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Default clauses within the loan facility documentation issued to borrowers are extensive and cover a whole range of potential events, varying in severity. These can range from technical defaults such as annual accounts not being provided within the stipulated timescales, to payment default or, more seriously for example, the facility not being repaid by the expiry date which could potentially result in a loss of lender capital or interest for lenders (a potential bad debt).
Should there be an event of default, the severity, including the coverage of the loan against the security, will be considered when deciding upon the most appropriate course of action. Available actions may include; issuing a permanent waiver (e.g. Invest & Fund accepting that whilst a breach of the original terms has taken place it is appropriate in the circumstances to waive that term), or a formal default being called which could ultimately lead to a demand for repayment and recovery action, should the event of default not be satisfactorily addressed following an appropriate period of forbearance. Therefore, an event of default will not always lead to a bad debt and the severity of the event and the level of security cover held both need to be taken into account in determining an appropriate course of action.
The shortest loan that may be offered on the platform is 6 months and the longest that may be offered is 36 months, in monthly increments.
Part or all of a loan may be offered for resale to other Invest & Fund members after the first repayment has been received, via the Resale Marketplace. This secondary market allows previously funded loans to be offered at a premium of up to +10% or a discount of up to -10% and provides Lenders with liquidity if a resale is achieved.
The minimum bid on a loan on the Lending Marketplace is £500.
On the Resale Marketplace, the minimum bid is £25. If a loan is offered for resale that is lower than £25, then the full amount must be purchased.
Lenders wishing to lend over £2,500 in any single Borrower auction will be asked to accept an additional term that points out the inherent risk associated with larger amounts.
There is no maximum bid on either marketplace.
We accept deposits via internet banking or bank transfers (e.g. BACS or CHAPS).
Please refer to your ‘My Account’ page for full details.
If for any reason you have a complaint or concern concerning the operation of the service please contact us by email at email@example.com with brief details of your complaint and your account number. We have a written complaints procedure which can be viewed here.
Subject to certain criteria being met, lending may be possible through a Lender’s SIPP(Self Invested Personal Pension) or SSAS(Small Self Administered Scheme). We will liaise with your SIPP/SSAS provider if this is of interest to you. Please contact us for more information.
In the 2015 Summer Budget, the Innovative Finance ISA was announced. As of April 2016, this means that Lenders will be able to lend through their ISAs via P2P platforms such as ours. Only P2P loans on platforms operated by firms with full authorisation from the FCA are eligible investments for the Innovative Finance ISA. We are looking at the possibility of introducing such a facility and will let our Lenders know once we have any details.
Active Capital Employed (ACE) is a live indicator of the % of capital lent through the Invest & Fund marketplace.
To make sure your capital is working for you, the ACE % you see on the 'My Account' page should be as close to 100% as possible.
Invest & Fund is committed to following all applicable laws and regulations to ensure that the firm's business is not used to facilitate money laundering.
The firm employs a risk-based approach and determines the appropriate client due diligence measures to be carried out on Lenders on a risk-sensitive basis, depending on the type of client and the project in question.
We can only accept Lenders that have a residential address in England, Scotland, or Wales, are over 18 and hold a UK bank account. If you are not based in the UK and/or you do not hold a UK bank account, please contact us to discuss the options available to you.
There is no registration fee for Invest & Fund Lenders. Lenders pay 0.75% per annum on outstanding funds lent through our platform. The fee is deducted each time a Borrower repayment is made and the Lender receives funds back into their Invest & Fund account. If you sell a loan on the Resale Marketplace then a one-off fee of 0.25% of the value of the transaction will be payable on the successful sale of the loan.
The gross lending rate is typically in the range of 8.5% to 9.5%, but may be in the range of 8.0% to 10.0% or wider. Interest is normally rolled up and paid at the end of the term, although monthly interest payments are an option which is available to the Borrower.
Deducted from the gross interest received is a facility fee equal to 0.75% per annum of the capital sum lent, i.e. if the capital is lent for 6 months the facility fee would be 0.375% and if the capital was lent for 18 months the fee would be 1.125% of the capital sum lent. Unlike the interest it does not compound, being calculated on a straight-line time basis.
So, for lending via the Lending Marketplace in the gross interest range of 8.5% to 9.5% over a 12-month term the return net of facility fees may reasonably be expected to be between 7.75% to 8.75% per annum. before tax.
