Here's the CapitalRise review from one of 4thWay's experts:
4thWay's Quick Expert CapitalRise Review
Will be surprised if this one isn't a good'un
CapitalRise* has completed over £20 million since launch in 2014. The key decision-maker has both a long history heading over 100 developments with a high rate of return, as well as a seemingly keen interest and experience in the mathematical and analytical side of lending and risk management, which is a rare combination for these types of loans.
The rest of the impressive team appears to have a huge amount of relevant experience and training, which is far from a given in specialist property P2P lending.
The checks that borrowers and developments have to go through before CapitalRise will approve a loan are impressive and as expected for a team of this calibre and for these kinds of loans. Only a small proportion of borrowers are allowed to lend through CapitalRise.
CapitalRise's focus is prime central London properties, which is a nice niche for lenders to consider putting some lending in.
Lenders can lend in senior loans – meaning you get your money back first in the event a loan goes bad. But more often you will lend in junior loans – meaning other banks will get repaid first.
There have been no bad debts as yet. Although days are still young, CapitalRise forecasts no losses to lenders due to its strict criteria and, while this remains to be seen, I find that forecast plausible. Interest rates of around 9.8%, then, are likely to be very satisfactory for the risks involved.
Lenders should however remember that CapitalRise's junior loans are not low-risk loans and CapitalRise's history is short, which indicates that lenders should lend a small proportion of their lending pot in each loan.
It has been transparent with 4thWay, providing reassuringly full information on almost all aspects of its business.
CapitalRise's* most recently filed company accounts show it is not yet profitable. That said, I see no reason to be concerned at this stage. I expect it will be some years before CapitalRise turns a profit, which is normal for a P2P startup.
CapitalRise offers a non-lending product – an equity product – whereby you an share in the profits of selling developments rather like you are one of the development's owners. 4thWay does not assess equity investments, which are higher risk than lending.
At present, there are not many opportunities to lend, so don't forget to spread your money across many other P2P lending sites as usual. The minimum lending amount is high at £1,000.
CapitalRise's loans are available in IFISAs.
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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