforce our wider presence. Our office locations.

Regulation

Is Folk2Folk regulated?

Yes. FOLK2FOLK is authorised and regulated by the Financial Conduct Authority (FRN 720867). 

Folk2Folk Customers

What does Folk2Folk offer Borrowers?

We provide access to funds following a short application process.  We are approachable and hold all of our Borrowers in extremely high regard.  Borrowers get an excellent personal service throughout and we are finding that many Borrowers are coming back to us time and time again. Read more about what we offer Borrowers.

What does Folk2Folk offer Lenders?

Lenders get an attractive return on their investment as well as knowing that their money is being put to good use.  This is secured lending; the loan is secured by way of a legal charge on property and this charge is registered with the Land Registry on the Lender's behalf.

Read more about what we offer Lenders.

Borrower Questions

How it works

Who can apply for a loan?

Provided the loan is required for business purposes and security in the form of property or land is available then you can apply for a loan at FOLK2FOLK. 

How quickly can I get a loan?

We aim to complete a loan within seven to ten days from receiving an application (if you have all the relevant documents ready, and there are no unforeseen complications). To achieve this timescale, we need full cooperation from you in providing information and if you have your own solicitors to ensure that they are fully engaged to work with us to hit the target completion date.

What are the minimum and maximum loan amounts?

There is no maximum loan amount (as long as sufficient funds are available at that time) but minimum loan size is £50,000.

Can my business have more than one loan?

Yes. Provided there is enough security and the propositions otherwise satisfy our criteria.

What is the duration of Folk2Folk’s loans?

Loan duration ranges from 1 to 5 years for our Fixed loans and 6 months up to a maximum of 5 years for our Rolling loans

How quickly can a loan be arranged?

Provided we have all the information required and everything passes through our vetting process, we can have the loan agreed and money available to you within 7–10 days (If you have all the relevant documents ready, and there are no unforeseen complications).

Application

What do I do if I want to proceed?

Either complete an enquiry form online,  call us on 0330 053 5532 (calls charged at national standard rate), or drop in to one of our branches.

Can you give me an indication of whether an application will be successful?

Yes. We can often give an indication of whether or not a loan application is likely to be successful. 

What information do I have to provide to Folk2Folk?

We have designed an application process to set out what we need from you. However, we do not want to discourage borrowers from making an application should any of this information not be at hand and we would ask you to call us to chat through your circumstances. We will need a title number, plan or clear description of any property being put forward as security so we can start the various security checks needed at the outset of an application. 

Can I cancel my loan application?

Yes.  You may cancel a loan application but please note that we invest a significant amount of time to every loan application and we would therefore expect there to be good reasons for such cancellation.  Should an offer letter be signed by you and you later wish to cancel your application then a fee will be payable to cover our abortive costs.  

Will the Lenders know my name?

Yes. But only after you have signed the offer letter. If there is a Lender you would prefer not to be included in the loan then we will look to replace them, as long as we are notified in reasonable time prior to completion of the loan.

Fees and Interest Rate

What fees does Folk2Folk charge?

For a full breakdown of our fees please refer to our General Terms & Conditions.

What happens if I can’t pay one month?

Most importantly, you should let us know as soon as you think this may happen.

The Reduced Interest Rate will no longer be payable and you will instead be required to pay the Interest Rate in accordance with your Loan Terms & Conditions.  

We will contact you to try and make arrangements for you to pay your Lenders. If you are 3 working days late, then your account would be regarded as overdue and a £100 fee will be charged.  If the payment is 7 working days late, we will hand the matter to our Solicitors to seek recovery of the outstanding sums and their costs will be added to the loan.

About Your Lenders

What information is made available to Lenders?

Lenders are informed of the nature of the security, the purpose of the loan and the location.  Lenders are provided with a Loan Summary so  they understand the purpose of the loan and the security that stands behind it.

What if a Lender wants to pull out of my loan?

When Lenders invest in a FOLK2FOLK loan they do so on the understanding that their money is comitted to that loan until the Borrower chooses to repay.  However, if they wish to access their funds sooner then they may offer their investment in your loan for sale to other approved FOLK2FOLK Lenders via our secondary market, 'MarketPlace'.  

What happens in the event of a Lender's death?

In the event of a Lender's death, the benefit of the loan will fall into the Lender's estate and the executors can request Folk2Folk to put the loan in the name of the beneficiaries at a small cost.  Folk2Folk will be able to do this on the sight of the grant of probate.  The beneficiaries may decided in an Easy In/Easy Out loan to withdraw from the loan, in such circumstances we will endeavor to find a replacement Lender and the costs incurred will be borne by the Borrower. 

Security

What types of property does Folk2Folk accept as security?

We would accept most freehold property as security, provided that it is not the home of the Borrower. We only lend up to a a maximum of 60% of the forced sale value of the property.

By 'home' we mean a property, at least 40% of which is used, or is intended to be used, as or in connection with a dwelling, by the Borrower or related persons (the Borrower’s spouse or civil partner; a person (whether or not of the opposite sex) whose relationship with the Borrower has the characteristic of the relationship between husband and wife; or the Borrower’s parent, brother, sister, child, grandparent or grandchild). Dwelling includes second homes and vacant dwellings.

Your Account

How do I change my contact details?

Please contact us to advise us of the change by phone or email.  We may need verification.

I wish to make a complaint, what are the next steps?

We have a complaints policy which is located on our website and the first step is usually to contact our CEO. We are regulated by the Financial Conduct Authority (FRN 720867) and we have to adhere any requirements of the FCA concerning complaints from time to time.

Lender Questions

How it works

Where is my money held?

