FAQs

General FAQs

What is Proplend?

Proplend is a Peer to Peer Lending platform that connects investors directly to Borrowers with loans secured against income producing Commercial Property in England and Wales. Proplend specialises in meeting the loan requirements of the underbanked sub £5m loan market.

Who can become a Proplend Lender?

Residents of the United Kingdom of Great Britain and Northern Ireland are eligible to apply to use the Service as a Lender. For other countries of residence, excluding the Channel Islands and the Isle of Man (“UK”), you are solely responsible for ensuring that your use of the Service does not breach any laws, regulations or rules in your country (including those relating to tax payable on any gross interest received).

You must be at least 18 years old with a current account at a duly authorised financial institution that’s acceptable to Proplend.

*Residents of other countries are accepted on a case by case basis. Please contact us at admin@proplend.com

Who can be a Proplend Borrower?

To become a Borrower on the Proplend platform you must be incorporated in the UK and be able to offer an income producing property in England and Wales as supporting security.

Is Proplend Ltd regulated?

Proplend Ltd is registered with the Office of the Information Commissioner (Reg No: Z3655272). Proplend Ltd is authorised and regulated by the Financial Conduct Authority, and is entered on the Financial Services Register under firm registration number 662661. Proplend Ltd is not covered by the Financial Services Compensation Scheme. Proplend Security Limited registered office is 145-157 St John St, London, EC1V 4PW (Company Number: 08620117) Proplend Security Ltd is registered with the Office of the Information Commissioner (Reg No:ZA014126). Proplend Ltd registered office is 145-157 St John St, London, EC1V 4PW (Company Number: 08315922).

How do the loans work?

There is a standardised Loan Contract between the Borrower and each of the Lenders, detailing the loan amount, the tranche, the interest rate, and the term of the loan. Proplend Security Limited (PSL), a wholly owned subsidiary of Proplend Ltd, enters into a single set of security documents with the Borrower and holds them in trust for the Lenders. PSL will take a 1st charge on the property offered as security (which is registered with the Land Registry). Proplend also retains the equivalent of 6 months’ interest on the account.

What types of properties do you lend against?

Proplend arranges funding for income producing commercial properties including office, industrial, leisure, retail and residential blocks in England and Wales. We do not accept empty properties or development projects or individual residential properties.

What kind of loans are available?

The loans are fixed rate, interest only loans with up to 75% loan to value (LTV) of the property value. We will also consider shorter term Bridge Loans. Any property to be financed must be already owned by the borrower.

*Purchase money may be considered on a case by case basis

How long will the loan be for?

Loan terms range from 6 months to 60 months (5 years).

What size are the loans?

Loans amounts range from £250,000 to £5,000,000.

What are the loan repayment terms

Loans are interest only with the capital amount being repaid at the end of the term.

What is the loan Tranching?

The whole loan will be split across up to three Loan to Value based tranches, A, B & C. Tranche A up to 50% LTV, Tranche B 51-65% LTV and Tranche C 66-75% LTV. Interest rates vary per Loan Tranche.

When will interest payments be made?

Interest will be paid from Borrowers to Lenders on a monthly or quarterly basis, depending on the individual loan contract.

How do the Tranches differ?

The tranches are based on LTV ranges: the higher the LTV, the higher the perceived risk and therefore, the higher the interest rate. The tranches have pre-agreed priority as set out in the Proplend Members’ Agreement, Tranche A has priority over Tranche B & C, Tranche B is ranked after Tranche A but has priority over Tranche C. Tranche C is ranked behind both Tranche A & B.

Why have the Tranches?

Not every Lender has the same risk profile or return requirements. For this reason, we offer the loan Tranching model, which allows multiple Lenders to participate at up to three separate LTV levels. Each tranche offers its own risk profile and interest rate return. It allows a Lender who is restricted to invest only up to 50% LTV to participate in a loan with a borrowing requirement of 75% LTV.

Can Lenders invest in more than one Tranche?

Yes, a Lender can decide which Tranche to invest in and can invest in one Tranche or a combination of Tranches. They also determine how much to invest in each Tranche (minimum investment is £1,000*).

Can Lenders invest using their SIPP or SSAS?

Yes, Lenders can invest using one of our SIPP or SSAS preferred partners. Please visit our PENSIONS page for more information.

Does Proplend use the auction process?

The loans are not run on a classic auction basis where one Lender can under bid another. The interest rates at each tranche level are fixed and lenders invest on a ‘first come first lend basis’. If there is loan availability and you offer to invest, you will be successful.

How does Proplend make money?

Proplend charges Borrowers an Arrangement fee, being a percentage of the value of the loan. Proplend charges Lenders a service fee equal to 10% of the interest that they receive, only when they receive it. For more information, please visit our FEES page.

Which Professionals act for Proplend Security Limited?

