This quick Proplend review, written by one of our experts, is taken from our comparison tables, where you can see reviews on most P2P lending sites.
4thWay's Quick Expert Proplend Review
Fantastically good security backed up by steady borrower income
When did Proplend start?
Propend first approved a loan in 2014.
What interesting or unique points does Proplend have?
Proplend's biggest strength is in the security borrowers offer lenders, which is usually properties that are earning greater rent than the monthly loan payments, and whereby borrowers have strict limits to the amount they can borrow compared to the property value.
How good are its loans?
Lenders in Proplend’s “tranche A” products are protected by property security at least twice the size of the loan. It is possible to find loans where you earn over 10% interest while lending just one-third of the property value to a commercial property landlord. This is incredibly good risk coverage for lenders.
Borrowers must also make three to six months of loan payments in advance. In loans where the property is not being rented out, Proplend takes more advance payments, sometimes covering all the interest on the entire loan.
How good are Proplend's interest rates, bad debts and margin of safety?
Combined with generous interest rates, I believe the risks are very well contained and well priced depending on the risk within the loans. Its excellent security requirements on its rental property loans, and its transparency, offset the risks of its relatively high minimum lending amount.
Proplend has recently also started doing development property lending and lending against brownfield sites. While interest rates here can be very exciting, the intrinsic risks in this sort of lending are not as low as lending to against rented properties.
For development and brownfield loans, lenders might be wise to stick to tranche A and lend in fewer of them, until Proplend has demonstrated a longer and deeper record in them. Expect more of these newer kinds of loans to go bad, although recovery of bad debt should ultimately be very high at tranche A. Until we have enough data, the newer loan types are excluded from Proplend's PLUS Ratings, which are based entirely on its rental property loans.
How much experience do Proplend's key people have?
Proplend’s key team has some relevant banking experience. Although I really would like to see more experience, its rental property loans have strong, simple standards that even junior staff should be able to use to contain the risks.
Has Proplend provided enough information to assess the risks?
Proplend* is very transparent, sharing the highly detailed data we need to use bank risk-modelling and investing techniques to assess its performance.
Is Proplend profitable?
We don't have Proplend's latest figures yet, which will be for its complete financial year for 2018. But from its abbreviated accounts, its financial position appears to have improved a great deal from 2016 to 2017, and its growth and business model seems on track.
What is Proplend's minimum lending amount and how many loans can I lend in?
The minimum you can lend in each individual loan is £1,000. 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.
Auto-lend spreads your money across all tranche A loans, including development loans. If you choose to select loans manually, rather than use auto-lend, you might want to switch auto-lend on just prior to a loan you like going live. This is because a loan is sometimes completely sold to lenders using auto-lend before other lenders have a chance to take part.
Does Proplend have an IFISA?
Proplend's lending products are available as IFISAs.
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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