Lender eyes up £250m loan book

 After launching the industry’s first crowd-funding buy-to-let proposition, Assetz Capital has opened up funding for many would-be landlords who had struggled to secure the appropriate finance. Laurence Havelock sat down with Stuart Law, CEO at Assetz, to find out more about the firm’s property funding proposition…

Assetz Capital is a peer-to-peer lending platform which connects a large community of private investors with SMEs, property developers and buy-to-let investors who need funding for a variety of projects.

The firm’s property financing arm will consider financing projects which need between £300,000 and £1 million, whether as a senior debt in a “cost to complete” capacity or as mezzanine finance for a larger scale project.

The Development Capital part of Assets is headed by Managing Director David Penston, an ex-Board Director at Singer & Friedlander and industry professional with insurmountable experience.

A further division – Assetz SME capital – provides business funding on three- or five-year terms, including asset finance.

The platform attracts individual investments of, on average, £50,000 from investors, who are often high net worth individuals looking for a lucrative investment opportunity.

All in all, it is estimated that there are 60,000 peer-to-peer funders of this stature who could provide a £1 billion pot of funding to businesses, developers and landlords in the UK.

Speaking about Assetz’s unique position in the marketplace, Stuart Law said: “We’re cutting out the banks - which is the name of the alternative finance game – and joining up private lenders with businesses and property developers by acting as loan agent. We’re glad to offer a full proposition – ranging from buy-to-let mortgages, senior development debt, mezzanine development finance, trade finance and business term loans.

“Like many alternative lenders, we are seeing an exponential level of growth at present. We’re planning to achieve a lending book of £25 - £30 million minimum by the end of the year, and of £250 million by the close of 2014.”

Stuart told us about one landmark case in particular which is still considered the single largest peer-funded loan, enabled in part by the largest ever bid made on a peer-to-peer platform.

Assetz provided the platform to source a £1.5 million development loan to facilitate a project at Nottingham University. Though foundations had been put down on all of the many planned buildings on the developer-owned site, the large sum raised, including a £350,000 stake from one investor, allowed the undertaking to progress to completion.

Assetz is headed as a whole by non-executive Chairman Paul Moore, better known as the HBOS “whistleblower” after he warned the bank’s senior management that they were taking excessive risks and was in danger of collapse, ahead of his dismissal from the institution’s financial risk management division in 2004.

Moreover, much of Assetz’s team is made up of former bankers, though the company’s ethos draws it away from the pitfalls of High Street lending.

Solutions are tailored to borrowers, complete with additions such as interest only extensions, bullet repayments and longer amortisation terms should they be required.

The peer-to-peer funder also maintains that the availability of numerous investors acts as a sort of double security – Assetz assess an emergency exit price point based on a careful examination of the current investor market.

Stuart added that it was this responsible outlook that set his firm apart. He said: “Though we are currently made up of many highly experienced bank personnel, we don’t lend merely on whether the computer says yes or no. Instead we have gone back to the roots of banking, of knowing your customer, taking tangible and appropriate security and ensuring that the loan is affordable.

“At the same time, however, we are planning on attaining a banking license in due course, which will allow us to take deposits and grant us a degree of leverage but without the investment bank bolted on that brought down the banking system a few years ago.”

He concluded: “The High Street Banks aren’t coming back – the modern lending landscape is all about alternative lenders and how we are uniquely positioned to help borrowers grow by achieving huge growth ourselves.”