7 Reasons to Change the Way You Invest
Whether you’re an experienced investor looking to diversify your investment portfolio, or an everyday saver looking for other ways to grow your money, there’s a new peer-to-peer lending platform on the market that provides you with a unique way to invest.
Loanpad offers a ground-breaking hybrid lending model that combines the most attractive features of pure P2P lending with the best of balance sheet lending. As an investor-centric business, Loanpad focuses on making lower-risk, secured lending accessible to smaller investors.
The platform is not only geared towards safety and security, but also simplicity and efficiency. Loanpad is as easy to use as a bank account, yet investors earn higher interest rates compared with traditional savings accounts albeit with a higher degree of risk, thanks to the platform’s innovative lending model.
Here are seven reasons to invest with Loanpad – and change the way you think about investing:
1. A P2P platform with ‘skin in the game’
Loanpad does not originate loans directly. Rather, it partners with established property lenders (lending partners) that originate the loans and share a portion of these loans with the investors on the Loanpad platform.
Like pure P2P models, Loanpad is a matchmaker and does not lend any of its own money. However, the lending partners fund at least 25% of any loan. This means, there’s always ‘skin in the game’, protecting you as an investor on the platform.
2. Greater security than a typical loan
Loanpad converts each loan into two entirely different risk classes: a lower risk senior part and a higher risk/return junior part. This unique lending model aims to offer greater security than a typical P2P loan. As a Loanpad investor, you are only funding the lower risk senior part, while the lending partners fund the junior part and retain the first loss position. This means they stand to lose capital before you do.
3. Both the chance and impact of loss are minimised
While any investment carries a certain degree of risk, Loanpad’s lower risk senior tranche structure has been designed to minimise the chances of any loss. Should such a loss occur, the platform also aims to minimise the impact of this loss, by diversifying your investment across the entire performing loanbook daily.
4. Loan transparency
The platform provides investors with the ability to check every loan, as well as data relevant to the overall loanbook. This means you’re making an informed choice to be invested with Loanpad every day.
5. Direct borrower/lender relationship
To maintain a simple, efficient and risk-controlled structure, Loanpad ensures that you have a direct lending relationship with the borrowers, rather than a contract entitling you to the proceeds of the loan. You never lend to Loanpad or its lending partners.
6. Layers of due diligence
All loans are first evaluated by Loanpad’s lending partners, who conduct a full pack of due diligence as thoroughly as you’d expect from a specialist lending business with ‘skin in the game’.
With the aim of only listing the most appropriate loans for investment, Loanpad then conducts its own thorough due diligence, including extensive checks against all end-borrowers to review items such as:
- previous history;
- experience and activity;
- assets and liabilities (including net assets);
- the fit between the borrower and loan in terms of suitability; and
- whether they have sufficient means to repay the loan within the time permitted.
All security is then independently checked by surveyors and solicitors.
7. An investor-focused business model
Loanpad’s business model is focused on providing investors with access to a premier lending experience. Loanpad earns revenue from a margin between the rates paid by borrowers and the rates paid to investors. This margin acts as Loanpad’s fee, which means that the platform’s income – and best interests – are aligned with yours, as an investor.
Are you ready to change the way you invest? Chat to us for more information [here] or [sign up] now.
