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 is available to sophisticated/wealthy investors only
So to use it you need to have:
- Invested in an unlisted company in the past 12 months (such as through crowdfunding websites).
- Or you need an income of at least £100,000 or savings and assets excluding your own home worth £250,000.
- Or you need to be a professional investor or have been one in the past two years.
When did CapitalRise start?
Lenders through CapitalRise have lent £71 million since launch in 2016. A total of £105 million in facilities has been agreed with borrowers, who are property developers.
What interesting or unique points does CapitalRise have?
CapitalRise's focus is prime central London development properties, which is a nice niche for lenders to consider putting some lending in.
How good are its loans?
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 for the typical lender, if not every lender all the time.
How much experience do CapitalRise's key people have?
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.
CapitalRise review: lending processes
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.
How good are CapitalRise's interest rates, bad debts and margin of safety?
Lenders mostly lend in senior loans – meaning you get your money back first in the event a loan goes bad.
Previously, CapitalRise approved more junior loans – meaning other banks will get repaid first. While CapitalRise might still approve some junior loans, 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.
Across all its loans, I believe interest rates of around 8.64% are likely to be very satisfactory for the risks involved.
Has CapitalRise provided enough information to assess the risks?
It has been transparent with 4thWay, providing reassuringly full information on almost all aspects of its business.
Is CapitalRise profitable?
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.
What is CapitalRise's minimum lending amount and how many loans can I lend in?
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.
Does CapitalRise have an IFISA?
CapitalRise's loans are available in IFISAs.
CapitalRise used to offer a non-lending product – an equity product – whereby you can share in the profits of selling developments rather like you are one of the development's owners. This product has been discontinued. 4thWay does not assess equity investments, which are higher risk than lending.
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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