Online lender launches its first property-secured loan, expanding its IFISA offering into new niches.
Online lending platform Crowd2Fund is looking to offer investors more diversification opportunities with the launch of its first property-backed loan. These new loans will qualify for inclusion within the platform’s Innovative Finance ISA.
Crowd2Fund was one of the first alternative finance providers to launch an IFISA offering. The firm already offers a wide range of debt-based products for businesses, including standard loans, revenue loans, bonds and venture debt.
The new property loans are targeted at businesses which own property, or directors who are willing to stake their property as security on a loan. They will range between £100k and £1m in size, with durations of 3-5 years, and estimated gross interest rates of 6-8 per cent. Fees for investors are set at 1 per cent of the value of repayments. These fees are deducted from each individual repayment.
The minimum investment amount for the new property loans is £100. Crowd2Fund is pitching them as an attractive diversification play for investors, one that will offer comparatively less risk than some of its other loan-types. The new loans will carry a 100 per cent loan-to-value ratio. They will be repaid on an amortising basis, and can be sold via the platform’s secondary market, depending on liquidity levels.
Crowd2Fund claims to have sustained zero defaults to date, across all loans. The first property-backed deal on the platform will be a £300,000 loan for Mark Marengo, a Savile Row tailor.
“The launch of our property loan gives investors access to an asset class which has performed steadily over time and is easy to understand,” said Chris Hancock (pictured), CEO of Crowd2Fund. “These asset-backed loans are likely to be popular with P2P crowdfunding investors new to the market due to the perception of them being less risky than standard loans, which do not have security taken out on them.”