Invest & Fund places great emphasis on its credit assessment function, with security and borrowing exposure ratios being at the forefront of its lending criteria. Follow the link to view our current bad debt rates
Returns to lenders are paid without deduction of income tax and it is up to Lenders to account to HMRC for the income tax due. See the FAQ below for more information on tax liabilities.
Invest & Fund accounts for interest paid to Lenders net of its fees, as described above, and without any deduction for income tax.
The onus is on each Lender to properly account for any income tax that may be due to HMRC and to assist with this requirement, the Lender’s account dashboard has a statement of Gross Interest for each tax year ended 5th April. This details the Borrower Name and the amount of interest received for each loan.
In the UK, Lenders are liable for income tax on the interest that they receive, however, interest paid by Invest & Fund to individual Lenders qualifies as part of the tax-free Personal Savings Allowance announced in the 2015 Budget. This is available to basic rate taxpayers, but top-rate taxpayers are not eligible for the allowance. All sources of interest received must be aggregated in determining the Lender’s total interest against which this allowance applies.
Invest & Fund is unable to offer any tax advice to individual Lenders. If you have any further queries we recommend that you should contact your local tax office or an accountant.
Lenders are notified in advance via email if a loan is to be repaid early. For Interest Rolled Up loans, interest accrues daily and is calculated using the actual/365 method. If a loan is fully repaid up to 91 days into the repayment term, then Lenders will generally receive 91 days’ interest back. If the loan is repaid more than 91 days into the repayment term, then Lenders will receive the relevant amount of accrued interest, as of the date of repayment. Interest is paid up to the date on which the settlement funds are received into Invest and Fund Limited Client bank account. However, there may be a delay of up to one working day for the transaction to show in Lenders’ accounts. Please note that the interest rate stated on a loan is a gross annual figure. For term extension loans where an I&F development or bridging loan is redeemed by another I&F loan to the same Borrower then a minimum number of days interest will generally not apply.
Loans purchased by a successful bid on the Lending Marketplace accrue interest from the date that the loan is drawn down by the Borrower. Loans purchased on the Resale Marketplace accrue interest from the date that the loan is acquired by the Lender. In both cases, the actual receipt of this accrued interest is dependent upon the loan type. Where a loan is rolled up, interest is paid either at the end of the term or earlier if the Borrower chooses to repay the full amount before the end of the term. A Lender’s account is credited with the interest attributable to their loan on the day it is received from the Borrower. When interest is paid monthly, the Lender’s account is credited with the interest attributable to their loan on the day it is received from the Borrower as with rolled up interest, but with regular payments on each monthly anniversary since draw down. In all cases, the Lender will be kept informed by email of the Borrower’s intentions should there be any variation to the full term as agreed at the outset or should a repayment less than the full amount of the loan plus accrued interest be offered e.g. where the sale of a development is piecemeal.
Borrowers are required to notify us of any event of default promptly upon becoming aware of it. Events of Default include not making payments on their due date, excluding if the failure is caused only by an administrative or technical error. If a payment is made within 3 business days of its due date, it is not a formal Event of Default. Any failure by a Borrower to comply with conditions set out in the relevant documentation may amount to an Event of Default. Similarly, any misrepresentation made by the Borrower to Invest & Fund may amount to an Event of Default. If a Borrower misses any payments, the Lenders authorise Invest & Fund to act on their behalf and contact the Borrower to attempt to collect the outstanding payment. Invest & Fund will keep the Lenders informed about any progress made and any monies received will be paid to the lenders on a pro rata basis. Invest & Fund may instruct the Security Trustee, I&F Securities Limited to enforce the relevant security documents. Please refer to the FAQ ‘When does Invest & Fund place a loan in default, and why are loans in default assigned to I&F Securities Limited (“IFSL”)?’ and the Terms & Conditions for further details.
You may e-mail us at firstname.lastname@example.org or phone our Customer Helpline on 01424 717564 (9am – 5pm, Mon-Fri). Alternatively, we can be reached through our various social media channels.
We will lend to UK registered companies, LLPs and partnerships with over three partners who are property developers. We consider loan applications for building, buying or re-financing projects on residential developments. We also consider loans for bridging finance.
Invest & Fund was set up in 2012 and is funded privately. Additional funding was obtained in early 2014 and in May 2017 by a share placement.
Invest and Fund Limited is authorised and regulated by the Financial Conduct Authority (FRN: 711378). For further information please visit www.fca.org.uk. Invest and Fund Ltd is not covered by the Financial Services Compensation Scheme. If you have a complaint you may be able to refer it to the Financial Ombudsman Service. Please see our Complaints Policy for further details. Invest and fund Limited (No. 8277803) is a company registered in England and Wales. The registered address is the HCP Building, Chichester Road, Ponswood, St Leonards-On-Sea, East Sussex, TN38 9BG.
