Great British Business Account Series 2
Key Account Information
The Provision Funds we offer do not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The funds have absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Provision Funds when considering whether or how much to invest.
Please see also our Provision Fund policy
|Key information in relation to loans post account closure||Minimum||Maximum|
Lender Interest Rate on loans at origination - rate per annumNotes:
This Account is closed to new investment. The range of interest rates shown here reflects the current investment portfolio for this closed account, some of which may include additional interest rates being earned by lenders for loans in default.
|6.5 %||14 %|
This Account is closed to new investment. The range of terms shown here reflects the current investment portfolio for this closed account.
|6 months||5 years|
Target Interest Rate (likely actual return) per annum after Provision Fund Contributions
This target rate is before the impact of defaults and taxation - you should see the tax statement page for further information on the impact of taxation.
Assetz Capital Fees charged to borrowersNotes:
This Account is closed to new investment. The range of fees shown here reflects the current investment portfolio for this closed account. On some loans AC may earn additional monitoring fees if the loan defaults.
|Arrangement fee (net of broker fees) - % of loan facility||0 %||7.5 %|
|Monitoring fees paid to Assetz Capital - % per annum based on loan outstanding||0 %||5.5 %|
|Exit fees - % of loan facility||0 %||2 %|
Provision Fund performance
As at 30 June 2020
|Value of investment outstanding
Notes: In line with the Regulations we have added back amounts paid to Lenders by the Provision Fund
|Value of Provision Fund
Notes: Ring-fencing does not apply to this account as so has not been deducted.
|Proportion of outstanding investments paid out of Provision Fund
Notes: This is the value of payments to Lenders from the Provision Fund which have been added back to the value of investments outstanding divided by the total value of investments including those payments.
Key Information about how the account operated prior to its closure
Target interest rate
The GBBA2 offers a capped, target lender return for investors of 6.25% p.a. gross (before tax and any loan losses and protected by a discretionary Provision Fund). We do not impose any minimum term on your investment and make no charge if you withdraw your cash at any time.
Please note that you could receive less than this rate of return if the GBBA2's Provision Fund were exhausted and then loans were to default or borrowers were no longer able to repay their loans.
The minimum investment into the GBBA2 is £1 and there is no maximum, subject to loan availability.
Automatic loan selection and diversification
Included in the GBBA2 are loans to UK SMEs that are secured with first and/or second legal charges over land or property. In addition, these loans may also benefit from security taken over machinery, invoices, company assets, debtor books, other realisable assets and/or a personal guarantee from the business owner, as well as having the benefit of a discretionary Provision Fund (see below).
The GBBA2 will automatically diversify your account funds across many matching loans at any given time, with the aim of doing so in an equal and proportionate way and subject to loan availability. For example, if 50 suitable loans are available, the GBBA2 will aim to invest approximately 2% of account funds into each loan. Likewise, with only five suitable loans, the GBBA2 will aim to invest approximately a fifth (20%) of account funds into each loan should suitable numbers of loans be available.
Please note that in situations where the number of loans matching the account criteria is low, diversification is only possible across the matching loans – this may mean that the actual extent of the automatic diversification may be limited unless/until new loans become available. In such a scenario the percentage invested in any one loan may rise.
After your funds are invested in loans the diversification system continues to adjust your holdings in order to spread your funds across as many loans as possible. This is achieved by swapping loans with other investors in the GBBA2 such that everyone’s investments are spread as widely as reasonably practical. In this way, as new loans are drawn down, lenders with available funds will invest in those loans, and then exchange loans with all other lenders in the account so that everyone is able to spread their funds into that new loan, subject to the loans being tradeable at that time. This mechanism is subject to various threshold criteria to keep the exchanges of loans to manageable levels. To fully benefit from this mechanism a lender would need to invest £500 or more in the GBBA2.
The maximum loan-to-value ratio for individual loans included in the GBBA2 is three-quarters (75%) of each loan’s property value (please see the Asset Security section below for an explanation of the asset security that we take and for more details on LTV/security).
