Chris Hannock

Crowd2Fund enters property lending market

Crowd2Fund has launched a new property loan product which qualifies for inclusion within the platform’s Innovative Finance Isa (IFIsa).

The new product can be secured against commercial or residential property and is targeted at businesses which own property, or directors who are willing to offer their property as security.

Crowd2Fund will be providing loans between £100,000 and £1m typically lasting for three to five years with an estimated APR of between 6-8% before fees and bad debts.

Crowd2Fund collects a 1% annual fee on interest and capital payments to the investor, which is collected on receipt of the payment from borrowers.

“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, CEO of Crowd2Fund (pictured above).

The Crowd2Fund property loan will sit alongside the platform’s range of debt products, which include standard loans, revenue loans, bonds and venture debt.

The introduction of property loans will allow Crowd2Fund investors to diversify their portfolios according to their risk appetite as investors can commit as little as £100.

Property loans will be included within the platform’s IFIsa, which has an allowance of £20,000 in the 2017/18 tax year.

This has the added benefit of sheltering interest repayment from tax. 

“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,” Chris added.

The first property-backed loan on the platform is set to be a £300,000 facility for Mark Marengo, a Savile Row tailor looking to export sharp-cut tailoring internationally.

All businesses which run a property-loan campaign are required to let Crowd2Fund take a charge over their tangible assets.

The value of the secured property must cover 100% of the total loan value.

This means that if the business defaults on their loan, the property will be taken and sold to repay investors.

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