Key Investor Information
Investing is a balance of risk versus reward. In the case of our accounts, you lend your money to businesses and your reward is the interest they pay you. It's a fair deal. But there's always a risk that they might not be able to pay back the money they borrow, leading to a reliance on the security backing the loan. This means it's important that you're clear what 'risk' means and how much you're prepared to take.
Read our Key Investor Information below to understand more about the main risks and how we help you minimise them.Defaults & Losses Terms & Conditions
What you need to know
We want you to invest with your eyes open. So before you do anything, there are some things we want to make you aware of.
Your capital is at risk
This is an investment account, not a bank account. As with all peer-to-peer lending there is no guarantee you’ll get back what you put in. We try to give you a rough idea what kind of losses to expect, but these figures are estimates.
We are not protected by the FSCS
Like all peer-to-peer lending platforms, we're not covered by the Financial Services Compensation Scheme (FSCS). This means that, if we go out of business for any reason, our investors can't get their money back from the FSCS. However, we operate under the FCA’s CASS regime so any client funds held in client account(s) as Client Money would be protected by the CASS regulations.
However, that doesn't necessarily mean you'd lose your money. If we did go out of business, the underlying loan agreement would still be in place between you and the business that borrowed your money, as would the security against the loan. And, because we're regulated by the FCA, we have what's called a ‘wind-down plan’ in place, which makes sure that our business and our loan book should be subject to an orderly wind-down should Assetz Capital fail.
Target interest rates
The advertised target interest rates on our Access Accounts are quoted gross (before tax and any possible losses) and are per annum. They’re also capped at the target rate, which means that you could earn less but you can’t earn more.
You can find these target rates along with more information on each of the account pages.
Don't forget your taxes
We don't deduct any tax at source, so you'll need to make sure you know how much tax you have to pay to HMRC, and when you need to pay it. We can't advise you on this, so if you're unsure, we recommend that you talk to a professional tax adviser.
To help to reduce the risk of loss, all our loans hold borrowers' assets as security. The vast majority of our loans are secured by one or more of the following: property, land, equipment, stock, machinery, debtors or other assets. So, if the borrower can't pay back the loan, we can use these assets to get back some or all of the money they owe you. It’s worth noting that the value of security can vary over the lifetime of the loan so even with loan security it is not possible to be certain that there will never be a loss.
We publish the ‘Loan to Value’ (LTV) or ‘Loan to Gross Development Value’ (LTGDV – in the case of a construction or development) on every loan. This helps to provide an indication of the loan value, versus the value of the security. You can view the full details of any security taken in the credit report.
Past performance does not guarantee future performance
We've probably all seen this phrase a lot. It basically means that what happened in the past can't help us predict the future. As an example, an investment might have performed well historically, but that doesn't mean it will always do so.
We do our best to predict potential returns and losses, but we can't guarantee anything. You'll need to weigh up the potential returns against the potential losses and reach your own judgement about whether an investment is right for you.
Normal market conditions
“Normal market conditions” means economic conditions are reasonably stable, our lenders are making withdrawals from the ‘Access Accounts’ (Quick Access, 30 Day Access & 90 Day Access Accounts) in the normal course of business and other lenders are willing and able to buy their loan units through those accounts and others that we offer. Our 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.
However, past performance doesn’t guarantee future performance and abnormal market conditions could possibly 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. Therefore if 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 (through monthly repayments made by borrowers or by loans naturally reaching the end of their term for full repayment). The 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 can’t guarantee access times in all possible economic scenarios and we want our lenders to understand that.
During this period of abnormal market conditions, we have taken the decision that we must apply a Lender Membership Fee, which will be a Funds Under Management Fee of 0.9% per annum, which is the equivalent of 0.075% per month, for at least three months. The first fee will be charged on 1st May 2020. Click here for more information.
For more information about how peer-to-peer lending works and the role Assetz Capital plays in it, please click below.How it works
Credit Risk Assessment
We undertake Credit Risk Assessments where we assess the suitability of borrowers in relation to the proposed loan, taking into account any relevant facts and the information presented to us. We carry out this process to consider any risk that the borrower might not pay back the loan in full. You can view full details on this by clicking the button below.Credit Risk Assessment
Wind Down Arrangements
If, for any economic or commercial reasons, we are obliged to stop operating our platform in the future, we have created a ‘Standby Plan’. This plan consists of three strategies and explains the steps we would take if this situation arose. For more information click the button below.Wind Down Arrangements