This page was last updated on 26 July, 2018
Here's the Kuflink review from one of 4thWay's experts:
Kuflink Quick Expert Review
Might be solid, but needs to be more up-front and clear
Established in 2016, Kuflink lenders have lent tens of millions to property developers and other property borrowers requiring short-term funding.
We don’t yet have as much information about its key processes and people than we like to receive, but it has invested an awful lot in its team; for example, hiring more than two dozen new people, with at least seven of them working in key roles for selecting borrowers and approving loans. So we expect that it will have the skills it needs to select loans well.
We know that Kuflink sets a maximum loan of 70% of the property valuation, as valued by an independent surveyor, which is highly sensible. For property developments, it is 70% of the hoped-for sales price, which is pretty standard.
Kuflink has forecast zero losses on loans to us. Although zero losses is not completely impossible with these kinds of loans for long periods of time, cautious and conservative P2P lending sites generally assume some losses.
In addition, in our experience the development lending P2P sites that suffer zero losses on loans are also the ones that have no loans that go bad in the first place. Kuflink, however, has suffered at least one bad debt.
Perhaps the biggest let-down is that Kuflink doesn’t make its record explicit and clear on an ongoing basis. For example, I found out only by digging through its FAQs page that one or more loans have gone bad. Those bad debts could still be recovered, but we expect such important information as bad-debt statistics and facts to be clear as day.
I think the information and language on Kuflink’s website does not explain the risks and rewards clearly enough to lenders.
For example, Kuflink says it “guarantees” to pay the first loss on the first 5% of any bad debt in its Auto-Invest products as well as the first 20% in its Self-Invest product.
However, it has told 4thWay that it no longer promises to either lend alongside individual lenders, nor does it set aside and segregate cash to ensure that it can always afford to pay the first loss. It appears that it will attempt to cover losses from its own pocket. Therefore the word “guarantee” doesn’t seem to me to be appropriate.
Kuflink's own financial performance as a business has been solid (although it still has some way to grow before I’d be comfortable with it “guaranteeing” things). It has been profitable in at least two of the past three years and it is also just large enough to need independent auditors of its full published company accounts, which makes it easier to assess its position.
You can either choose the loans you want to lend in for yourselves to earn higher interest rates (Kuflink Self-Invest) or you can have your money automatically lent at lower interest rates (Kuflink Auto-Invest).
In the auto-lend accounts, Kuflink will spread your money across more than one loan, although it does not specify any minimum number of loans and it doesn’t provide data on the average number of loans lenders lend in. Two of Kuflink’s auto-lend accounts are available as IFISAs.
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Independent opinion: 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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