BLEND Network Review
Below, from one of 4thWay's experts, is the BLEND Network review. Blend is a P2P lending platform focused onand lending to businesses secured against real property (real estate), with good-looking interest rates and attractive looking .
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BLEND Network Quick Expert Review
Interest rates look attractive and it's first few years have got off to a good start
When did BLEND Network start?
BLEND Network has completed £21 million since 2017.
What interesting or unique points does BLEND Network have?
Loans are mostly to fund property developments, as well as short-term property loans. BLEND Network compensates for what is probably a shortfall in experience with stricter lending criteria. Unusually, manual lenders can question the borrowers themselves.
BLEND Network during COVID-19
We're awaiting more details to see the impact on its existing loans, but BLEND has managed to keep lending and at a faster pace than before the pandemic.
How good are its loans?
BLEND Network focuses on the quality of the propertyas opposed to the quality of the borrower. This is typical of a lot of short-term lending, although I would have liked to have seen unprompted enthusiasm about the record of the property developers it allows as borrowers.
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 ultimately be recovered.
BLEND Network has set itself tight criteria in terms of the amount that can be borrowed versus the property valuation. Borrowers can usually 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 Network ensures that the loans put you at the front of the queue if the borrower's property ever needs to be repossessed and sold.
It also takes possessions owned by the business borrower as.
How much experience do BLEND Network's key people have?
We haven't been provided with enough evidence that the key in-house team has the skills and direct experience required to assess the loans it does, so at present it will be relying on continuing to build a record to prove itself.
BLEND Network review: lending processes
BLEND Network relies on external partners to provide loans and to conduct a deep assessment of them, which isn't optimal for assessing the risks. Those partners also profit from BLEND Network taking on the loans, which introduces what we call “moral hazard”.
BLEND Network does some checks itself and has a final say on whether to accept the deal.
are offered to developers in tranches, so that they get a chunk of the loan first, and then – crucially – only get further chunks after a monitoring surveyor has assessed progress on the development.
The money for each tranche is raised as-and-when it's needed, not up-front. This can lead to unforeseen difficulties in funding the loan in full. This is one of the least likely risks, but the impact could be substantial.
When the first bad debts start arising on BLEND, I'll be looking to see that it's quick to acknowledge them as such and take action. This greatly improves chances of success in recovering bad debts. BLEND Network is demonstrating to us that it probably will react on the quicker side.
How good are BLEND Network's interest rates, bad debts and margin of safety?
With its strict lending criteria based on loan amount to property value, and zero bad debts so far, BLEND Network should be hoping for very low bad debts after recoveries. The average interest rates, should also, then, turn out to be attractive for the risks involved. However, its short history means we can't conduct ourto see how it might perform in a serious recession and/or property crash.
Has BLEND Network provided enough information to assess the risks?
BLEND Network was initially very open with 4thWay, but it has not kept up with its pledge to provide regular detailed data. This is a shame and slightly inexplicable, because I believe that the data is likely to show that its results in its first few years have been satisfactory. Without it, it leaves question marks.
Is BLEND Network profitable?
We have little information on BLEND’s financial health. It's still new, so we expect it will take some time before it becomes profitable. It received a little funding to grow the business in late 2018, but it's unclear how much.
What is BLEND Network's minimum lending amount and how many loans can I lend in?
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.
There are few loans to find, so it could take a while to spread your money across loans.
BLEND will, if you want, allow you to choose a maximum amount to be lent automatically to any one loan. For example, you could choose a limit of £1,000 per loan. This limit is per loan, not per borrower.
Does BLEND Network have an?
BLEND Network doesn't have an.
BLEND Network: key details of its lending account
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Interest rate after bad debt
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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 £21 million since 2017. Loans are mostly to fund property…Read the full review here
Independent opinion: the opinions expressed are those of the author(s) 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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