The Resale Marketplace enables current Lenders to sell part or all of their loans to other Lenders.
A Lender can decide to sell all or part of one of their current I&F loans at any time, providing that the loan is not in default, using their I&F online account. The process is straightforward:
No. You may personally select which of the available loan(s) you wish to buy. For each loan that is for sale, you may also select whether you wish to purchase some or all of that loan. The minimum amount that can be bought from each loan in one purchase is £25. If a loan is posted that is less than £25, then it must be purchased in full.
The loans that are up for sale are offered either by Lenders or Underwriters. Once the Borrower application has been approved by our Credit Assessment Group for listing, it moves to the Lending Marketplace. Lenders have the opportunity to own a part of the loan from the very beginning by bidding via the Lending Marketplace. Loans that are up for sale on the Resale Marketplace may be currently owned by any Lender that is simply wishing to access their capital and accrued interest from a specific loan early, for a variety of reasons or by an Underwriter who is looking to reduce their holding so that they can underwrite new deals.
The Resale Marketplace is not a reflection of the strength of a loan, and therefore the proportion of a specific Borrower’s loan that is on the Resale Marketplace should not be used to assess the risk of a Borrower. The Resale Marketplace simply provides existing Lenders with liquidity, allowing them to access their capital and accrued interest early if a loan is successfully sold to another Lender.
No, A Selling Lender is not entitled to sell Loan Parts which are in arrears (i.e. a payment of interest or capital has been missed) or which are known by the Selling Lender to be in default.
Subordinated loans are loans which rank behind one or more other loans in 'priority' of repayment and terms, examples include second (or subsequent) charge loans and mezzanine finance, such loans are described as 'junior debt.' If a secured loan is subordinated it means that there is another, pre-existing loan secured against the same property. In such circumstances where a borrower cannot repay and the security is realised, then subordinated lenders will only be able to recover money after higher ranked lenders have been fully repaid, including any interest they are owed.
Lending against subordinated debt increases the risk of loss of capital, and so should only be contemplated by experienced lenders. This is why Invest & Fund only makes such opportunities available to clients who have an FCA Regulatory Status of a Professional Client.
Events of Default include Borrowers not making payments on their due date, excluding if the failure is caused only by an administrative or technical error. If a payment is made by a Borrower within 3 business days of its due date, it is not a formal Event of Default. Any failure to comply with conditions set out in the relevant documentation may amount to an Event of Default. Similarly, any misrepresentation made by the Borrower to Invest & Fund may amount to an Event of Default. In an Event of Default, Invest & Fund may instruct the Security Trustee, IFSL, to also enforce the relevant security documents. Under the Terms & conditions of the Invest & Fund platform, in the event of a default by a Borrower, the Lenders assign their right title and interest in the Loan Contract to IFSL, the associated company of Invest & Fund, specifically set up to deal with defaults and recoveries. It is made up of three independent directors and the Invest & Fund Finance Director, with a mandate to act in the best interests of the Lenders at all times. IFSL then work with Invest & Fund on behalf of all the Lenders to recover any outstanding money due under the loan. The possible remedies available to the Security Trustee include:
Please refer to the Terms & Conditions for further details.
If, when the auction closes, there are not sufficient funds generated to cover the loan and the Invest & Fund Underwriters are not able to make up the shortfall, the drawdown will not complete and the monies pledged by Lenders via the auction will be returned to their Invest & Fund account.
Invest & Fund only places propositions onto the marketplace that we believe will be funded, and to date all of the loans that have been posted on our Lending Marketplace have been successfully funded. However, in the unlikely event that a drawdown request was under-subscribed, or was refused on credit assessment grounds this is likely to require a Borrower to increase their own equity in the project, restructure the drawdown or seek finance elsewhere. All of our loan propositions require Borrower equity to be in place at the outset which means that there should be an equity cushion as the value of the asset is likely to exceed the commitment of our Lenders, however in exceptional circumstances, should this not be adequate, then there are generally guarantees or other security to call upon, but it should be rememebered that Lenders' capital is at risk so repayment is not guaranteed.
