Sourced Capital

Sourced Capital completes £267,000 loan in one minute

Sourced Capital has completed a £267,000 loan for a property developer, which was fully funded by investors via the platform in just one minute.

The client required the 12-month facility to acquire a former public house in Heywood, Greater Manchester, which has planning permission to be converted into seven one-bedroom apartments.

According to Sourced Capital, investors can expect to achieve a targeted return of 10-12% per annum, subject to the loan being fully repaid by the borrower.

Derek Pratt, commercial director at Sourced Capital (pictured above), said: “We have many qualified investors looking to support the right type of investment opportunity, so it was no surprise that we were able to fund this loan in just a minute for the developer.

“For those investors who were not able to participate on this occasion due to the speed of the loan being fully filled, we have a strong pipeline of further asset-backed property development investment opportunities due to open for investment over the coming weeks.

“We are lending to support a wide range of property transactions including ground-up developments, conversions, and refurbishments — while our sweet spot for lending is typically between £250,000 and £3m, we always assess each proposal on its individual merits, with the current pipeline demonstrating our willingness to support quality transactions both above and below this range if they provide the right calibre of opportunities for our investors.”

Although the loan was completed in a very short amount of time, Derek stated that before any loan is ever presented to investors, the loan proposal, the borrower and the intended loan security are all subject to a thorough due diligence process.

"A full and thorough understanding of the project and the borrower's requirements/intentions is always the starting point to determine if an acceptable and deliverable structure is feasible," he explained.

"If the concept is supportable in principle and the borrower accepts the indicative terms, the due diligence process begins in earnest to fully asses and verify all key issue; this includes the use of independent professionals to undertake the valuations, any MS reports and solicitors to confirm that good title and good security can be obtained.

"Only when all conditions precedent (legal, financial and operational) can be satisfied, and contracts are exchanged will we present a transaction to our investors for their consideration."

Derek further clarified that only registered investors are able to partake in any live loan launch, and all investors must have completed the full onboarding process before being able to pledge any funds — as part of the process, investors must confirm they are either sophisticated investors, high-net-worth individuals or corporate investors (including SIPP and SSAS), and must also achieve a 100% score in an appropriateness test to demonstrate that they understand the nature of P2P.

In March, Sourced Capital revealed it has developed a loan pipeline of over £12m one month after becoming directly authorised by the FCA.

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