A valuer from a leading UK firm of RICS qualified valuers will be instructed to value the property being offered as security. Keystone Law is appointed by PSL to act on its behalf for matters relating to Certificate of Title and Security.

Borrower FAQs

Who can be a Proplend Borrower?

To become a Borrower on the Proplend platform you must be incorporated in the UK and be able to offer an income producing property in England and Wales as supporting security.

What types of properties do you lend against?

Proplend arranges funding for income producing commercial properties including office, industrial, leisure, retail and residential blocks in England and Wales. We do not accept empty properties or development projects or individual residential properties.

How do Borrowers contract with Proplend?

Borrowers are bound by the Proplend Members’ Agreement and Borrowers are required to formally agree to the terms before their Loan Request can be posted live on the Platform. Borrowers should read this document carefully and where necessary, take independent professional advice.

How do Borrowers contract with Lenders?

Borrowers and Lenders will be required to sign direct Loan Contracts.

Borrowers and Lenders should read this document carefully and where necessary, take independent professional advice.

How do Borrowers contract with Proplend Security Limited?

Proplend Security Limited will enter into a single set of security documents which will include a Charge Document and other security documents as determined by PSL. Borrowers should read these documents carefully and where necessary, take independent professional advice.

What information do I need to provide to make a Loan Request?

First you will need to register with Proplend by signing the Proplend Members’ Agreement.

Proplend will carry out the required KYC and Anti-money laundering checks, which will require identification documents. You will be required to complete a Borrower Application Form and then provide further information about the property, the tenants, and yourself as requested by Proplend.

What other information will be required to support my Loan Request?

A RICS qualified valuer will be instructed to value the property and your solicitor will be required to supply a Certificate of Title in a format acceptable to Proplend’s solicitors, Keystone Law. This will be completed before the Loan Request is listed live.

How will you decide if Proplend is prepared to post my loan request?

Based on the information provided by you, Proplend will complete an initial review of the loan request in order to determine if we believe it will be of interest to our Investors. Following this, we will request more detailed supporting information on both you and the property and Professional Valuation and a Report on Title will be instructed. Once we are happy with these, you will be asked to sign the Loan Request Document. Your loan will then be listed as live. The Loan Request Document plus all supporting documents including the Valuation and Legal Report will be viewable by all prospective Investors.

What are the costs are associated with the Loan Request?

  1. Completion Fee deducted from the loan at drawdown from the gross loan amount
  2. Valuation Fees payable directly to the Valuer
  3. Solicitor fees and any other professional fees

Is a completion fee payable?

Yes, this is agreed with the Borrower and is set out in the Loan Contract. The completion fee will be paid from the gross loan proceeds on day of loan closing.

What is the Break Fee?

If your Loan Request is successfully funded within the agreed funding period and you decline to accept the Lenders’ Offers, then you will pay a Break Fee of 2% of the monies raised.

When does the funding process end?

When either the funding period has expired or the Loan Request has been fulfilled.

What happens if you don’t get sufficient offers?

If at the end of the funding period, and insufficient offers have been received, the funding period can be either extended or the Borrower is free to seek funding elsewhere.

Is the interest rate that I pay fixed?

Yes.

Can I repay my loan early?

Yes, you can repay your loan before the end of the loan period but if you do so, penalties may apply. These are loan specific and are set out in the Loan Contract.

How will I know if my Loan Request has been funded?

We will notify you by email as to the progress of your Loan Request.

What happens once the Loan Request has been successfully funded and the loan closes?

Keystone Law will carry out the remaining legal due diligence on behalf of the lender group. Once they are satisfied and the conditions of the Loan Contract have been met, you will be required to sign the individual Loan Contracts and complete the Security Documentation.

The gross loan funds will then be available for drawdown.

What is the difference between the gross loan and the net loan amount?

The gross loan amount is the amount indicated on the Loan Request. At closing we deduct from the gross loan amount any outstanding fees due to Proplend and other professionals (ie: completion fee), we will retain a minimum of the equivalent of 6 months’ interest due (Interest Reserve), we will redeem any outstanding loans that are currently secured against the property in order for PSL to take a 1st charge with no other charges outstanding on the property, and the balance is the net loan amount available to the Borrower.

What is the Interest Reserve?

At closing we will retain the equivalent of 6 months’ interest due on the loan. This will be held in the Interest Reserve Account and will be used to pay lenders in the event of a default. This is only a short term solution and the Interest Reserve Account must be brought back to the equivalent of 6 months interest, and all interest payments up to date. In the case of a Bridge Loan, we may retain the full interest due for the term of the loan.

Do you keep the full interest reserve account for the entire term of the loan?

