BLEND Network Review
Below, from one of 4thWay's experts, is the BLEND Network review. Blend is a P2P lending platform focused on development loans and lending to businesses secured against real property (real estate), with good-looking interest rates and attractive looking security.
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BLEND Network Quick Expert Review
Interest rates look attractive, but more time required to test this service
BLEND Network has completed £8 million since 2017. We have not yet been provided with enough evidence that the key in-house team has the skills and direct experience required to assess the development, short-term (bridging) and property-secured business loans that BLEND Network does, so at present it will be relying on building a future record to prove itself.
BLEND Network has been open with us about almost all aspects of its business and yet we need to see more details about the specifically relevant experience of the key people. At this early stage in its life, statistics to help lenders see their record don’t have much meaning, but we hope that BLEND will start to regularly produce and update these in the coming months.
Loans are mostly to fund property developments, including refurbishments, and in its short life so far there have been no late payments or bad debts.
BLEND Network focuses very much on the quality of the property security as opposed to the quality of the borrower. This is typical of a lot of property lending. In loans such as these, lenders might normally expect there to be a number of bad debts among the loans they make, but they should generally expect that all or most of those bad debts will be recovered, with extra interest, over time.
BLEND has set itself tighter criteria compared to most other property P2P lending sites in terms of the amount that can be borrowed versus the property valuation. For example, borrowers can borrow a maximum 65% of the hoped-for future sale price when it comes to developments, or just 65% of the current property valuation for other loans.
BLEND also takes other non-property security, such as possessions owned by a business. But it is the substantial property security that provides the biggest protection against losses.
Appropriately, development loans are offered to developers in tranches, so that they get a chunk of the loan first, and then only after a monitoring surveyor has assessed the work's progress is the developer allowed the next tranche.
With criteria such as these, if all goes according to plan, BLEND Network should be hoping for very low bad debts. The average interest rates, should also, then, turn out to be attractive for the risks involved.
It is nice to be told that, currently, the CEO lends around 5% in every single loan.
We have little information on BLEND’s financial health. It is very new, so we expect it will take some time before it becomes profitable.
You can choose your own loans or spread your money across multiple loans automatically. The minimum you can lend in each loan is £1,000.
One unusually flexible feature is that manual lenders can question both the borrowers themselves and ask BLEND about the loans too.
There are few loans to find, at present, and they are snapped up quickly when re-sold on the resale market. This means that it could take a while to spread your money across loans, although BLEND will, if you want, automatically allocate a portion size set by you when loans become available.
Independent opinion: the opinions expressed are those of the author and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.
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