The North London-based regulated Peer-to Peer (P2P) firm and Innovative Finance ISA provider announced yesterday it had appointed joint administrators to wind up the firm.
Its P2P products and IFISA are not covered by the Financial Services Compensation Scheme (FSCS).
MoneyThing, which began as an online pawnbroker, is the latest in a growing line of P2P lenders to go into administration.
The firm effectively closed its doors to new business a year ago as problems mounted. It leant money for property and other purchases with loans funded by users.
In a statement yesterday the firm said litigation from a borrower had been a major factor in the decision along with a tough 2020.
The company said: “The directors of MoneyThing have taken this decision in order to protect the interests of the companies’ creditors as a whole. We have taken into account the tougher trading conditions experienced in 2020 as well as litigation by a MoneyThing borrower.”
The company says that going into administration will protect the interests of company creditors and provide an “orderly windown.”
MoneyThing warned earlier in December that if it failed to reach agreement with the litigating borrower it may have to go into administration.
In 2019, the firm leant £91m and paid interest of £8.1m. It provided a range of P2P products as well as an Innovative Finance ISA.
Moorfields Advisory has been appointed as administrators. The administrators are expected to wind-down the remaining MoneyThing Peer to Peer loan book, return monies to lenders and conclude the firm’s business activities. The administrators will be contacting MoneyThing customers.
MoneyThing says the administration is not expected to have a “material impact” on lenders or borrowers.
The FCA issued advice to MoneyThing customers yesterday.
It said MoneyThing arranged ‘crowdfunded’ loans used to fund business lending secured against assets such as property, as well as pawn-broking style loans secured on items of value.
The FCA said it was unable to comment on the tax status of the MoneyThing Innovative Finance ISA as this was a matter for HMRC.
However it pointed out that IFISAs do not have Financial Services Compensation Scheme (FSCS) protection and P2P products are not covered by the FSCS.