Assetz Capital: A Review

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There are an increasing number of peer-to-peer lenders appearing on the scene as the main high street banks continue to be less than supportive in providing finance to some small and medium size enterprises (SMEs). Assetz Capital is one such P2P lender and we have examined what they do to write this review which we hope will be helpful.

Who do Assetz Capital lend to? Source

The company comprises two divisions: - Assetz SME Capital that provides loans to SMEs and Assetz Development Capital that provides loans to property developers.

Assetz SME Capital provide secured lending to SMEs that have been trading for at least 2 years including sole traders, partnerships, limited companies and limited liability partnerships.

Assetz Development Capital provides secured lending to established property developers who have been trading for at least 2 years. In addition they provide "lend to let" secured loans to overseas clients wishing to invest in the buy to let property sector in the UK.

How much can you borrow? Source

In the case of Assetz SME Capital a loan must be for a minimum of £25,001 up to a maximum of £1,000,000 although an individual borrower may have a number of loans that collectively may exceed £1,000,000. The fixed rate loan must be repaid within a 5-year period on a capital and interest repayment basis and there is the option of a 12-month capital repayment holiday. There is no penalty for early or partial repayment.

In the case of Assetz Development Capital the minimum loan that is normally on a fixed rate is £250,000 and the maximum is normally £10,000,000 although advances of up to £50,000,000 may be considered with a capital and interest repayment term of up to 2 years. The maximum loan to valuation is typically 50%. Early repayment charges may apply.

For the "lend to let" scheme the minimum loan amount is £25,000 with no maximum. The maximum LTV is 50% with capital and interest repayments over a maximum of 5 years. What can the loan be used for?  Source

In the case of Assetz SME Capital, loans are available to assist in a business's projects and future growth. In the case of Assetz Development Capital the preference is to lend for the purchase of prime property in prime locations. In the case of the "lend to let" scheme the funds are provided towards the purchase of quality buy to let properties.

What security is required? Source

For Assetz SME Capital, all loans are secured. Ideally property/buildings are used but they will also look at a range of other physical or financial assets if the deal makes sense. Even at this early stage their portfolio of done deals has many interesting examples of deal with insurance policies, stock, boats etc as security but the one are they do struggle with is vehicles.

LTVs can go up to 100% on a first or second charge though extra security may be required and this is assessed on a deal by deal basis.

What are the interest rates and charges? Source

Fixed interest rates may be anywhere between 5% to 15% and are dependent upon the level of risk with Assetz SME Capital and Assetz Development Capital. The borrower pays an arrangement fee of between 2% to 5% of the amount lent depending upon the complexity of the case. The borrower is also responsible for any other fees such as security and valuation fees. The lender does not pay a fee. In the case of the "lend to let" scheme the fixed rate of interest is 7% and there is a 3% arrangement fee on the amount lent.

Procedure Source

Assetz Capital's relationship managers meet with the proposed borrower and produce a full credit report that is made available to potential lenders. The prospective borrower's loan requirement is made available at auction enabling multiple potential lenders to bid to provide the finance at a particular rate of interest they each feel is appropriate. The lender(s) offering the lowest interest rates are more likely to be selected.

In the case of Assetz SME Capital the whole process from initial meeting with a relationship manager to the funds being released can take up to one month. In the case of Assetz Development Capital the whole process can take anything up to two months.

Choice Loans is an independent commercial finance broker with experience in raising capital for all types of UK SMEs. If you think peer to peer lending may be useful for your business or you want to talk to someone about alternative sources of finance, please do get in touch. Our number is 0845 1260350 or complete our commercial loan inquiry form.