CapitalRise Review

By 4thWay Specialist on 10 April, 2022 | Read more by this author

Here's the CapitalRise review from one of 4thWay's specialists:

4thWay's Quick Expert CapitalRise Review

Continues to impress

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 £124 million since launch in 2016. A total of £168 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. 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 8.28% are likely to be very satisfactory for the risks involved.

Has CapitalRise provided enough information to assess the risks?

It has been very 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?

The minimum lending amount is high at £1,000.

CapitalRise approves just about enough facilities against unique property developments that you should be able to diversify a fair bit by dripping your money in over the course of a year. Ensure you don't lend multiple times against the same development, as and when each developer draws down the next tranche of cash for carrying out the next phase in the development work.

Does CapitalRise have an IFISA?

CapitalRise's loans are available in IFISAs.

Other info

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.

Visit CapitalRise.

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

We are not financial advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.

The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

Our service is free to you. We don't receive commission from the above-mentioned companies. We receive commission from some other P2P lending companies when you click through from our website and open accounts with them. This doesn't affect our editorial independence. Read How we earn money fairly with your help.