As with most forms of investment, peer-to-peer lending carries a degree of risk to your capital; in this case, if the borrower is unable to repay their loan. At Assetz Capital, we seek to reduce this risk to our investors by taking asset security on every loan, with the added benefit of a discretionary Provision Fund for some of our investment accounts. Investment Account target interest rates should be considered along with the relevant Investment Account expected defaults & losses information. Past performance does not guarantee future performance. We recommend that prospective lenders read the Key Investor Information pages before investing.
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Any monies transferred to our system are held in a designated client money account in accordance with FCA rules. This account is “ring-fenced” and protected in the event that anything should happen to Assetz Capital, safeguarding clients’ funds. The account is held with Barclays Bank.
Assetz Capital is not a bank. Any monies you place into your account are not protected by banking laws.
It is important for our lenders to be aware that, like all peer-to-peer lending platforms, we fall outside of the scope of the Financial Services Compensation Scheme (“FSCS”), though we are regulated by the Financial Conduct Authority (FCA). This means that, should a peer-to-peer lending platform fail for any reason, those investing (lending) directly via the platform would have no recourse to the FSCS.
However, changes in the law in 2016 has resulted in some protection being offered to lenders investing in peer-to-peer platforms under specific circumstances.
More can be read about this here: https://www.assetzcapital.co.uk/blog/show/86/2016/05/19/fscs-protection
You can read more about the FSCS here: http://www.fscs.org.uk/
As with most forms of investment, peer-to-peer lending carries a degree of risk to your capital; in this case if the borrower is unable to repay their loan. At Assetz Capital, we seek to reduce this risk to our investors by taking asset security on every loan.
Unlike many other peer-to-peer lenders, Assetz Capital does not currently charge lenders a fee. All costs are paid for by the borrower.
The minimum investment amount per loan on the Assetz Capital platform is £0.01. We advise investors to spread their risk by diversifying their money across as many investments as possible.
Loan term lengths can be anything from 3 months to 5 years.
Investors have the option to sell on their loan parts at any time to other investors if they wish to free up their capital. The sale of loan parts is subject to demand from other investors (including any auto-invest accounts set up by other users; if the loan parts for sale match the criteria set by these accounts, the system will automatically buy up these loan parts where possible).
When using one of our investment accounts, if you wish to take part or all of your capital out at any point, after resetting your target investment amounts for each account, the system will sell loan units for you as fast as possible in order to reach these targets.
Loans can have differing repayment profiles. Some pay interest and capital monthly. Others may be interest only, whereby your interest is payable monthly and capital repaid upon loan term. Some shorter-term loans also offer a single bullet repayment of accrued interest and capital. When using our pre-defined investment accounts or the 'create your own' account option, you can choose to reinvest repayments, withdraw interest as it accumulates or withdraw all repayments.
With Assetz Capital, you have the choice to use our investment accounts or to manually browse loan opportunities to hand-pick your portfolio. To see all of our current investments available, please visit the ‘manual investment’ section of your account dashboard.
Any interest earned from any loan is treated as investment income by the tax man. The return you receive on your investment with Assetz Capital is paid gross; no tax is deducted “at source” by peer-to-peer lending platforms. Our investors are responsible for the payment of any tax due of them to HM Revenue & Customs. Tax will be payable at your marginal rate.
Investors can download a tax statement from their account dashboard which will calculate the amount of interest earned within a specified period for tax purposes.
We are not able to offer specific tax advice so we recommend that you consult a tax adviser if you are uncertain about the treatment of your investment returns.
The Assetz Investments Accounts offer investors an easy way to invest through our platform, without having to spend all day managing your account.
Based on predefined types of security and rates of return thresholds, our product range allows you to be as prudent or as adventurous as you like in your strategy. This investment option auto-diversifies your portfolio across loans that fall within predefined targets for a more hands-off investment experience.
When using our Investment Accounts or the 'Create Your Own' account option, the system will automatically diversify your portfolio for you. The platform will attempt to diversify your portfolio down to 1% of your total holdings in any loan, with a minimum diversification rule of 25% of your total holdings in any loan if there are less opportunities available at the point of you placing your money in an account.
