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The Assetz Capital platform is no longer open to investment from individual investors. No new investments into peer-to-peer loans are possible and, as a result, no new funds should be deposited. The existing loan book relating to the Retail platform is now in run-off and this will, over time, deliver the return of capital to investors. Full information can be found here . Existing Retail lenders can still log in, view information regarding their account and loan holdings and operate their account in accordance with the information regarding the run-off provided on the link above. Please see this important message regarding the currency of the information on the pages on this website.

Property Finance Options

Property Finance Options

Property can be a lucrative business for investors and developers alike, but, done badly, it can bring down the financial world as we know it. If I’d said that ten years ago, you’d think I was crazy, but having experienced the depression and devastating global crash, which we saw begin in 2007, we’ve lived through such consequences and understand the risks and how to mitigate them.

However, the banks and financial institutions still haven’t recovered or caught up with this basic thinking and, – in general, - continue to shy away from lending money to developers or property entrepreneurs.

Peer-to-Peer Lending at Assetz Capital

The beginnings

Assetz Capital began its peer-to-peer lending platform in 2013 with a senior board behind the business and a mix of experienced professional SME and property lenders. We also had support, through the NACFB, of a band of SME and property finance brokers who showed us business.

Peer-to-peer lending continues to be the growing phenomenon of the financial sector with an anticipated £4 billion to be lent through such platforms by the end of 2015, from which a growing proportion is in property arrangements.

How it works

Peer-to-peer works in a similar way to how the banks used to a long time ago: someone who requires money to grow or develop a good, solid business comes to a peer-to-peer platform because the loan process is more efficient, less restricted and without the backward looking mentality of traditional lenders.

Investors looking for higher, risk-adjusted returns on their investments lend to such businesses that have passed the platform’s criteria.

Experienced offering

Each platform is different, yet Assetz Capital is particularly proud of its experienced team of professional lenders and credit risk management division; businesses and property entrepreneurs seeking a loan are visited by one of our Regional Directors who ‘kick the tyres’ on each and every applicant, their business or their property project.

Having a tailored approach means that our experience can be used to fully understand a business’s needs, while also appreciating seasonal pressures, stock levels (on our SME lending side) and other factors such as planning, cost control, borrower experience and the suitability of the product being built (on the property lending side). This helps us assess everything that could influence risk and therefore the loan rate, and actually make a loan fundable.

Finance for developers

One of the first loans on the platform was a property construction deal – and a good reflection of the financial market we are still experiencing today when seeking finance for property-based initiatives.

An experienced property developer in Nottingham required a £1.5 million loan – the biggest peer-to-peer development loan at the time – at 50% LTV to build a 46 bedroom student block, now called Six Degrees.

As security for the loan, investors had a first charge on the site as well as a debenture charge over the assets and undertaking of the borrower. Being able to tailor a loan that suited both the borrower – or developer in this case – and the investor, meant that Assetz Capital was able to deliver a package that worked for all parties.

Taj Ubhi, the property developer and owner of Nottingham development Six Degrees, explained how he came to use peer-to-peer lending: “The banks weren’t helpful so I had to look for another way to finance the deal. The Assetz Capital team is fantastic and I had absolute belief in what they are developing, so it was great to see every aspect of this finance deal come off to perfection. I will inevitably seek funding through peer-to-peer for future developments.”

And true to his word, we have now finalised a further property project with Mr Ubhi in the form of a Property Investor ‘Hunting Licence’ – a product lost in the credit crunch along with SME overdraft facilities.

Assetz Capital is actively helping many property developers and house builders across the UK with finance for the second and third time. The finance options are also growing as demand grows so Assetz Capital now has the capability to structure bridging finance deals, buy-to-let loans as well as multi-million pound development loans.

In June, Assetz Capital has completed a £3.3 million development loan on a care home in the North West. This is the second such deal with this particular entrepreneur who has a proven exit model for each development. And there are others who are coming back for more because they find that we are keen to find ways to lend and, crucially, “speak their language”.

The future for property finance is strong, but it will not be through the traditional forms of finance for many years to come. The property market’s love affair with peer-to-peer lending has only just begun.

If you’re a property developer and interested in peer-to-peer lending at Assetz Capital, read more about becoming a borrower or lender.

 

 As with most forms of investment, peer-to-peer lending carries a degree of risk to your capital; in this case if the borrower is unable to repay their loan. At Assetz Capital, we seek to reduce this risk to our investors by taking asset security on every loan.

- November 6, 2015

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