Last post: Jul 28, 2013
Peer-to-peer lenders continue to grow in numbers due, in part, to the major high street banks not appearing particularly keen to provide loans to businesses both large and small.
Peer-to-peer lenders continue to grow in numbers due, in part, to the major high street banks not appearing particularly keen to provide loans to businesses both large and small. Any source of alternative financing is potentially beneficial to a business as long as the terms and conditions are reasonable.
Over the years, Choice Loans, an independent broker, has built up an excellent working relationship with numerous lenders and is extremely knowledgeable about the lending schemes on offer. That also includes peer-to-peer lenders enabling Choice Loans to match most businesses lending requirements.
We like to keep our customers up to date with new lending schemes and, therefore, are providing details about a new peer-to-peer lender called Relendex that was launched earlier this year. The name stands for Real Estate Lending Exchange.
Who do Relendex lend funds to?
Loans are made available to commercial property owners who rent out business premises such as office and industrial premises, leisure premises, shops and residential letting premises. Loans can be made available either for new purchases or re-financing.
How much can you borrow?
Loans are available for between £500,000 to £25 million and are repayable over a 3 to 5 year period. Most fixed rate loans are on an interest only basis although it may be possible to arrange a capital and interest repayment loan. A penalty is payable for early repayment.
On a Senior Loan the maximum loan to valuation is 70% and on a Mezzanine Loan it is between 10% to 20%.
What are the Interest rates and charges?
As an indication, you could expect to pay between 6% to 11% per annum for a Senior Loan and 10% to 20% for a Mezzanine Loan.
An arrangement fee of typically 2% is paid by the borrower and Relendex charges the lender about 1% that is taken from the interest charged. There are also legal and valuation fees payable.
What Security is required?
Source Security would be in the form of a first legal mortgage over the commercial premises that is producing rental income.
Procedure
The expert lending team at Relendex evaluate a potential borrower's loan application that, if approved, is made available on their online lending exchange for prospective lenders to bid for parts of the loan amount in a live auction.
There are two types of auction: -
Dynamic Auction – the bidders offer to lend the money at a rate of interest(s) and the borrower will choose the lowest rate(s).
Set Rate Auction – the interest rate is set at the start of the auction and the lenders decide how much they are prepared to lend at that rate.
Once there are sufficient lenders to meet the loan amount and/or the auction closes and the lenders are chosen solicitors are instructed to complete the formalities prior to the funds being advanced.
How do I apply?
If as a result of this Relendex review you wish to make some further inquiries please feel free to contact one of our advisors here at Choice Loans on 0845 1260350 or complete our Commercial Loan inquiry form and we will call you back.
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