YOUR RIGHTS
That's what they'll tell you. That's what we were told. You signed a business purpose declaration. You're not a consumer. Consumer protections don't apply. Case closed.
Except it isn't. Because buried in Funding Circle's own contract is a sentence they were legally required to include - and it changes everything.
In the same clause where we signed the business purpose declaration, required by law, is this:
"I/We understand that this declaration does not affect the powers of the court to make an order under section 140B of the Consumer Credit Act 1974 in relation to a credit agreement where it determines that the relationship between the lender and the borrower is unfair to the borrower."
Read that carefully. Even after signing the business declaration, the unfair relationship provisions of the Consumer Credit Act still apply. This isn't our interpretation. It's what Funding Circle's own contract says. In black and white.
Sections 140A to 140C of the Consumer Credit Act 1974 give courts sweeping powers to intervene when a lending relationship is unfair. The court can look at three things:
Was the interest rate excessive? Are there hidden penalties disguised as fees? Is that "contractual interest" clause actually fair?
Was the process reasonable? Were settlement offers genuinely considered? Was communication clear or contradictory?
Was vulnerability acknowledged? Was pressure applied at the worst moments? Was the complaints process captured or fair?
If a court finds the relationship unfair, the remedies are powerful: reduce or discharge what's owed, require repayment of money already paid, set aside unfair obligations, alter the terms of the agreement, recalculate what's actually due.
A court could, in theory, wipe out the "contractual interest" entirely. Remove the collection charge. Determine what would actually be fair.
There's another angle that matters. The loan was to our limited company. But the Personal Guarantee is against us personally. It targets our personal assets. Our family home. The document itself asked for our "Non-Business Email" and "Non-Business Telephone."
When they pursue the guarantee, they're not pursuing the company. They're pursuing *us*. As individuals. As a family. That crosses a line between business lending and something that affects human beings in their homes.
We believe the relationship may be unfair on all three grounds:
The terms: 10% completion fee taken before we saw money. 16.9% interest rate (10x+ the base rate). "Contractual interest" for months we never used the loan. Automatic 10% collection charge on default. Joint Personal Guarantee requiring both spouses.
The enforcement: Four-month delay with no settlement decision. Contradictory emails on the same day. Demand for charge on our home for minimal payments. Pressure applied despite vulnerability disclosure.
The conduct: Ignored our disclosed family health crisis. Christmas timing of Final Response. Defined our complaint scope without confirmation. Admitted a discrepancy, then denied it.
Before court, we can complain to the FOS. They can consider whether we were treated fairly, order compensation for distress, tell Funding Circle to put things right, and apply unfair relationship principles. The FOS is free. Court costs money and takes longer.
If the FOS doesn't resolve it, the Consumer Credit Act gives us the right to ask a court to intervene. The burden shifts - Funding Circle would need to prove the relationship *isn't* unfair.
If you're struggling with a Funding Circle loan, you may have more protection than you think. The "business purpose declaration" doesn't remove all your rights. The unfair relationship provisions still apply.
If they've charged excessive interest, applied penalty charges, ignored your difficulties, communicated misleadingly, or pressured you unfairly - you may have grounds to push back.
We're not lawyers. This isn't legal advice. If you're in a similar situation:
Don't assume you have no rights because you signed a business loan. The law may be on your side.
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