Is crowdfunding or peer-to-peer lending regulated?



In the UK, the Financial Conduct Authority, often shortened to “FCA”, regulates most types of the crowdfunding sector, and authorises firms to operate.

Peer-to-peer lending is just one type of crowdfunding. The others are equity crowdfunding (think “Dragons Den”), and reward or donation-based crowdfunding where companies may seek to manufacture a new product and sell it at a discount to early buyers in order to fund that early development or production run. Reward or donation-based crowdfunding is not currently regulated in the UK – so we will focus on peer to peer lending and equity crowdfunding.

The FCA runs a rigorous vetting process for firms applying to operate a crowdfunding platform. They want to know all about the principals behind the firm, the systems and processes, how the firm will comply with the regulatory framework and that it has a robust business plan and sufficient financial resources to operate – and much more. This is all designed to protect both borrowers and investors and ensure that the industry can safely thrive.

You can find out more about the FCA and how they regulate crowdfunding here.

Karadoo Finance Limited is authorised to operate both peer-to-peer lending and equity crowdfunding. We’ve recently launched our first peer-to-peer lending platform at, the world’s first and only (as far as we are aware) dedicated crowdfunding platform for independent schools, offering schools the opportunity to quickly and efficiently fund capital projects on flexible terms. This innovative approach will be employed in Karadoo’s other platforms in the pipeline. Sign up here to keep up to date on our developments, or follow us on Twitter and Facebook.