Folk2Folk offer mortgages on non-residential property

February 19th, 2013
Folk2Folk

A new peer-to-peer company, Folk2Folk, has launched that offers secured loans on non-residential property to individuals and businesses in the South West (Cornwall and West Devon).  They are targetting individuals who are able to lend £25,000 and above (which matches Mayfair Bridging who offer short term bridging loans).

Some examples of loans could be for:

  • Residential Buy to Let
  • Holiday Homes
  • Commercial or industrial premises
  • Farms
  • Agricultural land

 Here is a copy of their statement on their newsroom:

February sees the launch of Folk2Folk, a peer-to-peer platform that has been set up by the partners of a long established law firm in Cornwall.  Folk2Folk provides local, fast secured lending by putting those that wish to lend and obtain a decent return in touch with those that wish to borrow on flexible interest only terms.

Folk2Folk can provide access to finance within seven to ten days provided borrowers can provide suitable security in the way of a first legal charge over property (other than a borrower’s home).

Unlike other peer-to-peer platforms, Folk2Folk is asking for minimum sums of £25,000 (no maximum amount) from investors/lenders.  Lenders seem very happy to advance significant funds on the basis that their investment is protected by a first ranking legal charge.

As with other peer-to-peer lending platforms, borrowers have been very carefully selected and Folk2Folk is taking steps to verify that borrowers’ properties are suitable security.

Where banks may take months to process a secured loan, Folk2Folk can turn this around within seven to ten days.

Interestingly, Folk2Folk also offers “a local touch” in both having premises (as well as a full web platform) and drawing upon a significant amount of local knowledge as part of their vetting process.

For investors interested in this secured lending platform or for borrowers who are able to put forward suitable property and wish to obtain fast and flexible borrowing, please visit www.folk-folk.com where more details can be found.

We will be adding Folk2Folk to the list of peer-to-peer companies as soon as we can.

 

Squirrl.com to expand

February 19th, 2013
Squirrl.com

The peer-to-business company Squirrl.com are looking at expanding their portfolio by offering loans to other companies.  Currently Squirrl.com only arrange loans for The Danwood Group Ltd.

Here is their full statement:

Having looked at the feedback we have received from lenders and discussions with a variety of businesses we have made a few tweaks to the model we operated last year.  We are busy meeting with new suppliers in a variety of industries and funding options, and working with them to develop what we believe are some very attractive opportunities for lenders, with loan terms from just 3 months to 5 years, good rates of return and all investment grade or equivalent in risk rating. We will contact you again with further details in the coming weeks.

Squirrl.com offer loans secured on assets and supply agreements, and to date have not experienced any late payments or defaults.  We look forward to these changes with interest.

ReBuildingSociety arranges first loans

February 19th, 2013
ReBuildingSociety

The peer-to-business company ReBuildingSociety have successfully arranged their first two loans for £55k with lenders rates ranging from 6% to 15% per annum.

Daniel Rajkumar, the founder of ReBuildingSociety stated:

We’re delighted to have facilitated these two loans.  Our proposition is simple – through our platform we connect profitable businesses that want a loan with individuals who want to earn a good rate of return on their capital by lending as part of a crowd.

Borrowers are UK businesses of all sizes.  Their biggest barrier to growth is finance, but with alternative sources like rebuildingsociety.com emerging, there is no reason why well-run businesses should have their growth plans curbed.

ReBuildingSociety currently has six businesses looking for funds at the moment, with requests totalling nearly £250,000.  Lenders on other sites looking for better rates should not overlook ReBuildingSociety.

Where should P2P newcomers begin?

February 17th, 2013

This week’s TV coverage of peer to peer lending will spark off a whole new wave of interest in P2P platforms – or at least it will if the visitor stats on this website are a good barometer for public interest.

That got me thinking about the best way for newcomers to enter the market and begin investing.  In essence, most platforms offer three entry routes to investment:

  • The main auction site where new loans are listed
  • An autobid function which lets you set investment criteria for the “system to follow” and bid on your behalf
  • Some type of secondary market

For FundingKnight and other peer to business lenders who only offer loans to business, the secondary market typically lets investors sell loan parts (their investments) on to other investors – sometimes at a discount, sometimes at a premium.

If you like, P2P loan exchanges are a bit like the “buy it now” function on e-bay – instead of the thrill (and potential pain) of bidding in an auction, you can simply enter and exit the market, knowing exactly what you are buying and exactly what price you are paying.

That’s good for existing P2P investors because it creates liquidity – or access to cash.  If you need access to the money you’ve invested in peer to peer lending, the loan exchange is your route to getting it, quickly.  Some exchanges (FundingKnight is one example) even let you sell on part of an investment, which is far easier than having to sell more than you really need to.

But loan exchanges are also great for newbies.  Just as my mother would be far more comfortable using “buy it now” on e-bay, newcomers might well be better off starting their P2P lending experience on the exchanges.

Why?

I think there are 3 main reasons:

You can start earning interest immediately

The loan parts listed on a loan exchange are live loans that are already up and running so as soon as you invest you start earning interest.

If you compare this to leaving your cash sat in an auction for days while you wait to find out if your bid has been successful, it starts to seem quite appealing – for you sanity as well as your financial health!

You can spread your investment more quickly

Most experienced investors agree that a sound P2P investment strategy relies on spreading your money out across as many loans as possible – diversification, in other words, just like any other investment strategy.

In the US, Lending Club regularly shout about their 800 club whose members – who have investments in at least 800 different loans – have never lost money.  That’s a great proof of concept to support diversification, but how long does it take to bid in 800 auctions. 

Using a loan exchange where you can quickly pick up new loan parts for your portfolio has the potential to be a far more productive use of your time.

You can be “in and out” quicker

As with the point about earning interest immediately, these loans are already running, giving investors the chance to buy up loan parts at an agreed rate of interest, knowing that there are only 6 months, for example, left to run on the loan.

Of course, a lot of the fun in peer to peer lending comes from the auctions.  There are lots of people who enjoy playing the game and “winning” and that’s great – we need more participation in our financial system – but for the everyday saver who simply wants a better home for their money without having to sit in front of a computer each night, a loan exchange might well be a good idea.

This post was written by Hazel McHugh who works for FundingKnight, a peer to business lender who arranges crowdlending for businesses.  It free to register at www.fundingknight.com and investing in fee free for lenders.

News coverage of P2P lending

February 16th, 2013

This week there has been some good coverage of peer-to-peer lending on the BBC's The One Show (after 23m 15s) which resulted is a massive 6000% increase in hourly hits on the P2P money site.  Funding Circle confirmed to P2P Money they experienced record traffic for this time.

The vast majority of coverage is from the perspective of the lender, but we should also not forget that peer-to-peer lending requires borrowers.  The rates borrowers can achieve with peer-to-peer lending are market leading for certain loan sizes, so borrowers can get a great deal.