For more detailed information on how the system works, please read our terms and conditions.
If there is an adverse-material change within a loan you are participating in, we will inform you as soon as we know. Once a loan goes into default, it will be marked on the system, which will automatically freeze any auto-buying or selling of that particular loan opportunity.
For more information on our default procedures please visit our key investor information.
When using Investment Accounts or setting up your own personalised investment account, you have the option to “opt-out” of certain loan opportunities. This means the system will never purchase loan units on your behalf for the loans you have opted-out of. Investors are able to view upcoming loans that are due to draw down and exclude them from their Investment Accounts so loan parts are not automatically purchased.
Please note that when using our Investment Accounts, opting-out of loans may affect the balance of your portfolio, and therefore your rate of return may not reflect the target interest rate of the category as a direct result of the exclusion. The system will always try to balance your portfolio to reach the target interest rate, but opting-out of loans may reduce the options available to you and therefore could have a negative impact on your rate of return.
Not yet, this is coming soon. The Assetz Capital platform will allow certified investors to build their own auto-investment account. Once set up, the system will auto-diversify your portfolio over loan opportunities which fit your investment strategy requirements.
For more information, please get in touch with email@example.com.
When you transfer funds into an investment account, the system will allocate your funds to available loans as quickly as possible (but always diversifying the amount you invest over at least 25% per loan, with a target of 1%). If there aren’t enough loan opportunities available, the amount will show in the dashboard as ‘unallocated funds’ and will be deployed as soon as an appropriate loan becomes available.
Normal market conditions means conditions that are broadly what we have at the moment. This means economic conditions are reasonably stable, lenders are making withdrawals from the Quick Access Account (QAA) or 30 Day Access Account (30DAA), together known as the ‘Access Accounts’, in the normal course of business and other lenders are willing and able to buy their loan units through that account and others that we offer. In addition, the Access Accounts also hold a certain amount of cash “liquid” to help increase the liquidity of withdrawal requests above and beyond normal market supply and demand. The result of the Access Accounts operation and the normal market conditions we have enjoyed to date is that every lender has had their withdrawal request carried out when they requested since the accounts opened for investment.
Nonetheless past performance cannot always be taken as a guide to the future and abnormal market conditions could conceivably change the speed of withdrawals. Abnormal market conditions would be if there was a very large, sudden and extended demand to withdraw cash from the Access Accounts. This might be caused by a global recession, an abrupt and widespread loss of faith in peer-to-peer lending or a number of other situations. If, for a sustained period, a significant number of lenders chose to withdraw their cash in significant quantities and no (or few) new lenders were available to buy their loan parts, conditions would at that point be abnormal and the Access Accounts would not be then able to maintain their current speed of access for withdrawals.
Ultimately this could mean that lenders may have to wait until a buyer could be found for their loans held within the Access Accounts, or until the loans were repaid over time by the borrowers. The latter situation arises due to the loans within the Access Accounts having monthly repayments being made by borrowers or by loans naturally reaching the end of their term for full repayment. This repayment of loans should continue to create some capital which would be available for withdrawal by investors regardless of market conditions being abnormal.
This is the reason that we quote the “in normal market conditions” message everywhere that we refer to Access Account withdrawal times; we cannot guarantee access times in all possible economic scenarios and we want our lenders to understand that.
A Relationship Manager will meet potential borrowers soon after an enquiry or application has been made.
The Relationship Manager will collect the required information he will need to write a credit report. This will take 2-3 days to write and then will need to be checked and vetted before being uploaded for auction.
Our underwriting facility means that once all the paperwork is in place, loans can be funded immediately.
Whilst there are charges for borrowing money through Assetz Capital these are generally negotiable and will be agreed prior to any auction being launched.