When there are three months left on the loan term and assuming there are no arrears, costs or fees owing, we will distribute to the Lenders their pro rata share of the Interest Reserve as each repayment falls due. The balance of the Interest Reserve will be deducted from the final loan amount outstanding at repayment.

How is interest paid?

For administrative convenience, each Borrower will submit the Repayments due in a single payment to the Proplend Customer Funds Account, by direct debit or standing order. The payment will be recorded into the Proplend Account of each Investor.

Who are the Valuers that will act for the successful Lender group?

The firms who will act in relation to any particular loan will be selected from leading UK firms of RICS qualified Valuers.

Who are the Solicitors that will act for the successful Lender group?

Keystone Law

Who do these Solicitors and Valuers act for and who pays them?

Appointed Solicitors and Valuers act for Proplend Security Limited and their fees are paid for by the Borrower, in the same way that a bank lender would expect these fees to be paid.

Lender FAQs

Who can become a Proplend Lender?

Residents of the United Kingdom of Great Britain and Northern Ireland are eligible to apply to use the Service as a Lender. For other countries of residence, excluding the Channel Islands and the Isle of Man (“UK”), you are solely responsible for ensuring that your use of the Service does not breach any laws, regulations or rules in your country (including those relating to tax payable on any gross interest received).

You must be at least 18 years old with a current account at a duly authorised financial institution that’s acceptable to Proplend.

*Residents of other countries are accepted on a case by case basis. Please contact us at admin@proplend.com

Can Lenders invest in more than one Tranche?

Yes, a Lender can decide which Tranche to invest in and can invest in one Tranche or a combination of Tranches. They also determine how much to invest in each Tranche (minimum investment is £1,000*).

Can Lenders invest using their SIPP or SSAS?

Yes, Lenders can invest using one of our SIPP or SSAS preferred partners. Please visit our PENSIONS page for more information.

How do Lenders contract with Proplend?

Lenders are bound by the Proplend Members’ Agreement and are required to formally agree to the terms before they can access Loan Investments and invest via Proplend. Lenders should read this document carefully and where necessary, take independent professional advice.

How do Borrowers contract with Lenders?

Borrowers and Lenders will be required to sign direct Loan Contracts.

Borrowers and Lenders should read this document carefully and where necessary, take independent professional advice.

How do Lenders interact with Proplend Security Limited?

Proplend Security Limited will hold the security documents in trust on behalf of the group of Lenders. Lenders should read these documents carefully and where necessary, take independent professional advice.

What is the Loan Structure?

Each whole loan is made up of group of individual Lenders. Each Lender has a direct relationship with the Borrower. Proplend Security Limited holds the security on the property and any other security deemed necessary in trust on behalf of the group of Lenders.

How do I open a Lender Account?

Register with Proplend via the Lender Registration page. Lenders are bound by the Proplend Members’ Agreement and should read this document carefully and where necessary, take independent professional advice. Then complete the Application via the Lender Dashboard and we will carry out the required Know Your Customer (KYC) and Anti-money laundering checks. Once fully approved, your account will be activated.

We will open a Client Account in your name within our Proplend Client Account held with Barclays, you may then fund your Client account by making a bank transfer. A minimum of £1,000 is required. Once you have funded your account, you will be permitted to buy a loan on the Proplend Loan Exchange or make an offer to lend to a loan In Funding. You cannot buy or make an offer to lend for an amount greater than you have freely available in your Client Account.

Can I withdraw my offer to lend or buy once made?

Once committed an offer to buy or lend stands and cannot be withdrawn. If investing into a loan In Funding, then the funds are locked-in for the loan offer amount until the funding process ends. The Lender’s funds are transferred to the Borrower’s Account for drawdown of the loan on the day of closing. If the funding process is unsuccessful the Lender’s funds are released and can be used for other Loan Investments. Additionally, once funded you can sell your Loan using the Proplend Loan Exchange (PLE).

Can I access my money at any time?

Once you have made an investment using the Proplend platform, your money will be locked in for the term of the loan; however, you can sell your loan to another Proplend Registered Member using the Proplend Loan Exchange. Any un-lent monies which are not committed to an active offer to lend can be withdrawn by requesting the funds from your account.

Will I be able to claim against the authorities if something goes wrong?

If you have a complaint about the Service, you should email complaints@proplend.com with brief details of your complaint and your account number. Your complaint will then be handled in accordance with Clause 14 of the Proplend Members’ Agreement. Complaints by individuals may ultimately be referred to the Financial Ombudsman Service, and you may also have the right to make such a complaint directly. Your money is held by us in trust on your behalf in a segregated bank account so that it does not form part of our assets and would not be available to our creditors in the event of our insolvency; and your Loan Contracts and the Security Documents would remain enforceable even if we ceased to trade for any reason.

Should I seek professional advice before I lend?

If you are in any doubt as to whether lending using the Proplend platform is suitable for you, you should seek independent advice from a financial adviser or other professional.

