News

Due Diligence – The Evaluation and Approval of a Proplend Loan Request

Published on November 4, 2015

Proplend’s Borrower relations and underwriting team have a combined 60 plus years in the property finance industry. This highly experienced and trusted team is responsible for the due diligence process and to date they have delivered a zero default rate.

 

After a Borrower submits their Loan Request using our Borrower registration page, we complete a primary review to determine the viability of the loan and to assess whether or not it would be attractive to our investors.  If deemed suitable, an initial set of terms are agreed, and upon acceptance, we begin the next stage of due diligence.

 

During the full due diligence review, a member of the Proplend team visits the property and meets with the borrower. Although we are an online platform, this stage is essential in the approval process and is completed every time a new Loan is being evaluated.

 

A credit analysis is then also initiated on the borrower, the property and the tenants. This includes a review of the property cash flow and an examination of the leases. Credit checks for any company, or individual, offering security on the loan and anti-money laundering checks are also performed.

 

Professional reports are then instructed, which include a valuation of the property, by a registered RICS Valuer, to ensure that it offers adequate security for the Loan. A Certificate on Title is prepared by the Borrower’s solicitor and confirmed by Proplend’s solicitor.

 

We then prepare the security package that includes, as a minimum, a first legal charge on the property but can also include a personal guarantee, a corporate guarantee, and a debenture. All security is held in trust by Proplend Security Limited on behalf of the group of lenders.

 

The Loan Request will contain specific covenants to which the borrower must adhere, which include a maximum of 75% loan to value (LTV) and a minimum interest cover of 1.25x. These covenants will be checked on an ongoing basis.

 

Once the Loan is approved and posted on the platform investors have full transparency of the due diligence reports, which they can access via their Lender Dashboard.

 

At Proplend we aim to ensure that every Borrower Loan Request listed on our platform is creditworthy and attractive to investors. To date less than 1 in 10 of Loan Requests have made it through our due diligence process and onto the platform.

 

If you have any questions related to our due diligence process or want to speak with a member of our Borrower team, please contact us at +44 (0) 203 397 8290 or email admin@proplend.com.