HNW Lending’s Manual Property & Asset Lending Account, averaging LTV after directors taking first loss, received an Exceptional 3/3 4thWay PLUS Rating. This manual lending account is paying around interest and the average lent is just of the valuation of the borrowers’ properties. Its auto-lend account…
This review is temporarily down Normally, when 4thWay’s specialists reassess peer-to-peer lending providers and other online direct lending providers on behalf of individual lenders, the new assessment is put up on the 4thWay website with no downtime in between. However, perhaps once per year on…
Housemartin’s P2P Lending Account And IFISA And Classic Account has earned an Exceptional 3/3 4thWay PLUS Rating. These loans have been paying lenders around of the loan amount in interest, after bad debts. Visit Housemartin* or keep reading the Housemartin Review.
Lendwise’s lending accounts are unrated. These loans are expected to pay lenders around after bad debts. Visit Lendwise or keep reading the Lendwise Review.
Loanpad’s Premium Account/Premium IFISA received an Exceptional 3/3 4thWay PLUS Rating. This account has been paying interest after zero bad debts. Visit Loanpad* or keep reading the Loanpad Review.
Proplend’s Tranche A, 0-50% LTV Lending Against Property Mostly Receiving Rent received an Exceptional 3/3 4thWay PLUS Rating. These loans have been paying interest after bad debts. Visit Proplend* or keep reading the Proplend Review.
Kuflink’s Auto-Invest 2 Year Account received an Exceptional 3/3 4thWay PLUS Rating. This account has been paying interest. Visit Kuflink* or keep reading the Kuflink Review.
Both Invest & Funds accounts received an Exceptional 3/3 4thWay PLUS Rating. The standard account and the IFISA have been paying . Visit Invest & Fund* or keep reading the Invest & Fund Review.
What are the best Innovative Finance ISAs? The best innovative finance ISAs are these nine, which offer a market-leading risk-reward balance: CapitalRise IFISA. (Minimum £1,000 per loan.) CapitalStackers IFISA. (Minimum £2,500 per loan.) Housemartin IFISA. (Minimum £1 per loan.) Invest & Fund IFISA. (Minimum £2,500,…
CapitalStackers’ Property Lending Account/IFISA currently has two alt ratings of secured and hidden gem, as we have no doubt it will receive the top 4thWay PLUS Rating soon, when its history is sufficient. These loans have been paying lenders an average interest after bad debts. Visit…
CapitalRise’s Bridging & Development Loans have earned the Exceptional 3/3 4thWay PLUS Rating. These loans have been paying lenders around interest after bad debts. Visit CapitalRise* or keep reading the CapitalRise Review.
Lande* was the first ever P2P lending company in either the eurozone or continental Europe to be fully assessed by 4thWay. What does Lande do? Lande’s borrowers are Latvian, Lithuanian and Romanian businesses – mostly farmers. The loans usually secured on the farmer’s land or…
With double-digit realised gains so far, returns of 20%+ highly possible, and being unaligned with recessions and property crashes, why wouldn’t you consider this opportunity? Before you read on, AxiaFunder is available to you only if you have invested at least £10,000 in unlisted investments…
Blend’s Development And Property-Secured Business Loans are unrated, due to lack of information. These loans have been paying lenders around . Visit Blend or keep reading the Blend Review.
Somo’s Bridging Lending Account received an Exceptional 3/3 4thWay PLUS Rating. These loans have been paying lenders . That’s before bad debts, although historically losses have been virtually zero. Visit Somo* or keep reading the Somo Review.
Unbolted’s IFISA And Classic Account are Unrated, because we don’t receive sufficient data to conduct our full assessments. Unbolted only sporadically provides information and data to 4thWay. The last time we could assess them, lenders were on course to earn around after bad debts, if…
Crowd2Fund’s Business & Property Lending is unrated, due to lack of information. There’s not enough info to calculate the annualised interest rate earned by lenders after bad debts. Visit Crowd2Fund or keep reading the Crowd2Fund Review.
Sourced Capital’s Bridging & Development loans are currently unrated, due to not enough information being provided. This account has been paying lenders in the region of interest after bad debts. Visit Sourced Capital or keep reading the Sourced Capital Review.
FOLK2FOLK’s Property-Backed Business Lending Account/IFISA unrated, due to lack of information. This account has been paying in the region of interest after zero losses to lenders. Visit FOLK2FOLK or keep reading the FOLK2FOLK Review.
Downing Crowd’s Senior Property & Renewable Energy Lending is unrated, due to lack of information. These loans have been paying lenders around interest before bad debts. Visit Downing Crowd or keep reading the Downing Crowd Review.
Downing Crowd does loans to UK businesses that own property or energy projects, including businesses developing property. It’s looking at typical interest rates for lenders before bad debts of 7.00%.
It also enables you to lend to residential property developers, typically for large developments of dozens of housing units, provided you are classed as a high-net worth or sophisticated investor.
Downing has been lending investors’ money since 2010. Its peer-to-peer lending branch opened in 2016, where individuals have lent £240 million.
Downing Crowd is part of a much larger, highly profitable business that has existed since the 80s and that collectively manages around £2 billion in investments.
Its loans are to such trading businesses as pubs and care homes, typically for renovation and expansion, or to renewable energy businesses with working installations that receive taxpayer-funded subsidies.
Borrowers usually have a profitable history and earn an income already, which can lower the risk of a loan falling into trouble. The income isn’t necessarily high enough to get a bank loan the size that Downing offers, so Downing caps the loan at 75% of its internal valuation of the property or renewable plant, which is reasonable. Valuations here aren’t always easy; property or plant sales could reduce losses on a bad debt, but not always eliminate them entirely.
