New P2P lender with skin-in-the-game gets full authorisation

By Ryan Weeks on Friday 28 April 2017

Alternative Lending

Property lender Kuflink gets full authorisation, plans IFISA launch.

Kuflink, a platform giving investors access to property loans, has received full authorisation from the FCA. The firm is already planning the launch of its Innovative Finance ISA, pending permission from HMRC.

Kuflink is effectively a peer-to-peer add-on, built in the style of the Octopus Choice offering. The platform is part of the Kuflink Group, which also features a bridging lender called Kuflink Bridging. Kuflink Bridging, which itself became regulated in October 2016, originates and underwrites the loans which individuals may now invest in via the P2P platform.

Kuflink Bridging, which has been in business since 2009, is the principle lender in all deals and retains a 20 per cent first loss position in all loans on its balance sheet. Despite taking the first-loss piece, Kuflink will earn the same rate of interest as P2P investors.

Kuflink uses a separate credit committee to assess all bridging transactions and decide which ones to list on the P2P platform. In theory, only the best loans are listed for investment. There is a difference between the rate that loans are originated at and the rate delivered to investors, but Kuflink CEO Tarlochan Garcha says that this is only enough cover the company’s overheads. Kuflink makes its money by being paid a fee of 2.5 per cent of the value of every loan it lists by Kuflink Bridging.

 “Our authorisation from the FCA validates our delivery of a regulated peer-to-peer service that allows our customers to engage and transact in a safe and secure environment,” said Garcha. 

It took the Kuflink platform just eight months to get authorised, which is a good deal faster than many of its competitors have reported. And while a spurt of small and middle-sized P2P firms have been authorised recently, few operate within the property sector. LandlordInvest is one exception.

The “big three” peer-to-peer lenders continue to operate under interim permissions, and yesterday’s news that the FCA is in purdah until after the election will likely delay their authorisation still further.

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