BondMason Peer To Peer Lending Closure – My Thoughts

Bondmason closing

BondMason Closure – My Thoughts

** BondMason review updated August 17th, 2020 **

On May 23rd, 2019, the powers that be at Bondmason decided to discontinue their peer to peer lending, choosing to no longer accept new investors and wind down their current loan book. The reasons for this decision are based on rising cost factors, economic forecasts and the ability to deliver net returns based upon equivalent risk. Looking back after Covid-19, this proved to be a timely decision.

Bondmason is not in financial difficulty and their loan book is being run down and is target to completed by the end of 2021 or early 2022. will be completed over the next 12-18 months. Bondmason recently stated they have returned over £15m to investors and collections continue on the final 25% of loans.

I had a phone chat with Bondmason CEO Stephen Findlay who explained Bondmason’s decision to close its peer to peer lending business.

What Happened To Bondmason?

On paper, BondMason filled all the wants of a hands-off peer to peer lending investor. Attractive returns and a set-and-forget auto investment backed by an experienced team who vetted investment opportunities.

Stephen Findlay explained that Bondmason isn’t closing due to financial difficulties and Bondmason’s highly analytical team identified some challenges that led to the closure decision. These challenges are highlighted below:

Bondmason had struggled to obtain FCA regulation: Bondmason experienced increased legal, compliance and regulatory costs as it tried to obtain FCA regulation. Ultimately, Bondmason didn’t fit what the FCA considered a standard peer to peer lending company.

Increased institution money: Large financial institutions have been flushing the peer to peer lending sector with money making the space more competitive and driving returns lower.

Bondmason didn’t feel like it could continue to offer 6% returns: Bondmason had achieved attractive returns for its investors but didn’t think it would be able to continue to achieve 6% returns long-term.

Will Investors Get Their Money Back?

Bondmason is currently collecting loan payments from the peer to peer lending companies it invested through. Bondmason stated is is collecting the final 25% of loan monies from the lending platforms it invested through.

Pre-Covid-19, Bondmason expected investors to receive their full capital and interest but hasn’t stated whether these expectations continue to remain.

Bondmason: My Experiences

I gave BondMason a try during its early launch day and was extremely happy.

When BondMason announced an increase in fee structure and minimum investments, I decided to exit the platform. For those investing £5,000 – £25,000, the annual fee was raised to 1.5%. After tax, I calculated I would be earning between 3-5% per year which wasn’t very attractive to me considering the risk involved.

What Was BondMason?

BondMason was a UK based investment company that invests in receivables, invoices, peer to peer loans and debt. This is where things get a bit confusing but bear with me as I try to explain BondMason’s set up. Remember it is very important to understand what you are investing in.

BondMason has an outside / sister company named BondMason Client Ltd (aka BCL) which on paper, is a client of BondMason the platform. BondMason’s team analyses loans on peer to peer platforms and buys loans that passes their quality criteria. BondMason’s platform then facilitates the sales and purchase of these loans to lenders in the form of receivables. BCL collects loan payments and distributes them to BondMason the platform, which then distributes payments to lenders. BondMason also invests in each loan alongside lenders to keep interests aligned.


Here’s an illustration:

Bondmason structure

This set up means BondMason could be considered more like an investment fund than a true peer to peer company.

How Can I Contact BondMason?

UK Tel: 01582 802 000

When Did They Launch?


Was BondMason Regulated?

Bondmason was unable to obtain FCA regulation.

BondMason was one of the first companies accepted onto the FCA Innovation Hub program in April 2015. Their model was considered (i) innovative (ii) a positive contribution to financial services and (iii) current regulations didn’t fit their operating model. The senior team are FCA approved persons.

How Much Interest Did BondMason Pay Investors?

BondMason Core clients achieved an average yearly net return of 6% since 2015.

What Were The Fees?


  • 1.5% p.a. on investment amounts for first £25,000
  • 1.25% p.a. on the next £75,000 (£25,001 to £100,000)
  • 1.0% p.a. on all invested amounts over £100,000
What Were The Length Of The Loans?

The loans ranged from one month to five years. When you have auto investing enabled, you cannot select loan term lengths or the investments.

What Securities Were Used Against Loans?

BondMason didn’t specify loan details on their website. Most loans were listed as asset secured. Only one of my 50 loans was unsecured.

BondMason invested in private loans as well as loans on other peer to peer platforms, so security varied but was is usually property related.

Was There A Provision Fund?



Completely Hands-Off Investing

Peer to peer lending can be very time-consuming. To overcome this problem, BondMason created a true set-and-forget platform. Many lenders yearn for investment platforms where they can passively invest money and receive interest payments while they eat Monster Munch and watch Emmerdale Farm. Of course there are downsides to passive investing convenience, one of these being lower return rates.

Director And Staff Highly Experienced In The Financial Sector

Many peer to peer lenders overlook the importance of Director experience when considering investment risk. BondMason has experienced Board Members and Directors who have many years of financial services and investment analysis experience. The financial team analyses each loan opportunity and invests alongside lenders. It’s good to know the loans are being analysed over by experienced people.

After my lengthy conversation with CEO Stephen Findlay, I have a high regard for BondMason’s team and its values. Stephen expressed how they realise people have entrusted their money to BondMason and the team doesn’t take this responsibility lightly.

