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Crowd2Fund Review

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By on 24 April, 2018 | Read more by this author

Here is a Quick Expert Crowd2Fund Review from one of our experts.

4thWay's Quick Expert Crowd2Fund Review

Fine early results; interesting model for finding prime borrowers

Crowd2Fund*, which started in 2015, is still small, barely hitting eight figures in lending, but it is growing rapidly and offering more and more lending opportunities. Its products are available in an IFISA.

You can lend in Crowd2Fund’s business loans and receive monthly loan and interest repayments. You can also lend to businesses through bonds, whereby you receive interest only each month and get your entire loan back at the end. Finally, Crowd2Fund offers you “revenue loans”, which means the borrower pays back more or less each month based on how much the business borrower is making. Bond interest rates are higher than business loans and revenue-loan rates are higher than bond rates, because of the extra risks.

While Crowd2Fund has a key person with at least some directly relevant experience in business lending, we would like to see it hire more experience. Its processes for borrower selection include most things we would expect, with a focus on accepting businesses that are making enough money each month to meet loan repayments – and then some. It offers loans to businesses with a minimum 18 month's trading history, which is roughly in line with bank business lending.

Crowd2Fund says it attracts quality borrowers, uniquely, by actively contacting healthy businesses and encouraging them to borrow to fund new projects, i.e. it doesn’t do loans to help businesses struggling to cover costs.

We want to see Crowd2Fund start to do risk modelling based on numerical data. We expect this for business loans platforms.

Crowd2Fund is slightly above average on transparency, sharing a fair amount of information with us, but we would like to see more detailed data.

Crowd2Fund* has low bad debts. It has a more sizeable number of late loans in the pipeline. If we assume many of those will go bad its record might still be reasonable and typical of an average small business lender. However, again, more data from Crowd2Fund would help us spot any potential risks for lenders before many of the young, outstanding loans become more mature and mostly paid off. If it maintains its record, the interest rates should prove satisfactory for the average lender through Crowd2Fund.

Crowd2Fund is new and its far from clear whether it will grow quickly enough to survive. That said, as a regulated platform it must have plans in place and cash set aside to wind down existing loans in the event it goes bust.

Crowd2Fund also offers an investment product where you can buy shares in businesses and another where you can make donations. We do not analyse those two products simply because they are not P2P lending.

We mentioned before that Crowd2Fund's CEO had borrowed money from the company himself, but he has now paid that £100,000 loan back.

Visit Crowd2Fund*.

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.

Experts, journalists and bloggers 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.

*Commission and impartial research: our service is free to you. We already show dozens of P2P lending companies in our accurate comparison tables and we keep adding more as soon as they provide us with enough details. We receive compensation from Crowd2Fund and other P2P lending companies not mentioned above when you click through from our website and open accounts with them. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

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Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

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Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
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