What's more, by investing in the GBBA2, your money helps to boost the UK economy by supporting the growth of carefully vetted British businesses, as well as earning a fairer, risk-adjusted return.
Interest and repayments
Interest is earned monthly, but as not all loans pay monthly interest, it may be accrued on a limited number of loans for payment at the same time as the loan is repaid. You will also receive capital repayments from time to time, based on loans' contracted repayment dates (their due dates for repayment). Interest and repayments can be automatically reinvested (see below).
All GBBA2 investments benefit from automatic inclusion in a separate, discretionary Provision Fund intended to help to protect investors from income delays or income and/or capital losses within the GBBA2. Any loan interest paid by borrowers that is above the 6.25% target rate for this account, minus any contractual fees due to Assetz Capital, will be used to fund the Provision Fund.
The Provision Fund that protects this account seeks to protect against any potential capital losses if, in the event of a loan default, the security taken on that loan does not cover the outstanding balance due on that loan.
In order to provide additional protection to our clients’ investments, at Assetz Capital we always take realisable asset security on all our loans. This security takes the form of charges over property, equipment, or other assets professionally valued to be worth more than value of the loan. Within the loan details we will quote a Loan to Value (LTV) (or Loan to Gross Development Value (LTGDV) for construction/development loans) in order to provide investors with an indication of the loan value versus the eventual expected security value.
The value of security can vary across the lifetime of a loan. This may be through ordinary course of business during the natural course of a development / construction project or it could be where security is lost or harmed. Details of security taken are provided in each credit report and, wherever possible, any third party independent valuations are also provided.
In the case of a development loan / construction project we will provide details of the loan to value when the loan is initially drawn and the forecast end loan to value post completion of all work. The transition of value throughout a development is not, however, linear and will vary according to the development and is also reliant upon continued funding of the development each month. As such, the loan to value during the course of a development / construction project may exceed the maximum opening and closing values quoted.
In the event of a loan failing to repay in full this security can be called upon to settle the outstanding balance of the loan, providing a far greater chance of a full recovery in contrast to lightly secured loans protected by just a personal guarantee, or completely unsecured loans.
This security and the above-mentioned Provision Fund is intended to help reduce the potential for investor losses.
Funding your account
It is quick, simple and straightforward to fund your GBBA2: you simply move money into and out of your account by bank transfer. When using 'faster payments' to deposit funds, this service should be almost instantaneous, but other transfers can take up to three working days. There is no minimum transfer amount for bank transfers. Moving funds between Assetz Capital Investment Accounts should be possible within seconds, while complete withdrawal of non-invested funds from our platform should happen within two working days.
Reinvest your interest and capital
Within your Loan Dashboard, you can choose to set your account to automatically re-invest interest income and capital repayments back into your GBBA2 (if it is still open for new investments). Alternatively, you can transfer this cash into your Cash Account for investment in other loans or Assetz Capital Investment Accounts.
Using the Aftermarket
Investors can exit loans early via our Aftermarket, subject to demand from other investors at that time. Via this Aftermarket and at your request, the GBBA2 will aim to sell part or all of your investment at any time, subject to continued demand for these loans from other investors, and provided the loan is not suspended and remains tradeable
What's more, you have the ability to add to or reduce your investment in your GBBA2. After your initial purchase, if you would like to increase or decrease the amount invested, then you may do so, subject to availability and demand. When changing your investment level in your account, the GBBA2 will aim to continue to automatically balance your loans, so as to maintain maximum diversification.
Managing your account and manually investing in loans
Via your Loan Dashboard, all of your Assetz Capital investments can be tracked, monitored and managed through our comprehensive and market-leading portal.
In addition, you can invest directly in the underlying loans that the GBBA2 invests in, subject to the availability of these loans in the Aftermarket, but without the protection of the Provision Fund. You can do this by using the Manual Lending Account (MLA) and directly selecting these individual investments. Without the protection of the Provision Fund, these manually selected loans may deliver higher or lower net returns after any losses than the GBBA2.
Defaults and losses
For more information on our default and loss performance data and more detail on our methods of analysis and risk management please see our Defaults and Losses statistics and explanation page.Defaults & Losses