Funding Circle has just launched its first development loan into the marketplace, following its move into the property loans sector last month.

Within just 24 hours, Funding Circle launched and funded its first development loan. 

The loan, a £400,500 property development in Kent, represents the P2P sensation’s first move into the sector and has proved a hit with its numerous investors.

Speaking on the news, Luke Jooste, Head of Real Estate Finance, said: "The speed at which this large loan was funded shows the appetite out there to lend to these kinds of small businesses. As demand for mortgages increases, the supply of new housing stock becomes more important. We have met with plenty of experienced developers over the last six months, who are not only ready to build in prime locations, but have large amounts of equity to put into deals, yet have struggled to get their projects off the ground via traditional sources of finance. By lending through Funding Circle interested investors will be able to help to fill this housing gap, by delivering finance to many of these property developers in a fast and cost effective way."

The deal was listed as:

•    A+ property development loan in Kent

•    7 per cent fixed rate (before fees)

•    18 month loan term

•    £400,500 loan value (1st staged drawdown)

•    45 per cent Loan to value (Based on completed project value)

•    8 x 3 bedroom houses to be built 

•    Borrower has reported track record of over 40 years developing property schemes in the local area 

•    First charge security on the property

•    The monthly repayments will consist of interest payments only, with the principal and any interest due paid back at the end of the loan term

•    Cashback at 2 per cent for investors

Just weeks ago, Funding Circle completed a £265,000 loan to kick-start its move into the property finance sector.

The “Property Investment in Surrey” deal was an A+ risk band with a first charge secured on the property. The partnership that was seeking a loan has owned and let the property for 54 years.

The owners needed £265,200 to refinance a bank loan and release £64,000 in equity.