Transparency / Great Communication

Without a doubt, BondMason is one of the most transparent peer to peer lending companies. Their statistics page outlines all the activity including loan types, defaults, returns and cash drag effects. Some peer to peer companies aren’t good at communicating with their lenders so I certainly tip my hat to them for their refreshing approach. Should you need help, the communication is excellent.

Invested In Loans Normal Lenders Wouldn’t Have Access To

Peer to peer loan options can be limited to regular lenders. Since BondMason used an institutional business approach, it had access to loans we don’t. For example, one of their loan partners has a minimum investment of £250,000.

Low Defaults & Extensive Due Diligence

BondMason’s high level of loan due diligence means loans default have been almost nonexistent. The financial team brings an institutional level of due diligence and only invests in loan borrowers and platforms they have personally met and interviewed.

Skin In The Game

BondMason invested in each loan it offers to its lenders, but their website doesn’t specify how much they invest. It certainly inspires confidence knowing that company interests are aligned with investors and that they to stand by the loans they buy.


The website is easy to use. Here is what the investor dashboard looks like:

BondMason reviewHere is page the shows what loans you are invested in:

BondMason review


BondMason had some pretty significant annual fees of up to 1.5% that dragged down investor returns (see above in the Fees section).

As you’ll know, I dislike investments with high fee structures. Low fees are the reason why I invest in index trackers and not managed unit trusts.

At 1% I thought BondMason’s fees were palatable, but at 1.5%, I found this no longer to be true. Let me show you how much this 0.5% fee increase would cost you over 20 years:

With £20,000 invested, the 0.5% extra fee costs you over £6,924 or £346 per year. 

While I understand the reasons for the fee hikes, I still dislike them. If the target net return rate of 6% is met, some higher paying tax people may only net 4-5% post-tax which could be too low for the risk.

£5,000 Minimum Starting Deposit

BondMason increased its required minimum account balance from £1,000 to £5,000. This was a shame because many early adopter investors didn’t want a higher exposure in the platform and had to liquidate or run off their accounts. BondMason made this change so the team could focus on finding quality investment loans while continuing to offer a high level of customer service.

While I was disappointed about the minimum rise, I understood why BondMason made the changes.

Lender Invests In Receivables

Since lenders were buying receivables from BondMason Client Ltd., lenders had no security rights over loans. I quote from Bondmason’s website, “Lenders have no recourse against either the seller or the borrower under the loan related to the receivables in the event that the receivables are not paid to the BondMason Customer Funds Account.” This added another layer of lending risk.

No Specific Details About The Loans Your Money Is Invested Into

BondMason was designed to be a hands-off platform so I can understand the limited level of investment detail. It would still be nice for lenders to know what companies and loan receivables their money was lent to; for diversification purposes if nothing else.

Cash Drag Hurts Your Returns

Cash drag refers to money sitting idly in your account uninvested. BondMason’s unique investing model made cash drag inevitable as there was no way for 100% of every lender account to be fully invested at all times. I expected 10% of my funds to be uninvested although some Financial Thing readers claimed their cash drag to be as high as 40% at times.

BondMason’s Sister Company (BCL) Is The Company Designated To Process The Loan Book In The Event Of Platform Failure

As explained above, BCL was the third party company created to buy loans. BCL is also the company that is assigned to process the loan book in the event of company failure. There could be some conflict of interest here so I would much rather see use of an independent third party for loan administration. If BondMason the company does fail, there is a chance BCL could also fail.

Not FCA Regulated

While I don’t put too much weight on FCA regulation, it would be comforting to know BondMason was under the watchful eye of the FCA. BondMason worked closely with the FCA but couldn’t receive the regulator’s approval.

My Strategy

For me, BondMason was a set and forget platform so my strategy was simple. Once the money was deposited, there wasn’t much else to do other than watch and wait. I used the 1% maximum per loan to be as diverse as possible. This selection is under the settings menu in the dashboard.

Once I deposited money, it took two weeks to become fully invested and after that, everything was smooth sailing and monthly payments were received promptly. Most of my reinvestment money was re-deployed quickly but there were times where small amounts of cash sat idle.

The BondMason Conclusion

I was disappointed to learn of Bondmason’s decision to close its peer to peer lending business. I am a fan of BondMason’s transparency, team experience, and business model.  I loved how the team carefully analyses each peer to peer company and loan they invest in. CEO Stephen Findlay was dedicated to the moral responsibility of protecting investors monies.

Unfortunately, the increase in annual fees and minimum account balances made me decide to exit the platform.

I have no doubt Bondmason will work diligently to wind down its loan book to ensure all of its investors are repaid.

If you enjoyed this review and want to learn more about peer to peer lending, click here and receive my complimentary Top 5 Peer to Peer Lending Sites Report.

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** This Bondmason review is for information purposes only. This information is not financial advice and has been prepared without taking your objectives, financial situation or needs into account. You should consider its appropriateness for your circumstances. All investing carries risks. Opinions expressed in this review are opinions based on my own personal experiences. The FSCS does not cover peer to peer lending and your capital is at risk. Please don’t invest more than you can afford to lose. **