During this month’s installment of “Did you know” by P2P lender Blend Network, they’re sharing some of the “secrets” of their due diligence and underwriting process so that you get to know more about the processes they go through to “ensure that you and hundreds of lenders like you can access the best property-secured loans.”
Blend Network writes in a blog post that their lending team of property professionals, led by Registered Chartered Surveyor Paul Watson, are responsible for sourcing property loans “with an attractive risk/reward and carrying out an in-depth due diligence process on the loan and on the borrower before agreeing to lend.”
Blend Network’s credit team carries out a solid appraisal of each initiative, which reportedly includes checking the following: the project itself, its location, overall costs, comparables, estimated profit, and the profile of the borrower. Blend Network also looks at experience, the track record, and tries to determine whether the borrower can deliver on this project.
The company also checks up on KYC/AML, credit checks, and the exit. Other factors taken into consideration include liquidity, the decision to refinance or sell, as well as an independent due diligence, RICS Valuation, and other related items like solicitors/monitoring.
As noted by Blend Network:
“Our team’s motto is ‘if we don’t understand the risk, we don’t lend’. This attitude has allowed us to build an enviable track-record: we have delivered an average of 10.01% return p.a. since we funded our first loan in mid-2017 to date as of today, 1 September, and have never lost a penny of investor money.”
You may check out Blend Network’s portfolio performance in the stats section of their platform here: www.blendnetwork.com/pages/statistics.
As mentioned in the update from the UK-based lender:
“We have a wide range of lenders, from retail investors investing from £1,000, to sophisticated professional investors, High Net Worth Investors, family offices and institutional investors. So, whether you are investing only £1,000 or £100,000, we hope that next time you see a loan listed on Blend Network, you will be even more confident about the level of due diligence and assessment that’s gone into the deal and to ensure an attractive risk/reward is achieved.”
Blend Network also noted that the above 10.01% figure “refers to the past and past performance is not a reliable indicator of future results.”
P2P lending is not covered by the Financial Services Compensation Scheme and investments are “illiquid (the inability to sell assets quickly or without substantial loss in value),” the Blend Network team clarified.