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Unbolted is a new peer-to-peer company that lends against assets. That is not too different than a large number of peer-to-peer companies, but Unbolted is slightly different. There are two types of loans, one secured against assets (in a similar way to Saving Stream and Funding Secure), but the second - which is unique with the peer-to-peer sector - is loans secured against gold and precious metals. As well as security of the asset, Unbolted operate a provision fund for all non-gold and previous metals.
The current lending rates are 10.69% AER (10.5% gross) for standard assets and 8.08% AER (8.0% gross) for gold and precious metals for 6 month loans.
Here is a recent press release which explains Unbolted in more details:
Unbolted lends against assets. These are items that either individuals or small businesses hold that have a resale value. Everyone is familiar with a mortgage against their property and today, more and more people are realising that other items in their possession also have a value that can be borrowed against.
As long as the potential borrower is a UK resident and has an asset with a resale value, the Unbolted P2P site is open for them. Their credit rating is irrelevant as we lend against the asset. The advantage for the borrower is the most they can lose (if they fail to pay back the loan) is the asset that they have provided to Unbolted.
The advantage for the lender is that every loan is backed by actual collateral. That means the lender does not have to depend on Unbolted to assess the credit worthiness of the individual. If you are a potential lender, the only requirement is again to be a UK resident.
Smart investors know the importance of a diversified portfolio. Unbolted’s Autolend is our solution to the diversification of risk for the lender. Of course, Self Selected lending is also available if they want to bid on specific loans.
Therefore, determining the value of the asset to be collateralised is of primary importance. At Unbolted, we work with carefully selected experts to determine if a “secondary” market exists for an asset. The best place to determine the value of an item is through an auction process. As a result, we partner with firms who create or manage an auction process as they have experts who help determine the listing price in the auction. We use their mid-range estimate to determine the value of the asset in question.
Unbolted normally lends up to 70% of the mid-range estimate, and we lend 80% against the actual carat of gold items. We feel this is wise for the borrower and prudent for the lender.
Unbolted uses a simple loan structure and all loans mature in six months unless advised otherwise. All loans are made with standard non-commercial credit agreements.
We designate loans as Gold Loans or Non-Gold Loans prior to committing funds, and all lenders of Gold-Loans become automatic beneficiaries of the Gold Trust (the objective being to ensure that no lender loses money due to a fall in gold prices).
All Non-Gold loans are protected by the Provision Trust. Unbolted transfers 1% of the principal of every loan made, out of its Unbolted own fees to the Provision Trust.
All loans are secured against assets that are held in our possession (or in the possession of one of our authorised partners). As a lender, we will enforce the security and sell it in the event of default. However, we are in the business of lending and do not make a profit on the sale of any asset, and any surplus is returned to the borrower.
In the unlikely event that a borrower fails to pay back their loan, the lender does not necessarily incur a loss. The item, which is under the control of Unbolted for the duration of the loan, is then put up for auction and after the item is sold, the funds received (less the charges for selling it by the third party) are used to pay off the outstanding principal and interest.
Unbolted does not accept any fees until the loan principal has been recovered. We only receive our full fees if the lender receives their full interest and until then, we share in the losses.
The Unbolted P2P platform also guarantees the borrower that his or her loan will be fulfilled.
Unbolted is not dependent on its lenders to determine whether or not it will lend to a borrower.
Unbolted offers some of the best P2P lending rates available anywhere. Currently, Unbolted is offering lenders 10.5% per annum on non-gold loans and 8% per annum on loans against gold.
At Unbolted, we think that the risk profile for our lenders is significantly less than compared with other peer-to-peer platforms. If you are a serious investor and believe in diversification, you should consider Unbolted as part of your portfolio of P2P investments.
As with all other peer-to-peer companies, lending on Unbolted is not covered by the Financial Services Compensation Scheme and capital is at risk.