COLLATERAL is extending cashback offers as a regular feature on its different loan products, as a recent cash incentive on a large development loan proved to be “an instant hit” with investors.
The peer-to-peer pawnbroking platform launched a “sliding-scale” cashback incentive on its largest funding round to date earlier this month, a £1.683m development loan that it managed to fill within one week thanks to the offer, a spokesperson from the firm told Peer2Peer Finance News.
Investors in that loan will receive different sums of immediate return within the next few days, varying from 0.25 per cent to four per cent depending on the size of their investment.
“It is definitely something we look to repeat on a regular basis on larger development loans, while we are launching a separate type of offer on our shorter-term loans,” the spokesperson said.
As well as more regular cashback offers, the platform is offering a two per cent premium on returns on new and existing short-term loans. This raises annualised yields to 14 per cent from 12 per cent, as a way to entice investors into the shorter-maturity side of the firm’s offering.
Meanwhile, the platform decided to switch its bank partner from NatWest to Santander, a move that it expects will guarantee a more efficient service as it gears up for further growth.
“Overall, the directors felt that they had become a number at NatWest and were being dealt with remotely without any dedicated points of contact,” the spokesperson said.
“Santander are providing Collateral with a full corporate relationship team, which NatWest wasn’t, and as we position ourselves for further growth, it represents a much more attractive and supportive proposition.”
The platform stumbled into some IT glitches last month as some investors’ withdrawals were not processed by NatWest.
The Santander team specialises in larger corporates, which means it is well equipped to process large amounts of high-speed transactions in minimal time frames, the spokesperson added.
“Obviously at that level of operations, there’s no real room for error,” the spokesperson said.