Whilst we remain sympathetic to cashflow issues that may mean repayments are missed, this remains an Event of Default. If a payment is not made on the due date, Assetz Capital has the ability to charge default interest (as advised in your Loan Agreement) on the balance of the loan until the missed repayment is made. Should this not happen and should a new agreement not be reached then Assetz Capital ultimately has the ability to call up any and all of the security you have granted to obtain full repayment.
Whilst we do not generally charge early repayment fees some loans may attract a minimum charging period, although this will be advised and agreed prior to any auction being launched.
Since the credit crunch and start of the recession, the appetite of banks for risk has reduced significantly and this means they have tightened their lending criteria. As banks are very large organisations, they have to set and enforce strict criteria across the board. This leads to inflexibility and there are many borrower proposals which are rejected by banks for failing to meet lending criteria in a very limited way.
As a small organisation with a lot of lending experience on the team, Assetz Capital is able to be flexible and use judgement as to whether proposals are worthy of support, despite the fact they may not fully meet a clearing bank’s lending criteria.
The main criterion for loan approval is the ability of the business to repay the loan. The amount of security offered proportionately reduces the risk for the investor, which in turn reduces the level of interest they are seeking on the loan.
All loans listed on the Assetz Capital platform have asset security. We take the following forms of security over loans:
A legal charge placed on a property.
A debenture providing a floating charge over the business’ assets including stock, debtors, cash and any fixed assets that are not currently charged to another lender.
Asset specific charges such as a chattel mortgage on a piece of equipment or interest registered at HPI on a vehicle.
A personal guarantee from the directors or partners in a business, or a company guarantee from a related company.
The choice is yours as to how much information you wish to divulge and if the business is to remain anonymous. Some lenders choose to do additional due diligence of their own, so disclosing as much information to them as possible can be advantageous. They may wish to visit your website or look at your competitors before they make a decision to lend.
Assetz Capital provides fast and flexible finance to UK SMEs and Property Developers through an established community of lenders. We can facilitate:
|Short-term contract finance|
|Single Invoice Purchase|
|Property Term Loans|
If Assetz Capital were to enter administration, the trustees of the trust have the power to appoint new agents to manage any existing loans and the monies invested in them. All security in relation to the loans will be held by the trust and would not be affected by any insolvency of Assetz Capital.
You are able to make a complaint through your normal Assetz Capital contact just by speaking to them and explaining the situation. That person will take the details of the issue you have encountered and we will begin to deal with your complaint.
If you prefer, you can provide us with details of your complaint by letter or e-mail instead. Please visit our complaints page for full contact details.
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Assetz Capital complies with UK regulations on the prevention of fraud and money laundering.
Every borrower is spoken to face-to-face and their trading premises are visited. Assetz Capital undertakes business checks to ensure each business is doing what it professes to do. In addition to this credit searches and Companies House checks are also performed to confirm the authenticity of the business.
Assetz Capital has a team of experienced relationship managers who go out and meet potential businesses looking to borrow money. Logic and experience is as important to gauge risk as computers, algorithms, industry averages and credit reports.
For SME borrowers we assess the business in detail from the history of the business, the management team, customers, suppliers and competitors as well as the financial information such as the annual accounts, projects and other such data. Each of these factors carries a risk and Assetz Capital will attempt to highlight where the risk is and what can be done to mitigate it.
The primary question over risk is can the business afford to repay the loan it is asking for. If it cannot repay, then the risk is already too high. If it can repay, then these other factors determine if we are prepared to allow the loan to be listed on the platform.
For property development, Assetz Capital uses experienced property bankers to meet the borrower, visit the site and structure loans in such a way as to mitigate risk.
We allow for a 7 day grace period on payments as there are occasions when cash flows are delayed
We allow for a 7 day grace period on payments as there are occasions when cash flows are delayed in addition to having to allow for weekends and Bank Holidays. A balance has to be struck in order to make the process of monitoring loans both a practical and yet robust proposition and we feel this period is reasonable
Whilst the lender default interest rate can vary on a loan by loan basis the typical lender default interest rate will be 3% per annum above the normal interest rate on the loan. Should this differ on any loan then the actual default interest rate for that loan will be noted clearly in the loan documentation.