P2P platform LendInvest has introduced a new product on their investment crowdfunding site. Tranche Loans will be a new way for participants to choose their preferred level of risk and return they would like to achieve.
LendInvest prides themselves on their high quality products and due diligence. All loans are underwritten with their normal process and the lower tranches still meet their high standards. The only difference is in the occurrence of a default – where a Tranche A investor is paid prior to a lower level, Tranche B, participant.
LendInvest is considering offering products for those who are willing to shoulder a higher degree of risk. They also hope to be able to benefit the mainstream borrowers by being able to offer a lower cost blended rate.
None of this impacts the risk profile regarding their current loan book. They intend on gradually introducing these new products when they are satisfied there is sufficient demand.
Apparently they are working on additional financial products and hope to be offering new asset types in the very near future as their business expands. LendInvest also stated they intend on reducing their margins as volume levels increase.
Since launch, LendInvest has completed over £26 million in loans secured against over £38 million in real estate assets.
Update: LendInvest has completed their first Tranche Loan for a property in Croydon in the amount of £365,250. The financial vehicle was a short term bridge loan with a duration of 9 months. Tranche A was for £200,000 and a net return of 0.7% per month. The Tranche B was f0r £165,250 at a net return of 1% per month
Co-Founder, Christian Faes, stated:
“This is another first for LendInvest, as we continue to show our ability to innovate and provide investors with the best investment solution.”