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Invest & Fund Review
A mature provider that had the best pandemic performance. It continues its record of no losses and negligible problem loans.
Invest & Fund Lending Account received an Exceptional 3/3 4thWay PLUS Rating.
This account has been paying 8.74% after fees and bad debts in the regular P2P lending account after fees. It pays 8.24% in the IFISA, due to slightly higher fees.
Visit Invest & Fund* or keep reading the Invest & Fund Review.
What is Invest & Fund?
Invest & Fund* offers you residential bridging and development lending, usually between £500,000 and £3.5 million per loan, although it has breached £6 million. The planned terms are usually 18 months or less, sometimes reaching 24 months.
When did Invest & Fund start?
Invest & Fund started doing P2P property loans in 2015. Total lending is now £286 million.
What interesting or unique points does Invest & Fund have?
Invest & Fund has an impeccable record of developments completing within the loan schedule. Despite its long history, a mere handful of loans have gone three months or more past their initial planned end date, and all of those repaid in full.
While that record can’t last forever, it’s a remarkable achievement.
Invest & Fund review: how good are its loans?
Invest & Fund* focuses entirely on residential properties, which makes it easier to assess loans and build further on the experience of Invest & Fund’s people. It also lowers the risks when compared to commercial property (shops, offices and such), which is intrinsically riskier.
The highest ever loan size compared to the property value on Invest & Fund’s bridging loans reached 86%. This is on the high side for these short-term property loans.
Yet Invest & Fund is relatively cautious on bridging loans, rarely approving one that hasn’t recently reached practical development completion. This is a distinguishing feature that puts Invest & Fund’s bridging loans at the safer end overall.
Just six bridging loans are outstanding with 52 repaid.
Nearly one in ten Invest & Fund loans have been junior loans, paying 15%-25%. Junior loans rank behind other loans if a borrower is unable to repay and the property has to be sold. Therefore they usually come with substantially higher risks of large losses in the event of the loans turning bad.
But Invest & Fund only offers junior loans to existing developer borrowers and under limited circumstances. Now, in the second half of 2023, there are just five small junior loans outstanding, as all the rest have been repaid in full.
The highest ever approved development loan size compared to the expected sale price of the completed development is 86%. This is a high upper limit, although it only happens on a few junior loans and it’s not so unusual in those circumstances.
More importantly, Invest & Fund usually caps the amount lent at 65%, so the average lies at 63.75%. That’s a great average.
Invest & Fund wants developers to have a lot of skin in the game compared to many other development lenders. Usually, loans can be for no more than 80% of the total costs of the building project, which is at the better end.
Invest & Fund plans for a long runway, ensuring that the length of the loan gives the developers plenty of time to complete and that they can manage the cost of building and sale delays, and the interest building on the loan. This has successfully reduced the risk of building project overruns.
Even developments of just half a million to £1.5 million can have terms of 24 months, which is long. That’s fairly remarkable.
Just a handful of loans have ever been rolled into new ones. This is far less than you usually expect for lending of this type, and is a further sign of very healthy loans.
How much experience do Invest & Fund’s key people have?
In previous updates to the Invest & Fund Review, I noted that I was satisfied with the breadth of experience in property lending and risk analysis.
4thWay’s extensive research and interviews with the Invest & Fund* team has shown many decades of relevant experience between them, including at a senior level at major banks.
In 2023, all I can add on the people is that they have since then got an additional highly experienced person to the team.
Invest & Fund review: lending processes
Invest & Fund has high-quality processes for checking these kinds of loans, looking into the borrowers themselves, financial accounts, the development sales plan, any important contractors, and proof that previous, similar developments were completed as expected.
The property is always physically inspected, which is not the case at all P2P lending companies. It ensures better and more consistent standards, lowering the risk of suffering a loss. It reduces the number of loans that are approved that ought not to have been, which shows in the lending results.
Invest & Fund* generally avoids areas where the property market is widely considered to be over-heated, such as central London.
Invest & Fund’s borrower- and development-monitoring practices are equally top-notch and comprehensive.
A development is not fully funded by Invest & Fund lenders in advance, and then drawn down by the borrower. As and when each tranche of the development loan is required, Invest & Fund asks individual lenders to fund it.
That’s not ideal, as it means that potentially a development might go wrong if lenders suddenly withdraw from lending. However, Invest & Fund’s strong record even during the pandemic, alongside its other sources of cash, such as from financial institutions, gives reassurance.
We would ideally like to see Invest & Fund more routinely request that a borrower prepares a plan B in case its initial plan to repay the loan falls through. However, with its excellent record of full repayments, it’s potentially overkill in this case.
Also, Invest & Fund’s key rainmaker clearly has a lot of experience in helping borrowers to come up with improved plans if trouble hits. I expect they’ll be able to help with alternative plans as and when it becomes necessary.
Very critical for these kinds of loans, Invest & Fund has demonstrated that it takes action quickly if a loan shows even small signs of having any issues. It has suitable processes in place to deal with the recovery of bad debt.
