Rebuildingsociety.com, the peer-to-peer and peer-to-business lending platform, has received full authorisation to do business from the UK's Financial Conduct Authority after a trying three years of 'interim permissions.' The reasons for the delay involve personnel changes at the FCA.

The firm was founded in 2012 and applied for full authorisation in November 2014. Lenders - which at first were overwhelmingly HNW lenders - use its website to identify firms in which they want to invest and to set their own rates of interest.

In 2012 the company, which has been described as a crowdfunding website that resembles an eBay for loans, told investment advisors that they could earn a 1% introduction fee when they refer clients who lend a minimum of £2,000.

Compliance Matters asked Daniel Rajkumar, its founder, about the long and winding road to authorisation. He began by explaining the nature of the business: "The majority of early P2P investors have been HNWs. A good proportion of them have been managing their own investments and don't mind taking on high risk. Platforms like ours connect small-to-medium businesses with HNWs. With the innovative financial ISA, we'll have more retail customers."

When asked whether the platform started off being dominated by HNW investors, with their dominance falling gradually as volumes grew, Rajkumar agreed: "Yes, but it varies significantly. Our most prolific investors from the early days remain the mainstay of our business and act as ambassadors for it. Along the way, some have become more selective about the types of business they lend to.

"It is part of the FCA's remit to make firms 'treat customers fairly,' so its concern for HNWs is not so prevalent with our platform as with crowdfunding or equity investors. We're debt-based rather than equity-based. The regulator realises that a loan is more familiar as an instrument in the financial services industry. Investors, however, are attracted to equity because of tax incentives. Not so many people know about equity - many potential retail investors are unaware of the repercussions of dilution and illiquidity.

"We were on interim permission for 27 months. We consider that to be very long. This is partly because we had five different case managers during the process. They were passed from pillar to post all the way through our application. The authorisations department is where many people start their careers at the FCA. Within 6 months anybody who is found to be useful is poached by another department. The FCA has also moved other people on without us ever finding out why."

Rajkumar revealed another reason why the application process took so long: "We were applying to be a network principal, which means that we can work with partners who are allowed to use our authorisation as a P2P electronic lending platform. We hold client money as well, so we are regulated by CASS [the 'client assets' part of the FCA rulebook]."

Rebuildingsociety.com does not work with many investor intermediaries, however. Rajkumar explained: "A lot of discretionary fund managers have been spoilt by advisers offering them a commission. We can't charge investor fees. In many cases they don't want their customers to know that they are charging them."

In its capacity as a network principal, rebuildingsociety.com is trying to make the most of its FCA 'permissions' by working with appointed representatives who wish to set up and operate a P2P lending platform. With its sister company White Label Crowdfunding, it now offers a combination of software-as-a-service and 'compliance as a service' to firms that want to join its network.