News

Sitting on cash? Frustrated with low interest rates? Our Tranche A Loans could be the answer.

Published on April 26, 2016

The Financial Times and Boring Money recently reported on the UK’s investment culture, outlining that:

 

  1. There are around 25m people with savings feeling confused, 4m have engaged with Financial advisers, but the rest are sticking in cash.
  2. Investors would rather do nothing than risk losing money. This includes ones with smaller investment portfolios sub £25,000 through to £150,000
  3. Many Investors don’t like or don’t trust advisors, and would struggle to pay more than £100 per hour for advice
  4. IFA’s struggle with P2P advice
  5. 60% of people with investable wealth of £100-150k are looking to invest in something with better returns than cash whilst offering capital protection.

 

The research was conducted by YouGov and Boring Money’s in-depth “Spring Census” research report.

 

Given that the results returned quite negative views towards investing, Proplend is pleased to report that we have an alternative to those reluctant to use an advisor or who prefer to remain in cash, our Tranche A Loan. We can relate and recognise that not all investors have the same risk and return profile, which is why we pioneered the Loan Tranching Model that splits each loan in up to three LTV (Loan-to-Value) based Tranches, all secured against income producing UK commercial property.

 

Tranche A is the lowest risk of the three Tranches, because it never exceeds 50% LTV. In the unlikely event a borrower defaults the property would have to fall by over half its value before an investors capital is at risk.

 

Proplend Loan Tranche_Final_Feb16

 

Tranche A is currently returning an average of 6.28% pa* to investors. An attractive rate of risk adjusted return with the benefit of investors being able to choose which loans to invest in on a deal by deal basis.

 

There are currently eight different Tranche A Loans available for immediate investment on the Proplend Loan Exchange (PLE), paying from 5.75% to 7.75% pa**. Investments start from as little as £5,000.

 

Click HERE to view an example Tranche A portfolio using Loan Investments currently available on the PLE.

 

For investors wanting a better return on their capital but too cautious to move out of cash deposits into more traditional investments, P2P Lending could be the happy medium. With attractive returns from 5-12% pa* and capital protection secured against UK commercial property Proplend can bridge this investment gap.

 

 

*After fees but before bad debts and taxes

**Before fees, bad debts and taxes