A new peer-to-peer lender has introduced its first loan product, hoping to change the way people invest.
Crowdstacker will allegedly be one of the first peer-to-peer platforms to provide retail investors the chance to lend money to non-listed yet established, mid-sized and financially stable companies.
Peer-to-Peer Lender Introduces First Loan
Crowdstacker will fill the gap for larger ticket funding of up to £50m, which is sought by businesses with strong trading track records and a proven ability to provide a strong return on investment (ROI), but which find it difficult to secure lending due to stricter terms by banks after the global financial crisis.
Its first product, The Quanta Loans, has been created for Quanta Group, a nationwide property investment firm that buys run down homes, renovates and resells them. Quanta has bought and sold over 500 properties in the UK and plans to use the target £3m to purchase some of the five to ten high quality properties that they currently have to turn down every month.
Investors can lend anything from £700 and are offered a 6.8% return per year over the three-year term of the product. Interest is paid in quarterly instalments. Houses and flats bought with the money will be refurbished and quickly sold, in an attempt to ensure changes in the buy-to-let market do not affect the investment.
CEO of Crowdstacker, Karteek Patel, says: “We see Crowdstacker as the democratisation of higher calibre investment options.
“We know from our research that the average man or woman on the street isn’t yet engaging with investment opportunities such as crowdfunding because they don’t know what it is, or they are put off by not knowing exactly where their money will be spent.”
Patel continues: “The average consumer investor is also put off other sophisticated and less risky investments such as bonds or equities, outside of their standard pensions or managed ISA funds, because they don’t understand how they work or they don’t have the higher sums of money typically required.
“Crowdstacker aims to bridge this gap. We’re offering crowdfunding style simplicity combined with quality investment opportunities; we’ll only work with businesses that have passed our stringent due diligence tests.
“Quanta was deemed eligible to be one of the select products we will be offering because of its solid track record in its industry, plus the ability to provide further protection for lenders by using the properties purchased as collateral against the loaned capital.”1