• info@hnwlending.co.uk
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  • 72 Charlotte St, London W1T 4QQ
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  • 0203 488 0184

General Risks

General Risks

This list is not designed to be exhaustive but represents the major risks we see for borrowers. Borrowers are encouraged to seek their own legal advice before entering into a loan through HNW Lending Ltd


Regulatory risk

HNW Lending Ltd is subject to ongoing compliance with all applicable FCA principles, rules and guidance. In addition to forging a good reputation with the Regulator, compliance is key to our reputation with clients and third parties. A failure to keep up with regulatory change will be an ongoing risk. Monitoring of the regulatory position, including awareness of new rules and guidance applicable to our business, will be key to ensuring our policies and procedures stay up to date. HNW Lending Ltd has appointed external compliance advisors as an additional source of information and challenge on what constitutes proper compliance and good practice in the industry


Reputational risk

As a business that relies on the custom of individual borrowers and lenders, corporates and pension fund managers, preserving our reputation is critical to the ongoing viability of the business. Poor reputation could arise from a large number of bad loans, investors losing money or bad press in the media or on social media, for example through being associated with financial crime. This is likely to impact the business in reducing the number of borrowers and lenders


Operational risk

HNW Lending has a simple structure. We are a small firm with clear reporting lines, where everyone is known. There is also a business continuity plan in place to deal with our core operational risks such as loss of premises, equipment and personnel. As HNW Lending operates a cloud-based business, loss of premises or equipment are not really a major operational risk to the business as the data behind the business is stored in several places at any one time and is backed up simultaneously. Loss of the key person is the biggest operational risk to the business, which is why there is a back-up person in place to run the business while a decision is made whether to recruit another person or wind the business down


Conflicts of Interest

By operating a two-sided marketplace, HNW Lending is particularly exposed to the potential for the risks of the interests of some clients conflicting with the interest of other clients. As with any business, there is also the risk that the interests of our firm might conflict with those of clients. In particular it is in the interests of borrowers to receive the loans they request through HNW Lending, whereas if the quality of the loan is poor that would not be in the best interests of the lenders. Arguably this is also in the short-term interests of the business because the more loans we facilitate, the more income we receive. However, this is offset by the fact that high-quality loans are central to our reputation, and therefore it is in our long-term interests not to promote risky loans. We are aware of this conflict and continue to manage this risk