Invest & Fund Lenders include High Net Worth Individuals, Family Offices, Funds and Companies who lend via our marketplace and the majority of our Lenders see the loans when details are posted on the Lending Marketplace, but there are exceptions to this. Some of our larger Lenders will only lend if they can take the whole loan; this is because they want to have control of any key decisions and have the security held in their name. This category of Lender is known as a Whole Loan Lender, and details of loan proposals which meet their pre-defined criteria may be provided at an early stage in the application review process, prior to being published on the Lending Marketplace. We also have a category of Lender termed as High Value Part Loan Lenders who are assessed as having the capability of funding either £100k or 25% or more of an individual loan. These Lenders may see a loan before it is posted onto the Lending Marketplace as part of our assessment of ensuring that a loan has a high probability of being funded. Our Underwriters also see loans at an early stage. Underwriters will meet any shortfall between Lender funds and the drawdown amount, but not all loans are underwritten.
If Invest & Fund goes into administration the business would continue to run and the client accounts would be managed by the appointed administrator.
Any monies held in the client account are totally ring-fenced and held for the beneficial interest of the Lenders. We have a third-party ‘lifeboat’ facility in place, to ensure the unbroken continuous operation of the exchange.
Visit www.investandfund.com to see what we have to offer. If you believe Invest & Fund could be the right way for you to raise required funding, simply register as a prospective Borrower and complete the on-line loan application located on your Borrower's homepage. This starts the process and our team are available to help throughout the process.
The minimum amount you may borrow is £250,000, and the largest sum you may borrow is £5 million, but this may be increased in the right circumstances.
Applications from limited companies, partnerships and trusts that are not an individual or relevant person for property development and bridging finance in England and Wales will be considered, however loans involving principal private residences are excluded. Applications are preferred for residential property or a blend of mostly residential with an element of commercial e.g. a shop may be located below a block of flats. First charge security is usually required, second charges only being taken in exceptional circumstances. An equity stake from the Borrower or their associates is a pre-requisite, as a maximum loan to value of 75% shall be applied.
The interest rate may be fixed. If this is the case then the rate is agreed before the loan goes onto the lending marketplace. The Lenders bid at the predetermined rate and it is a ‘first pass the post’ basis.
There is an Arrangement Fee payable equivalent to a percentage of the total amount borrowed, variable with the term over which repayments are to be made (see Fees). This fee shall be deducted from the loan prior to transfer of the funds, i.e. the Borrower shall receive the net amount of the loan, and so you may wish to build this fee into the amount you are seeking to borrow. The Borrower shall pay interest on the loan at the Borrower's rate. Should a Borrower default on a loan repayment, any reasonable costs incurred in debt recovery, shall be recharged to and recovered from the Borrower. All interest rates are calculated on a per annum basis.
Invest & Fund offers monthly terms between 3 and 24 months. Longer terms may be possible upon enquiry.
All loans will to be secured against 1st charge on property. In exceptional circumstances a 2nd charge may be required. Additional security may be required in the form of debentures and/or guarantees in support of the quality of the charge.
Yes, we use one of the country's foremost credit checking companies. We also perform far reaching due diligence on the Borrower, directors and their agents.
Yes, and the agents of the company e.g. solicitors, accountants, surveyors.
Invest & Fund will provide reasonable assistance to help guide you through the process.
The information you disclose is entirely up to you, but remember you are trying to attract Lenders to lend you money. Information must be correct and should not misrepresent the facts.
You should complete the loan request template provided and include all relevant information.
You should also answer the questions posed by Lenders in the Q&A forum.
The bid period lasts for up to 10 days, but the Borrower, at their option, may end the bidding process at any time if the loan requirement has been achieved.
Once the bidding process has concluded, the Borrower has a cooling off period of up to 5 working days, to decide whether to drawdown the funds. This cooling off may be waived in total or in part by the Borrower.
No, you are under no obligation to take the loan, and have five working days from the end of that process to make a firm decision.
Yes, five working days from the end of the bidding process.
Once a bid is made, the Lender is committed to honouring that bid. Money is allocated from the Lender's account to cover the bid, and is only returned to the Lender in the event that the bid has been bettered, or the Borrower has failed to attract the required amount or has declined to drawdown the monies.
Invest & Fund has been created to provide finance for property companies looking for bridging and development finance in the residential market. Other types of property finance may be considered.
The Lenders are individuals, institutions and companies who understand the difficulties small and medium sized property companies have raising funds in today's financial environment, and want to help businesses such as yours grow and prosper, whilst getting a real return on their money above inflation, unavailable from traditional financial institutions.
This should not ordinarily happen, and there is no reason a Lender would need to see you unless by mutually agreed prior appointment. Your business address is in the public domain, however under the terms and conditions of registration accepted by the Lender, they have agreed not to visit the Borrower without prior appointment.