For development lending, the cap is 70% of the hoped-for sale price of the completed developments. Downing Crowd claims the average has recently been a little over 60%. Both of these ratios are comparably good.
Downing cherry picks the loans that it funnels to its P2P arm from its wider business to contain the risk for lenders. A long time ago, Downing Crowd provided data showing that the first cherry-picked loans it put on its P2P platform were probably high quality. But we have not received any data since then.
Downing Crowd has approved the same kinds of loans for a decade and its people have complementary skills, including property loan approvals, development lending and renewable energy.
It was convincing about its experience when we conducted our interviews with it many years ago. However, with team changes and no successful contact with Downing for sometime, there’s no-one left there who we have interviewed directly.
Some years ago, we talked to Downing Crowd about many of its processes in lending, loan-monitoring and bad-debt collection, and we took information and data to back it up. We thought it had in place some capable and professional lending operations.
While we are unable to get an update on that, it’s more likely than not that its processes have remained robust.
It also outlined its credit-risk modelling, which is a technique for containing risks that’s not always applied – and harder to do – for many of the types of loans that Downing Crowd does, but it’s good to see.
Very old, detailed data we obtained showed good results. Potentially as few as seven out of every 100 borrowers suffered problems and less than 4% of debt was written off. That was highly satisfactory compared to similar competitors. We can no longer assume that its results have continued that trajectory as its online lending platform has matured.
While access and detailed data and supporting evidence is needed for a proper assessment of its online lending results, we can still glance at the summary statistics of its results that it publishes on its website.
According to those stats, it has a good track record in lending in the following sectors: pub and leisure, care homes, energy and property development.
In the following sectors, lending is either too new or borrowers have continued to repeat borrow, and so not enough have come to their final conclusion: wholesale finance, multi-sector and “other”.
Lending interest rates are low at Downing Crowd compared to similar competitors. It’s not possible any more to establish whether they are appropriate for the risks.
Downing Crowd was extremely open with 4thWay for our initial detailed assessment of it, providing all the data, information and interviews we requested.
While we initially received a great deal of information from Downing Crowd, we have not had a detailed data update since 2018.
For some years now, Downing Crowd hasn’t responded to our requests for basic information to enable a superficial assessment of its performance and the risks of bad debts, or answered our ad-hoc questions, nor have we had any interviews with its key people.
Downing Crowd doesn’t provide 4thWay or the general public with regular, highly detailed updates on the ongoing performance of its loans. We don’t know how many loans are having trouble, with recovery procedures happening.
Downing Crowd is owned by Downing LLP, an investment manager that has made annual profits of £3-£12 million in recent years and has been profitable for all or most of the past 14 years at least. This provides lenders good safety in the event Downing Crowd needs to be wound down.
As we’re missing all the information we need to give any assessment of risk and performance, in 2022 I’ve not gone through the company filings for every single company related to this group, as there are a large number of subsidiaries.
However, I read the most recently filed audited accounts of the parent company, which show over £7 million net profit in 2021. It has plenty of cash and assets outweighing debts.
A soft probe of Downing Crowd’s cybersecurity from our security provider has shown its website is likely to be well programmed from a security standpoint, with negligible issues.
It appears to be malware free and is marked clean by Sucuri, Google Safe Browsing and others.
However, Downing Crowd has not responded to our requests for information about whether it takes some of the expected safeguards, such as firewalls, regular website monitoring or independent analysis of its security.
My best guess, if pressed, is that Downing Crowd is still a good investment, but guesses aren’t good enough. Downing Crowd needs to provide more information for potential lenders to make a more sensible decision.
The minimum loan is £500. You need to choose your own loans.
The last data we received – an age ago – showed there aren’t a huge number of loans to choose from. But, if it’s continued to approve a similar number of loans, over the course of a year I expect you could spread sufficiently across one or two dozen borrowers.
Downing Crowd’s loans are available in an IFISA.
Not easily. There’s no online market for buying and selling.
You would need to find another Downing Crowd lender who wants to buy and ask Downing Crowd to trade the loan manually, for a £25 fee. The amount that the buyer pays for your loan parts is agreed between you (e.g. if the buyer wants to pay less as the loan is now considered more risky.)
Downing Crowd also has offered a product that blends lending with part-ownership in property. Plus, it might still sell fixed-rate bonds that involve lending to other Downing group companies or to businesses it owns. These are not always peer-to-peer lending and are outside 4thWay’s scope. Consider lending in just one loan where Downing is the borrower.
The legal structure is what protects you from seeing your money going off to pay the P2P lending company’s own debts, if it was to go bust. So long as the structure is legally correct, and the provider operates those structures correctly in practice, your loans are ringfenced from the likes of Barclays taking a slice from you to pay off what the provider owes it.
We only note legal structure for you when a P2P lending company doesn’t use the standard “P2P agreements”. While Downing Crowd has had permission from the regulator to offer those agreements in the past, it has never used them.
Currently, it uses permissions related to the FCA’s debt-based investments regime. Rather than being called loans, Downing Crowd’s bonds are technically known as “non-readily realisable securities”.
Cutting short the mumbo-jumbo, the important point is that Downing Crowd is so structured that it never has any right to the loan, or any part of your loan repayments or interest, except for receiving its fees and costs agreed with you.
The bottom line is that there’s no perceptible difference in risk between this and a standard P2P agreement in terms of protecting lenders from Downing Crowd going bust.
Visit Downing Crowd.
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.
We are not financial, legal or tax advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.
The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by ESMA or the FCA. All the specialists and researchers 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.
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