Your 5 minutes with… the Insolvency Team

Following our first team interview where we spoke to Jenah and the rest of the Customer Relations team, we thought we’d spend 5 minutes with Andrew and Susie, who work on the insolvencies and recoveries of Funding Circle businesses.

aj and susie

A small proportion of businesses will be unable to maintain repayments on their loans and become insolvent so we thought it was important for you to meet some of the people who are dealing with these cases on your behalf.

Andrew is Head of Insolvency and Susie is our Insolvency Administrator. We are growing this team and expect a further two members to join them by the end of the year. Andrew started in the summer and Susie has been with us since November last year.

Day to day activities include:

Checking in on businesses that have fallen behind with repayments, working with borrowers and guarantors to establish a fair payment plan (if required) that protects the interests of investors, notifying investors of the status of late payments, ensuring that agreements with borrowers are in line with our internal policies (which may change from time to time), developing policies and using technology to optimise our activities.

What is your background?

Andrew: I’ve been a qualified solicitor for 9 years now. Initially I studied biology at Oxford, and then took conversion exams to become a solicitor. In my early legal career I worked for a charity, the Government, and the NHS and then in corporate restructuring. As the recession hit, I moved from solvent reorganisations to insolvent reorganisations, Blockbusters and Halliwells to name two.

Susie: I have a completely different background to Andrew, I actually came from a travel agency in London, where I was in customer relations and also worked as their internal auditor.

So why did Funding Circle appeal to you?

Susie: When I joined, there were half the number of people and probably half the number of businesses, but I could see Funding Circle was expanding rapidly so the opportunity for development was there. The company has also been very accommodating to flexible working, so that’s helped a lot.

Andrew: Funding Circle is an incredibly exciting and innovative business. My role at Funding Circle is also quite different to what I have done in the past. Previously, I was a solicitor with clients and now I am business manager with legal knowledge, which can be very helpful. When I instruct lawyers and insolvency practitioners, I know what they’re doing and I also know what to expect.

Why is what you do important for our customers?

Andrew: It’s important for investors to know that we work very hard to maximise recoveries for them, whilst also trying to be fair to businesses and to give them a chance to get back on their feet. We look at the same factors in every case and have the same requirements from businesses, the main requirements being transparency and regular communication. However, every case is unique. From a borrower’s perspective, it’s important for them to know that they are dealing with fair and reasonable individuals who want to work with them to get the best result for all.

Susie: Yes exactly, and each case is different. You’re working for the benefit of both investors and businesses. Whilst we want to secure the maximum recovery for investors, we also want to show empathy towards the borrowers and make the right decision for all parties involved.

There is risk with lending and inevitably a small proportion of businesses will struggle to keep up with their repayments, but what do you consider to be the best outcome if this happens?

Susie: It’s a good result when we have achieved a recovery that works for both parties; the investors get their money back and it is affordable for the borrower.

Andrew: The best outcome is 100% recovery and a surviving business! But other than that, a good outcome will only come from great communication with the borrower. When there’s two-way communication, you can really understand their position which gives us flexibility to find an affordable solution that meets everyone’s needs. Ideally this will also help the individuals carry on running their business, having come out of the financial difficulty they previously saw themselves in.

And what is your favourite thing about working at Funding Circle?

Susie: The buzz in the office; everybody is busy and it’s a great environment to work in. It gets you out of bed in the morning!

Andrew: The way that everyone is committed to not only making their own teams the leaders in their field, but that everyone shares the vision of where this business is going. It is very impressive and not something I’ve come across before in my working life.

And what is the most difficult part of your job?

Andrew: Leaving in the evening!  Seriously though, sometimes we have to make very difficult decisions and it’s not easy when you think about the impact those decisions might have on people. Leaving those decisions in the office when I go home is the most difficult part of my job, but fortunately my wife is a good listener.

Susie: Speaking to business owners who have tried everything to turn their business around but are still unable to find the money to meet their repayments.

Yes, that definitely must be tough. On a lighter note, can you tell us an interesting fact about yourself?

Andrew: I was bitten by a seal in the Galapagos Islands. I’d been snorkelling and as I got back into the boat, a seal bit my knee. It didn’t hurt at all, it was a friendly nip!

Susie: As we’re talking about animals, I was stung by a hornet when I was younger and remains as one of my most vivid memories. The hornet was huge!

Ouch! That sounds nasty. And aside from run-ins with various mammals and insects, what other interests do you have?

Susie: I enjoy socialising with my friends, without my kids! I also enjoy running as it gives me time to process my thoughts.

Andrew: Illegal raves in Vauxhall… I wish.  I’m quite boring really – I like cooking, reading and hanging out with my wife and two daughters.

From the Galapagos to Vauxhall, very interesting! We’ll finish on this one, do you have a favourite city?

Susie: London, without a doubt. You’re going to say something abstract aren’t you Andrew?

