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
Proplend's biggest strength is in the 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.
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 the minority of loans where the property is not being rented out, Proplend takes more advance payments, sometimes covering all the interest on the entire loan.
Combined with generous interest rates, we believe the risks are very well contained. Proplend* is very transparent, sharing the highly detailed data we need to use bank risk-modelling and investing techniques to assess its performance. We believe that its excellent security requirements and transparency offset the risks of it being a small platform and of its minimum lending amount, which is fairly high at £1,000. Proplend’s key team has relevant banking experience.
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.
Proplend has recently also started doing development property lending and lending against brownfield sites. The intrinsic risks in this sort of lending are not as low as lending to against rented properties. Lenders would be wise to stick to Proplend's rented property loans until Proplend has demonstrated a longer and deeper record in these newer loans. 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.
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 Proplend 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.