You should notify Invest & Fund immediately if you believe a repayment will not be met, together with your proposals to bring any arrears up to date, and what your intentions are going forward. Invest & Fund retain a professional firm of debt management and recovery consultants who will monitor your situation and will put in place the necessary procedures to ensure compliance with the Terms & Conditions you have agreed to.
You may repay the balance of the loan and accrued interest at any time during the term without penalty or charges, although this is generally subject to a minimum interest equivalent to 91 days accrued. Your Facility Agreement will be explicit on this point.
You may apply for additional funds at any time following an initial six-month period of unblemished repayments.
Details of your existing loan(s) will be disclosed and it is for potential Lenders to determine whether they would be willing to lend further monies and at what rate. Currently the minimum amount you may borrow is £250,000, and the largest sum you may borrow is £5 million but this may be increased in the right circumstances.
You may be both a Borrower and a Lender. You will need to register separately as both, and undergo the different checks that are in place for both distinct parties.
Repayments are made by simple standing order on set days each month throughout the term of the loan. These single fixed monthly payments are made to the Invest & Fund clients' account, who will administer the apportionment between the Lenders on your behalf.
Loans that have rolled up interest are payable as capital and total interest at the end of the term. You will be advised a settlement figure during or at the end of the term as applicable.
The Q & A blog is open throughout the term of the loan, although activity is expected to be minimal after drawdown. You can post news of your business on your pitch page at any time. How much more you wish to interact with Lenders is at your own discretion.
No, there is not. If monthly repayments form part of your loan then you will need to put in place the necessary payment instructions.
For property development loans you will need to submit utilisation requests, and any supporting information, in good time when you are seeking to obtain a stage drawdown against the agreed facility.
If a Borrower fails to make payments on time (or in whole), or is otherwise in breach of any term of the Loan Contract, Invest & Fund may place the company “In Default”. The effect of this is that the loan is terminated and the entire outstanding amount owed (including all interest to the end of the term plus costs of recovery) is immediately due and payable. When a loan is placed “In Default”, the Lenders are informed (on the Lender dashboard) that their loan contracts will be assigned to IFSL. IFSL is an entity, independent of Invest & Fund, that has been set up to act in the best interests of the Lenders and manage the default the process. Assignment enables IFSL to “step into the shoes” of the Lenders, which makes it easier for Invest & Fund to negotiate with the Borrower (and any guarantor), and to take steps to enforce the security.
Invest & Fund does not lend from its own balance sheet. Loans will be fully funded if the Invest & Fund Lenders find the Property Developer and the proposed Project to be compelling enough to lend against. Our loans are funded by our diverse, deep and growing population of Lenders – mainly consisting of High Net Worth (HNW) individuals, family offices, wealth managers and other institutions. Invest & Fund also has Underwriters who may be willing to step in to make up any shortfall between the amount requested by the Borrower and the amount offered by the Lenders, but underwriting is not always available. So, whilst Invest & Fund cannot guarantee that all loans will be fully funded, Borrowers are able to take comfort that all of the loans that have been posted on our Lending Marketplace to date have raised all of the funds requested by the Borrower.
Invest & Fund only places propositions onto the marketplace that we believe will be funded, and to date all of the loans that have been posted on our Lending Marketplace have been successfully funded. However, in the unlikely event that a subsequent drawdown is not fully subscribed, this is likely to require a Borrower to increase their own equity in the project, restructure the drawdown or seek an alternative source of finance.
Loans and drawdowns will not go ahead if Invest & Fund’s Head of Credit does not give his approval. The Head of Credit sees loans from an early stage so will already be familiar with a loan prior to reviewing for final sign-off. The Head of Credit may ask for additional information or evidence to mitigate a specific concern, but if a development is not progressing as it should do or places our Lenders at unacceptable risk then a drawdown may not be sanctioned.
As the name suggests a Whole Loan Lender is a Lender that provides all of the funding on a loan facility, no matter whether there is/are single or multiple drawdowns. Whole Loan Lenders have the right to use their own trustees to hold the security, to be the Lender of record and are able to exercise step-in rights should a Borrower breach any covenants.
An Underwriter is an individual or a company who looks at loan propositions and may agree to make up any shortfall between the amount requested by the Borrower and the amount offered by the Lenders, or may lend the whole amount of a loan if there is insufficient time for an auction to take place on the Lending Marketplace. Underwriting may be available on some loans although not in every case.