Our simple explanation of how to borrow and how to lend is mercifully free of re-hashed Shakespeare. Here’s the introduction to our guide to borrowing. Lenders looking for good returns on capital via our platform should visit the Lend page, or see News, where we will be dealing with this topic tomorrow.
“Only after your borrowing company has been credit-rated can it appear on the Money&Co. platform. Our credit-analysis algorithm, and the scrutiny of our team of analysts will result in a rating that can range from A+ for the most creditworthy company, through A, B+, B and C+, with C+ being the riskiest category. We believe our rating system is the most conservative and risk-averse in the P2P arena.
“The loan, once it’s been executed, is directly between your company and the lenders in the “crowd”. We collect up the monthly payments the borrower makes and distribute them to all the lenders, using a sophisticated digital administration system that took 100 man-years to create.
“When you borrow money you’re staking your reputation, the goodwill of your business, and its main assets. Loans from Money&Co. lenders will always be secured by a debenture over the assets of the business. In some cases, borrowers may be asked to give personal guarantees for loans. You may also want to offer security over land and buildings if it is available, as this may improve your risk rating and make lenders more comfortable lending to you.”
Loan Latest & Risk
Our latest loan offering is an A-rated loan of over £455,000. The borrower is an independent adviser looking to use the funds to expand. The loan auction closes in 11 days’ time. The offering is in strong demand and, at the time of writing, is 67 per cent funded, with a current indicative gross yield of 8.5 per cent.
Our loans are only offered if our borrowers are free of all other debt, and have a track record of sustained profit. Moreover, Money&Co. takes a charge on the assets of the company, which is exercisable if a borrower defaults. The relevant assets could then be sold and used to reimburse lenders. As yet, after two years’ trading, no borrowers are in default. See our recent article on Money&Co.’s conservative attitude to vetting deals.
That said, remember that when lending, capital is at risk. See warnings on Home, Lend and FAQ pages.