A quick update on Assetz Capital, which is rolling out a new means of investing in small businesses.
The “Great British Business Account” (GBBA) is designed to allow for passive exposure to Assetz’ secured SME loan portfolio. Those who invest in the GBBA will gain automatic access to a range of UK-based small business loans, all of which will be secured against property. The LTVs of all loans within the portfolio will max out at 75%. GBBA loans will also benefit from the coverage of the platform’s Provision Fund.
We understand that the GBBA intends to produce a capped return of 7% gross per annum. Stuart Law, CEO of the Assetz Capital platform, explained:
“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.”
The Assetz platform boasts a fairly broad product set, with the capacity to provide exposure to everything from small business loans, to property-based transactions, to invoice finance, to green energy loans. This isn’t the first time that Assetz has crafted a specialist investment account. In November last year the platform added a “Green Energy Income Account” to its offering. This product is not dissimilar in structure to the GBBA, save for its focus on renewable energy, rather than on UK SMEs.
The GBBA will speed up and simplify the process of lending to SMEs via the Assetz platform, shifting the onus to achieve diversification onto the Assetz platform itself. GBBA investors will gain exposure to a mixture of loan terms. All investments may be sold on the secondary market, subject of course to buyer demand.
Assetz has transacted just shy of £80m to date, with c. £23m having been lent since the start of 2015, according to the Liberum AltFi Volume Index. Given the major partnerships that Assetz has entered into over the past year, such as a referrals tie-up with RBS and a joint venture with the Interface Financial Group, we expect the platform’s lending volumes to start rapidly accelerating at some point. Assetz secured a £150m funding commitment from Victory Park Capital in January. Specialist lending accounts may well play an important role in ensuring that the company’s retail investor base continues to make a significant contribution to growth.