Andrew: St Petersburg! The Hermitage in St Petersburg is awesome, and they have a mini version of St Basil’s Cathedral down a little alleyway, which is very atmospheric.

 

Jack Pritchett

Senior Communications Manager

 

17 thoughts on “Your 5 minutes with… the Insolvency Team

  1. Its nice to see faces to the people that write the comments on my loans that are struggling. It must be quite busy now.
    Perhaps you can go into more detail on how far you go into recovering monies owed and when do you write a loan off.

    • We consider every legal process available to us to recover monies owed; including seeking county court judgements, charging orders and bankruptcy. We would prefer to enter into payment plans which are affordable to the borrower but if we’re not getting the right level of communication and information from them, we are sometimes left with no choice.

      There are broadly two scenarios when we write off the outstanding amount of a loan:

      1. Formal insolvency proceedings have ended and we have received the dividend (if any) from the insolvency practitioner. The debt has effectively been “washed off” by the procedure and we will have no recourse against any party.

      2. Where we enter into a payment plan with a borrower which results in a partial, rather than full, recovery. Agreeing a payment plan is a careful balance of encouraging the borrower to pay as much as they can afford, without tipping them into bankruptcy where the returns are likely to be much smaller. We will often ask to see financial statements and will carry out credit checks to ensure that the amount offered really is all that they can afford.

  2. Most loans seem typically to have director guarantees but still show shortfalls when they go bad. Why does FC not pursue the directors to avoid this type of shortfall?

    • We do pursue director guarantors for shortfalls, although whether we make any recovery will depend on the assets of the guarantor at the relevant time. It is not unusual for directors of insolvent companies to have put all their personal assets into their distressed company so at the time the company enters a formal insolvency procedure there may be nothing to pursue.

      That said, where the guarantor does have assets we will seek to recover the shortfall if possible, which may involve us entering into a payment plan with the guarantor. If the guarantor is unwilling to work with us to achieve a recovery, or if we believe that he has hidden assets or deceived us in any way, we will petition for the individual’s bankruptcy. If this happens, the amount we will receive is often low and/or will be paid to us after quite a long time. This is, unfortunately, an unavoidable consequence of a formal procedure.

  3. Nice to see the people involved. Insolvency is an important issue and needs people with experience in this area, people who know the dodges and how to counter. I hope the new staff to be engaged will come with good experience of insolvency and debt chasing.

    • Vijay joined us on 11 November, with 10 years’ experience in personal and corporate insolvency in both UK and foreign jurisdictions. The insolvency experience is much wider than the three individuals currently in the Insolvency Team. We are regularly in consultation with members of the credit team, senior management and external consultants such as Osborne Clark and Begbies Traynor who provide us with insolvency and debt related advice.

  4. Twice the interview speaks of ” a small proportion of businesses struggling to meet their obligations “. So how come I got so many of them ? I’m so pleased that you are enjoying being kind to them in your lovely atmosphere – but please think also of the investors.

    • We are sorry to hear that you have several businesses that are struggling to meet their obligations. When a borrower is late with payment, we are monitoring them closely, requiring regular communication and information from them, and we will always take whatever steps we consider necessary to protect the interests of the investors.

        • If the goal is to ruin Funding Circle for those of us comfortable with the risks, then by all means, seek this. I think you’ll find, if you spend some time digging on the forums, that longer term users or Zopa were generally not happy with the introduction of Safeguard, as it dropped their rates of return.

          • I agree with you Jimbo, as one of those longer term Zopa investors you mention, I was hoping for a negative answer from the insolvency team….

          • We have discussed the possibility of introducing a provision fund, but we have chosen not to include one. Investors can choose who they lend to at Funding Circle. If we had a provision fund, investors would be exposed to more businesses than they lend to. Provision funds need to kept small in order for investors returns to remain competitive, which can mean bad debts may not be fully covered.

    • It’s good news. We need to expand this team alongside our expanding loan book, so that we have capacity to give our full attention to each late loan or distressed business. Also, with more members in our team we are able to develop new services to help protect our investors.

  5. 2 more people joining by the end of the year, but the only jobs I ever see advertised on this website are for web developers – how do I find out about these jobs?

    • We currently use internal recruitment personnel, and external recruitment teams to help us source candidates for jobs, but I understand that we will be building a new “Jobs Page” soon.

      • Andrew
        My name is Alex Woods and I am a London-based litigator specialising in financial mis-selling and recently I have been dealing with interest rate swaps through insolvency practitioner clients.
        You should be aware that many IPs are not looking at this area carefully enough and in fact 40,000 UK businesses may have been mis-sold them (FCA’s stats, not mine) and this can be a very real and very substantial asset (100-200k) indeed that can prevent businesses going under or provide better dividends if they do.
        I would urge you to raise this with Begbies Treynor and your lawyers and consider the issue carefully when looking at distressed businesses.
        PS. I am a recent investor to Funding Circle which I have so far found to be excellent.
        Best
        Alex

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