World’s largest P2P loan completed
· £4.1m loan to develop 110 flats in South London is biggest ever
· Over 300 investors to get 12% rate of return over 12 months
The world’s biggest peer-to-peer loan has been completed for £4.12m, it was announced today.
LendInvest, a peer-to-peer mortgage lending platform that lends to businesses secured against property, has provided the loan to a property developer to fund the acquisition of two adjoining commercial buildings in Croydon, South London.
The buildings have permitted development to turn the buildings into a 110 new residential units.
LendInvest, which was spun out of Montello Bridging Finance last year, has completed over £25m worth of loans since being established in May 2013.
Lenders will get a 12% rate of return – far higher than that offered by other well-known p2p companies – and will receive their money back within 12 months. The loan was provided by over 300 investors who provided sums from £10,000.
LendInvest now has almost a thousand investors that are participating in loans with amounts ranging from £10,000 to their largest investor who has put in £1.6m, with the average amount invested being £80,000.
The Croydon deal will help increase the supply of affordable housing in London and the regeneration of the Croydon area as the flats, due to be sold off-plan, will be priced between £200,000 and £250,000.
The developer in this transaction turned to LendInvest after they couldn’t secure finance in time from traditional lenders, illustrating the scale and flexibility of LendInvest when SMEs require funding.
Since being established LendInvest has paid lenders an average rate of return of 10.4%. Lenders are vastly diversified – from small institutions to professional investors to mums and dads
Ben Gilbert, an ex-City trader from London, has been an active investor on the LendInvest platform. He said: “Having had difficult experiences with banks, I know that it can be difficult to borrow money. Even when the chance of the lender losing money is low, borrowers sometimes just don’t fit one of the lenders’ tick boxes. LendInvest is making it more possible for more people to borrow.
“At first, I was quite sceptical. Given my financial background, my assumption is prices reflect risk – so, if a deal offers a high interest rate, the risks are too high. But I’ve become confident there are some good opportunities in the space with LendInvest.”
Christian Faes, co-founder of LendInvest, said: “This is big moment for the bourgeoning p2p industry, which is increasingly becoming a credible mainstream asset class for investors, as well as a source of funding for SMEs.
“Investors will secure a great rate of return and London will also benefit from an increasing amount of affordable housing. This deal is a real shot in the arm for the British alternative finance sector, which is fast emerging as a world leader.”
LendInvest has access to substantial deal-flow through its existing lending business, and has a proven track record of lending without losing investor’s money.
It is also the only specialist peer-to-peer platform specifically focussed on residential and commercial mortgage lending.
According to a report into the alternative finance sector, p2p finance has experienced huge growth in the last few years. £480m was raised through peer-to-peer lending in the UK last year, with a substantial portion of this funding going to SME businesses.