How good are Invest & Fund’s interest rates, bad debts and margin of safety?
Lending rates are currently 8.74% after fees and bad debts in its ordinary lending account and 8.24% in its IFISA account, due to slightly higher fees in the ISA.
When loans have any specific issues counter to the loan agreement, Invest & Fund* pays lenders over double the standard lending rate to compensate for the increased risk. It’s good to see that lenders are paid the penalty interest, which is not always the case.
Penalty rates aside, its lending rates came down over the years to better align with lower risks. However, its rates have picked up again to match the wider trend throughout 2023, boosting them to very attractive levels for the risks involved.
Invest & Fund has achieved our top 4thWay PLUS Rating of 3/3, “Exceptional”. The 4thWay PLUS Rating shows that lenders spreading their money across many loans and in half-a-dozen lending accounts of this calibre can strongly expect to make money, even through a very severe recession and property crash.
Last year, Invest & Fund’s increasing maturity and lengthening perfect record saw its 4thWay Risk Score improve from a very good 5/10 to a rarely awarded 4/10. This is despite the fact that we have just tightened our methodology even further. This projects overall losses before interest of under 5% in a major recession and property crash.
Annual interest easily covers our projections under very harsh economic conditions. Lenders clearly have an excellent margin of safety when spreading their money across lots of these loans.
No other bridging and development P2P lending companies performed better than Invest & Fund on loans outstanding during the pandemic years.
Has Invest & Fund provided enough information to assess the risks?
Invest & Fund* was badgered by 4thWay even more than average, and over a longer period, and yet very patiently provided detailed data, answers to our questions and access for interviews.
It has continued over the years to provide substantial additional answers and data.
Invest & Fund is amongst the most transparent P2P lending companies, making it easy to do a detailed assessment of its people, processes and performance.
While 4thWay receives more than it needs, Invest & Fund could provide more up-to-date information and statistics to prospective lenders on its own website.
Is Invest & Fund profitable?
As of Invest & Fund’s most recently filed and audited accounts, it’s still loss making, although this is typical at this stage in its growth.
What can you tell me about Invest & Fund’s cybersecurity?
Since I last updated the Invest & Fund Review, its cybersecurity has improved: it now automatically redirects you to the secure version of its website if you go to the insecure one.
Invest & Fund’s website technology is up-to-date, doesn’t appear to have malware and is showing as clean by Google Sage Browsing, McAfee and Yandex. The website is secure and carries a valid security certificate, helping to protect you when you supply your personal data.
It’s unclear whether Invest & Fund is automatically monitoring for hacking and malware activity, although it informs us it has a firewall in place to prevent hacks.
This assessment is not based on a full attempt to hack into the website, but rather on broader scans from our security provider Sucuri, which is less precise.
Is Invest & Fund a good investment?
Invest & Fund* is a good investment that would fit well in almost any portfolio of P2P lending accounts.
What is Invest & Fund’s minimum lending amount and how many loans can I lend in?
The minimum you can put into Invest & Fund is £2,500.
No more than 10% of the money you put into Invest & Fund can ever be put into a single loan, even if there are not currently enough loans available.
While this could mean some money remains unlent a little longer, it’s responsible from Invest & Fund, considering that with many providers you can theoretically pile all your money into one loan.
The minimum that you can lend in a single loan is £250.
Most lenders usually have their money lent and diversified automatically. You can select loans for yourself if you’re a self-certified sophisticated lender, high-net worth investor, elective professional lender or per se professional lender.
Does Invest & Fund have an IFISA?
Invest & Fund’s account is available as an IFISA. It’s exactly the same as its non-IFISA product, except that, unusually, it has slightly higher fees. Those fees effectively reduce your lending rate by half a percentage point.
Can I sell Invest & Fund loans to exit early?
Yes, you can sell your loans to other lenders for a fee of 0.25%.
Thank you for reading the Invest & Fund Review! Visit Invest & Fund*.
Invest & Fund: key details
4thWay PLUS Rating
3 PLUSes is best. What does the 4thWay PLUS Rating tell you about the risks and rewards?
Interest rate after bad debt
Here we show the P2P lending site's own estimate (or 4thWay's if theirs are not appropriate)
4thWay Risk Score
Lower Risk Scores are better. How is this different to the 4thWay PLUS Rating?
£286 m in development property lending & short-term property (bridging) loans since 2015, with early exit. Minimum investment is £2.5k. Auto-lend & auto-diversification as standard; self-select option for high-net worth or sophisticated lenders
Minimum lending amount
Exit fees - if you sell loans before borrowers fully repay
Early exit is not guaranteed. Usually, other lenders need to buy your loans
Do you get all your money back if you exit early?
Loan size compared to security value
Reserve fund size as % of outstanding loans
Company/directors lend alongside you/first loss
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.
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The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. The ratings assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.
The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.
*Commission, fees and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from Invest & Fund and other P2P lending companies not mentioned above either when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.