Assetz Capital launches SME income account
Assetz Capital, one of the UK’s fastest growing peer-to-peer alternative finance platforms, has launched the Great British Business Account (GBBA), with Provision Fund* to follow its first, and very popular, Green Energy Income Account that invests in renewable energy projects.
The GBBA account automatically invests in a broad base of Assetz Capital loans to UK SME businesses with a target rate of 7% gross per annum capped return. All loans funded - after passing strict credit policy - are secured against losses with the usual range of realisable security that Assetz Capital is well known for. Every loan in this account must specifically have property backed security to cover 130% of the loan amount, or greater, and also be 75% Loan to value or lower.
Stuart Law, CEO at Assetz Capital commented, “SMEs are the life blood of the British economy and it’s important that they get the growth support they need. Our new Great British Business Account does that thanks to investors looking for a fair return on their money, while being protected by our Provision Fund and the security of property backing each and every loan.
“It is this property security behind each loan that allows us to lower the cost of a loan to SMEs and in turn help grow those businesses by providing the funding they need, can afford and can guarantee via property security. It’s our cheapest form of funding for businesses at as little as an 8% borrower rate.”
Previously, lenders would need to have the time and the experience to manually browse through the loan catalogue and select loans manually before they invested. The new account makes investing in UK SMEs easier, quicker and more accessible. In particular, the new GBBA, like all Assetz Capital investment accounts going forward, will actively diversify an investor across all matched loans in a much quicker way than trying to manually invest across multiple loans.
The GBBA is made up of many short and long-term loans but as with the existing manual investment model, investors can sell their investment at any stage through the active aftermarket subject only to demand from other lenders. Such redemptions have been generally been in the same week as the withdrawal was requested, to date.
Interest is earned monthly but not all loans in this account pay monthly interest so it may be accrued on a limited number of loans for payments at the same time as the loan is repaid.
All investment in the Great British Business Account can be made and then managed through Assetz Capital’s comprehensive and market leading portal and the account is also available to SIPP pension investors.
Mr Law, added: “As peer-to-peer investment grows in interest amongst the population it is incumbent upon us to develop products in ever simpler ways. By launching the Great British Business Account, Assetz Capital is making peer-to-peer investment more accessible to lenders who just want to automatically invest cash in a certain category of diversified loans while remaining transparent and fair for all parties.
“For investors, there is a target 7% per annum gross, combined with a Provision Fund to cover any potential defaults. We are finding investors can set up an account on the site, transfer cash using Faster Payments Service and be invested in just one hour or so in most cases.”
Assetz Capital has seen steady growth in demand for responsible investing, with SME loans attracting much interest.
The loans are often backed by property so should one default, that security can be used to try to recover lenders’ capital (this is the mandatory minimum security for any loans that may come into the GBBA).
There is a minimum investment of just 1p allowing people to see how it works.
If a lender needs their money back early, via the secondary market they can sell on loan parts so long as there are other investors to purchase them.
To find out more about Assetz Capital or the Great British Business Account, click here.
- September 1, 2015