Don’t invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1. You could lose the money you invest
- • Many peer-to-peer (P2P) loans are made to borrowers who can’t borrow money from traditional lenders such as banks. These borrowers have a higher risk of not paying you back.
- • Advertised rates of return aren’t guaranteed. If a borrower doesn’t pay you back as agreed, you could earn less money than expected. A higher advertised rate of return means a higher risk of losing your money.
- • These investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential gains from your investment will be tax free.
2. You are unlikely to get your money back quickly
- • Some P2P loans last for several years. You should be prepared to wait for your money to be returned even if the borrower repays on time.
- • Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’, but there is no guarantee you will be able to find someone willing to buy.
- • Even if your agreement is advertised as affording early access to your money, you will only get your money early if someone else wants to buy your loan(s). If no one wants to buy, it could take longer to get your money back.
3. Don’t put all your eggs in one basket
- • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- • A good rule of thumb is not to invest more than 10% of your money in high-risk investments. [https://www.fca.org.uk/investsmart/5-questions-ask-you-invest]
4. The P2P platform could fail
- • If the platform fails, it may be impossible for you to collect money on your loan. It could take years to get your money back, or you may not get it back at all. Even if the platform has plans in place to prevent this, they may not work in a disorderly failure.
5. You are unlikely to be protected if something goes wrong
- • The Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover investments in P2P loans. You may be able to claim if you received regulated advice to invest in P2P, and the adviser has since failed. Try the FSCS investment protection checker here.
- • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about peer-to-peer lending (loan-based crowdfunding), visit the FCA’s website here.

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Rainy Day

Rainy Day

When an unsecured borrower is late with a monthly payment, we may step in to make up a borrower's monthly interest payment to a lender.

The rainy day pot is topped up by JustUs using a risk-weighted portion of the JustUs platform fees paid by unsecured borrowers, and is maintained at a level sufficient to cover our expected rate of arrears on these borrowers.

The rainy day pot DOES NOT cover late property loan or guarantor loan interest repayments. It is not a guarantee and should not be treated as such by investors.

YOUR CAPITAL IS AT RISK WHEN LENDING MONEY ON THE JUSTUS PLATFORM

Our Rainy-Day Pot Policy is available for review here

The contingency fund we offer does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The fund has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the contingency fund when considering whether or how much to invest.

statistics

Figures last updated 22 October 2021

Total value of DISCRETIONARY Rainy Day Pot.	Balance of loans covered	Loan book arrears coverage	Forecast arrears %
£63,950.60	£298,887.28	21.40%	8.34%

The total value of the Rainy Day Pot comprises amounts held in cash of £20,000, contractual future contributions from live loans of £30,914.96 and £13,035.65, which represents a 50% recovery of payments already made to lenders out of the pot.

The figures above are based on the loan book as dated and will vary each month. New loans written may add to the pot and redeemed loans may reduce the pot.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED AGAINST IT. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU WILL REPAY.