What is the risk with marketplace finance

The alternative finance sector is disrupting traditional finance

Marketplace lending, also known as crowdfunding, non-bank, and peer-to-peer lending (P2P), is an alternative to traditional financing options.

Marketplace lending is a compelling proposition for borrowers and investors. The sector grew rapidly in the wake of the financial crisis, driven by a combination of banks restricting lending and the rapid development of the underlying financial technology. This enables efficient matching of lender and borrower and tracking of their loans.

CrowdProperty specialises in marketplace lending specifically for property projects, matching borrowers (SME property developers) and wholesale investors to fund property project loans via a purpose-built, specialised technology platform.

In an environment of low interest rates for cash savings, and although less secure than straightforward cash savings, marketplace lending like CrowdProperty has the potential to offer wholesale and professional investors — investors who are aware of the risks* — better target interest returns than some traditional options. This can happen through fundamental efficiencies:

  • Removing inefficiency from the market — putting borrowers and lenders together (taking out the middlemen) 
  • Lowering overheads by not requiring branch networks, real estate, legacy IT systems, plus all the other operating costs
  • Pooling investments to make them work harder and generate higher returns — usually only available to institutions

That’s also why marketplaces combine arguably more attractive lender rates without eye-watering repayment rates and fees for their borrowers, making it more attractive to property developers.

The advantage of marketplace lending to investors is that the loan can be secured by first mortgage against residential property. This protects investors’ capital and interest as CrowdProperty can step in and take control of the asset if a loan defaults.

CrowdProperty offers up to 7% p.a. target interest returns* on first mortgage secured loans.

Your next steps

Register with CrowdProperty or get in touch with questions.

 

*Target returns, not forecast returns. For wholesale investors only. Terms, conditions and risks apply.

DISCLAIMER

The CrowdProperty Investment Trust (the Trust) is an unregistered managed investment scheme. The Trust is only available to investors that are wholesale clients as defined in s761G of the Corporations Act 2001 (Cth).

Investors pledge their funds in the Trust which makes first mortgage secured loans to SME property developers.

Withdrawals can only be made when the Investor funds are in Cash Interests in the Trust. Refer to the Information Memorandum (IM) for more information.

CrowdProperty Pty Ltd (ACN 633 516 195) is the investment manager of the Trust (Investment Manager). The Investment Manager is a corporate authorised representative (No. 001285637) of Quay Wholesale Fund Services Pty Ltd AFSL No. 528 526, ACN 647 044 602. The Investment Manager's authority under its Corporate Authorised Representative Agreement with Quay Wholesale Fund Services Pty Ltd is limited to general product advice regarding the Trust only. Quay Wholesale Fund Services Pty Ltd is the trustee of the Trust and the issuer of its IM (Trustee).

The contents of this document are not intended as financial product advice and have been prepared without taking into account your personal circumstances, investment objectives or particular needs. You should read the Information Memorandum for the Trust in full to consider whether an investment is appropriate for you.

Neither the Investment Manager, Quay Wholesale Fund Services Pty Ltd, nor the Trustee guarantee the repayment of capital, the performance of any investment or the rate of return for the Trust. Past performance is not necessarily indicative of future performance. An investment in the Trust is not a bank deposit and is subject to greater risk than cash investment products including loans of income and part or all of the capital itself.

We strongly suggest that you seek your own professional financial or legal advice prior to any investment decisions.


09 Jun 2021

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