What happens to lenders when a platform shuts down?
The closure of a platform: a scenario that worries investors
This is probably the question that every crowdfunding investor fears the most: What happens if my platform shuts down? Am I going to lose my money? Who will manage current refunds? How can I track my investments?
These concerns are legitimate, but the reality is now much more reassuring than it was a few years ago. The European regulatory framework has considerably strengthened the protection of investors in the face of this scenario.
Regulatory protections that cover you
Since the entry into force of PSFP regulation (EU 2020/1503), each approved crowdfunding platform in Europe must have an extinctive management plan. This plan ensures that even if business ceases, your loan contracts continue to be managed.
Your rights as a lender
- Vos loan agreements remain valid : the closure of the platform does not end the repayment obligations of borrowers
- One third party provider takes over management Refund flows
- You keep a access to your information via a dedicated space
- Les repayment deadlines are maintained according to the original contractual schedule
- You are informed in advance of the transition and practical modalities
How is the transition taking place in practice?
When a platform ceases its activity, the transition to the extinctive management provider follows a structured process:
Phase 1 — Notification The platform informs regulators (AMF, ACPR) and all investors and borrowers of its decision to cease activity. The fire management provider is identified and presented.
Phase 2 — Data migration. All data (contracts, schedules, contact details, payment histories) is transferred to the service provider. Thanks to the migration tests carried out regularly beforehand, this stage is smooth and verified.
Phase 3 — Activation of dedicated spaces. Lenders access a new secure space where they can find all of their information: current contracts, upcoming deadlines, history of repayments received. A simplified identity verification process may be required.
Phase 4 — Ongoing management. Refunds continue in an automated manner. The service provider manages the withdrawals from the borrowers and pays them to the lenders according to the terms of the original contracts.
What does not change for you
The key point to remember is that closing the platform does not change the terms of your loan contracts in any way. The interest rate, the repayment schedule, the outstanding capital: everything remains the same. Only the interlocutor changes.
With a service provider like Runoff, which provides a comprehensive lending area and fully automated processes, the transition is seamless. Developed by Capsens, the solution benefits from proven technical expertise in the management of crowdfunding platforms.
Some precautions as an investor
To maximize your peace of mind, here are some best practices:
- Verify that your platform is PSFP approved : it is the guarantee that an extinctive management plan exists
- Keep your own copies of your loan contracts and deadlines
- Keep your contact information up to date on the platform to be informed quickly in case of change
- Consult the continuity plan of your platform, often accessible in regulatory documentation
Closing a platform is not the end of your investments. Thanks to extinctive management, your refunds continue, in a supervised and secure manner.