What are the risks?

There is no guarantee that investors will be repaid the amount of their original loan, nor any interest on that loan. The past performance, including the rates of default, of loans made to Borrowers via Proplend should not be viewed as a guide to future performance. For further information please read the Proplend Lenders’ Risk Disclosure statement.

Is my money protected?

Lenders’ unlent money is held in a Proplend Client Account held with Barclays Bank, which is protected under the Financial Services Compensation Scheme (FSCS). Funds lent into a Proplend Loan are no longer protected under the FSCS.

Can I choose which loans I wish to invest in?

Yes.

Are the loans you offer ones the banks won’t consider?

There used to be 60 or 70 banks actively servicing the sub £5m commercial loan sector, today there are only about 10 and there is c£50 billion of outstanding debt which needs to be refinanced. Banks are unable to consider a loan for many reasons, even if it is a fundamentally a good loan.

Unlike banks, Proplend has no restrictions when it comes to lending to any one geographical region, property sector or tenant type.

Is there a minimum/maximum investment amount?

In order to buy a loan on the Proplend Loan Exchange you will need to deposit sufficient funds to cover both the purchase price plus the accrued interest to that date of the loan part you wish to buy. Be advised the accrued interest changes on a daily basis.

In order to lend in the In Funding market, you will be required to deposit a minimum of £1,000 in your Proplend Client Account, Loan Investments are made in multiples of £1,000. There is no maximum and Lenders can invest in whole or part loans.

Is the interest rate that I receive fixed?

Yes, you receive a fixed rate of interest throughout the loan term. The interest rate does not change.

How and when is my interest paid?

Interest is paid gross to Lenders from the Proplend Customer Funds Account on a monthly or quarterly basis, based on the Loan Contract. Each Lender is responsible for accounting for and paying any taxes due on such interest.

Am I liable for tax on the interest I receive?

Yes, in the UK you would be liable for income tax on the interest that you receive as an Investor.

Interest will be paid gross to Lenders, and each Lender shall be responsible for accounting and paying any taxes due on such interest. If you are unsure of your tax position you should take independent professional advice.

Can a Borrower repay the loan early?

Yes, but if they repay the loan early, they may be subject to an Early Repayment Charge, as detailed in the Loan Contract.

What happens if the borrower doesn’t pay?

We will notify Lenders if there is a Borrower interest payment shortfall and the reason for it. Proplend will look to work with the Borrower to resolve any payment issues before a default occurs. If it’s a more serious problem however we will, based on advice, proceed with the most appropriate course of action which may include the appointment of an LPA receiver and/or the sale of the property. Lenders will be able to make a claim against the 6-month Interest Reserve as interest payments fall due for up to a maximum of 6 months.

Please note that a loan that has gone into arrears, which means the interest payment is overdue by more than 7 business days, will not be eligible to be listed on the Proplend Loan Exchange and any loans listed on the Proplend Loan Exchange will be removed.

What fees do I have to pay?

Proplend charges a servicing fee equal to 10% of the interest that Lenders actually receive, and the fees are paid monthly or quarterly, according to when interest is paid. To learn more about Proplend’s fee structure visit our FEES page.

What responsibility does Proplend take for information posted about a particular Loan Request?

Borrowers are required to warrant that all the information they have provided to Proplend is accurate, complete and not misleading. They are asked to formally approve the Loan Request and supporting information that is to be posted related to a particular loan.

Proplend does not take responsibility for the Loan Request and lenders must rely on the accuracy and completeness of information that the Borrower provides, as well as professional reports (including Valuations and Reports on Title) addressed to Proplend Security Limited.

What happens if Proplend dissolves?

  1. Lenders, money that is not invested is held in a segregated client money account with Barclays Bank plc, which is administered according to the client money rules of the Financial Conduct Authority (“Proplend Customer Funds Account”);
  2. The Security Document(s) agreed between each Borrower and PSL are held in trust by PSL for and on behalf of the Lenders to the Borrower;
  3. Proplend has made arrangements with a third party whereby it will take over the administration of the outstanding Loan Contracts in the event that Proplend is insolvent or ceases trading, to ensure that the Borrowers continue to make interest and capital payments as they fall due and the appropriate amounts are then distributed to the Lenders.

Please refer to our Proplend Lenders’ Risk Disclosure statement for further information.

Does Proplend Guarantee the loans?

Proplend, does not guarantee the loans. We bring together and present all the information so that Lenders can decide which loans they wish to invest in, using their own judgement.

The list of questions and answers above is provided as a guide to how Proplend operates. None of this content should be construed as legally binding on any party. Borrowers and Lenders should refer to the Proplend Members’ Agreement. Formal Loan Contract documentation and security documentation will always take precedence over this FAQ or any other notice.