When you've expressed an interest in a loan and agreed to commit to it we don't ask you to transfer your money then and there (unless there is a short deadline for completion), but will give you an anticipated date for transfer of funds.  We will then contact you nearer the time to let you know when the money is required.  

Money is not sent to FOLK2FOLK Limited but to the solicitors who have been appointed by FOLK2FOLK to act on your behalf.  The solicitors are duty bound to hold your money in a client account and will only release the money to a Borrower upon completion of the loan and security documentation. 

A different process applies for IFISAs.

Can I invest in more than one loan?

Yes. We actively encourage Lenders to spread their investment out over several loans and there is usually no limit other than a minimum of £20,000 per loan.

What is the minimum and maximum amount I can lend?

The minimum is £20,000 but there is no maximum.

How do I get my money back?

Your capital investment will be returned to you once the loan reaches full term or when the Borrower chooses to redeem their loan. If you wish to exit the loan prior to this, you can offer all or part of it for sale to other FOLK2FOLK Lenders via our online secondary market ‘MarketPlace’.

Application

What do I do if I want to go ahead?

To register as a potential Lender, you can complete an online application form or visit any of our offices. You need to provide two documents to prove your identity. Once this is done, we send you a username and password for you to access the Lender section of our website which lists current loans available.

Fees and Interest Rate

What fees does Folk2Folk charge?

For a full breakdown of our fees please refer to our General Terms & Conditions.

Is tax payable on the interest?

Yes. Interest is paid to Lenders Gross ie without the deduction of income tax. All interest received will need to be declared to HMRC on the Lender’s annual (self-assessment) tax return.

FOLK2FOLK will send interest statements after the end of the financial year.

About Your Borrowers

Can I lend to more than one Borrower?

Yes. You can lend to numerous Borrowers, however the minimum amount you can lend to each loan is £20,000.

Will the Borrower know my name?

Yes. But only once you have decided to go ahead with a loan. The Borrower would know your name either when they receive an offer letter or when the Solicitors are instructed to undertake the due diligence on the security. 

What happens if a Borrower is late or stops paying, or goes bankrupt?

If an interest payment is not paid within 3 days of the due date FOLK2FOLK may charge the full Interest Rate as opposed to the Reduced Interest Rate until all outstanding interest is paid.

If the Borrower defaults or goes bankrupt, FOLK2FOLK will instruct one of its Panel of solicitors to take appropriate action. Ultimately, the security could be sold to repay Lenders.  Read more about defaults here.

Risk Regulation and Operations

Is my money safe? What’s the risk?

All lending and investments carry a degree of risk.  We mitigate risk to our Lenders by taking security against property, and by only lending up to 60% of the value of that property. We will only put forward and arrange loans which pass our checks.

What happens if Folk2Folk goes bankrupt?

FOLK2FOLK introduce the lending opportunities and manages the administration of the loan, it is not strictly a party to the transaction itself.  

A non-trading Trust company (Folk Nominee Ltd) holds the security on behalf of the Lenders. Such, should anything happen to FOLK2FOLK, this would not affect the loan, which otherwise remains in place.

FOLK2FOLK Limited is authorised and regulated by the Financial Conduct Authority (FCA) and as such we’re required to maintain a certain level of regulatory capital. This means that there should always be sufficient capital for an orderly wind-down of the company.

If FOLK2FOLK Limited were to stop operating, although there would be no new loans, the existing loans would be passed to a standby servicing company that would ensure that the administration of existing loans continued until maturity or until Borrowers repaid.

What happens in the event of a Borrower’s death?

The Borrower’s estate will need to service the loan or otherwise look to repay.  It may result in their being a delay on payments of interest and Lenders should be prepared for such delays.  The delays could be caused by the executors of the estate needing to obtain grant of probate before being able to operate the Borrower’s bank accounts.

What happens in the event of an Investor’s death?

The benefit of the loan will fall into the Lender’s estate and the executors can request Folk2Folk to put the loan in the name of the beneficiaries at a small cost.  Folk2Folk will be able to do this on the sight of the grant of probate.

Investing in P2P lending via other Investment products

Can I lend via a Self Invested Personal Pension (SIPP)?

Yes, if the administrators of your SIPP  approve this.  Not all P2P loans are eligible for a SIPP and therefore there may be a delay in finding eligible opportunities.

Customer Service

How do I change my contact details?

Please contact us to advise us of any change in your contact details by phone or email.  We may need verification.

What do I do if I’ve lost my Lender log in details?

Please let us know if you have lost your log in details and we will issue new details to you.

I wish to make a complaint, what are the next steps?

We have a complaints policy which is located on our website and the first step is usually to contact our CEO. We are regulated by the Financial Conduct Authority (FRN 720867) and we have to adhere any requirements of the FCA concerning complaints from time to time.

Latest News

Customer Stories

  • Richard's Story - Borrower

    "Sharp & Tappin is a precision engineering company and has been going for 11 years. The business has two parts: one is onboard cameras for ships and the other is composite blade saws...
  • Jim’s Story - Lender

    "I started my working life as a pilot in the Royal Air Force and after a 10 year commission I went to work in a building society which had a business arrangement with Parnalls solicitors who...
  • Pam's Story - Borrower

    "In 2009, I, together with my husband Robert and daughter Robyn, bought a pub which I had previously owned with my husband and sister in law and brother in law and sold in 2001. Since then it...
  • Nick's Story - Borrower

    Originally I was a farmer, but after Foot and Mouth affected us we had to diversify and Folk2Folk have enabled me to do this.  

    I have borrowed money through Folk2Folk since they began and...
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