The announcement follows an almost year-long review process, with the firm having submitted its application in October 2015.
Nick Harding, founder and CEO of Lending Works, said: “This achievement is the culmination of what has been an intensive journey for us over the past year and vindicates all that we do and stand for as one of the UK’s leading P2P platforms.
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“Fair and accessible financial services that uphold the highest standards in both service and governance is a guiding principle of our business.
“The authorisation process is a positive move that will give better protection to consumers, ensure greater transparency and accountability in our sector and will ultimately help grow the profile of peer-to-peer lending in the UK as a genuine, strong and competitive alternative to mainstream, traditional lenders.”
Nick claimed that the authorisation validates Lending Works’ processes, systems and policies, as well as ensuring high standards for compliance and risk management.
Lending Works also took the opportunity to reveal plans for a new Isa, which will be given an official launch date once HM Revenue & Customs Isa manager approval is obtained.
The Isa follows the launch of the government’s Innovative Finance Isa (IFIsa), which is expected to double P2P funding in the UK.
“With full authorisation in hand, the next step for us is to launch our new Isa – something we have spent much of the past few months preparing for," Nick explained.
"Given the great benefits this new tax-free wrapper will bring, the level of enthusiasm among our lenders, and indeed consumers within the wider sector, for the new IFIsa has been substantial.
“We very much look forward to delivering this new product in the near future.”