LendInvest says the deal gives it the largest institutional capital base of any UK fintech lender on record.
The UK’s biggest fintech lender in the property sector is busting into the buy-to-let space – thanks to a funding deal with one of the world’s biggest banks.
Citi has agreed to provide LendInvest with a long-term warehouse funding facility. The cash will be used to lend to professional landlords and investors in the buy-to-let market, which LendInvest estimates is worth £40bn. The buy-to-let product will initially be piloted with a select group of mortgage brokers, with plans for a wider roll-out over the coming months.
The loans will carry terms up to 30 years, which takes LendInvest into new, longer duration territory. Until now the company has specialised in short-term bridging loans. Technology will be a key focus with the buy-to-let product, which is supported by an entirely online application and management portal. LendInvest has suggested that this will yield swifter turnaround times than incumbents can match.
The firm says that this is a natural next step which will accelerate the volume of its lending, while creating more opportunities for what may now be described as a gaggle of institutional investors. LendInvest now manages over £500m of lending capital on behalf a diverse group of institutions, including Macquarie Bank, Merseyside Pension Fund, a UK challenger bank and, now, Citi. The company also manages a discretionary fund by the name of LendInvest Capital, has recently kicked off a retail bond programme on the London Stock Exchange, and maintains its online investment platform for sophisticated individuals (it recently closed to retail investors).
“Institutional capital coming onto our platform from some of the world’s largest institutions is the ultimate validation of the quality of the lending we do,” said Christian Faes (pictured), co-founder and CEO at LendInvest. “This new funding line from Citi shows how our business has evolved from disruptive FinTech startup to established scale-up business as we move towards the mainstream mortgage market.”
Expanding product sets, in part with a view to extending loan durations, is all the rage in alternative finance at present. Only this week, MarketInvoice, another fintech lender, branched out into the business loan market, after over half a decade of dedicating itself to invoice finance solutions. In branching out into buy-to-let mortgages, LendInvest is encroaching on the territory of fellow fintech lender Landbay, which has lent £65m to date, according to AltFi Data.
“Citi’s backing equips us with the firepower to expand into longer-term lending, as we take our superior technology and processes into the professional portfolio landlord market,” continued Faes. “It also gives us an opportunity to work closely with a team that is world-class in the global mortgage market and a well-established player in the securitisation space.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.