ARC is a regulated European credit agency which is registered with the European Securities and Markets Authority. The company has once again conferred an SQ1 “Servicer Quality Rating” on LendInvest,after first rating the platform back in June 2015. The rating is designed to assess the property lending platform’s origination, underwriting and servicing processes. The rating is based on a number of factors, including corporate governance, internal controls, due diligence, data disaster mitigation, management experience and the financial health of the company.
Although ARC Ratings is one of the lesser-known agencies, the SQ1 rating is nonetheless a positive sign for LendInvest. No other platform within the European peer-to-peer lending space has yet managed to attain such a rating. LendInvest secured a £40m warehouse funding line from Macquarie in April, apparently laying the foundations for a securitisation. The European marketplace lending sector has produced just one securitisation to date, Funding Circle’s recent SBOLT 2016-1. LendInvest also appointed former OneSavings Bank Executive Chairman Stephan Wilcke a few weeks ago, and is said to be on the road to a landmark IPO. ARC’s positive assessment of the platform will likely prove useful on both fronts.
ARC Ratings commented on the rating: “Over the past 12 months, LendInvest have turned their second operating profit (£3.1 million), secured £39 million worth of [equity] investment from two institutional investors, established themselves as the largest online property marketplace in the UK, invested substantially in expanding their workforce to match the growth of the business, brought in a new, vastly experienced, Head of Credit to add a new level of depth and rigour to LendInvest’s underwriting process in addition to expanding and investing in the IT team in order to keep themselves at the forefront of ‘FinTech’ developments.”
LendInvest has lent over £660m to date, spread across bridging and buy-to-let loans. The £39m in equity funding referred to in the ARC comment came from Beijing Kunlun and Atomico, which contributed £22m and £19m respectively, in separate financing rounds.
Christian Faes, Co-Founder and CEO of the platform, weighed in on the SQ1 rating: “Lending money is easy; lending it well requires discipline, focus and years of experience. Without an exceptional underwriting and loan servicing infrastructure, LendInvest would not be the fast-growing, profitable and well-capitalised business it has become. It is hugely gratifying to receive a second top rating from ARC Ratings. It acknowledges the hard work we have put in to develop market-leading underwriting and servicing standards.”