PEER-TO-PEER pawnbroker Unbolted has quashed speculation that it is moving into property lending.
The fully regulated platform, which provides loans secured on assets such as fine wine or classic cars for individuals and equipment or stock for small businesses, has written to lenders about issuing a business loan with a second charge on a property.
Investors on the P2P Independent Forum expressed concerns that this was a sign of the platform moving into property loans, a route that Collateral, now in administration, took at the end of last year.
Co-founder Rito Haldar told Peer2Peer Finance News that while this was the first time a property was being taken as security, the platform would not be expanding into property lending.
“The loan that is being contemplated is a business loan, but secured on property with a low loan-to-value (LTV),” Haldar said.
“This is different to our usual loans in that we are taking security on a property and not on movable chattels.
“But aside from that we certainly have no plans to enter into vanilla property loans that are prevalent across other platforms, such as development loans or buy-to-let loans or bridging loans.”
Haldar added that the platform may take property as a security in the future if they are comfortable that the cash flows from the business can sustain the repayment on the loan.
“We are not going to compete with any of the existing platforms on development or bridging loans,” Haldar said.
“We will always insist that legal title is clear, documentation is prepared by qualified and reputed lawyers and charges are taken with consent of first charge lender along with deed of priority, so repossession is efficient.
“Even then we will ensure low LTV to provide enough interest cover as we in the event of default, we would expect repossession and sale to take some time.”
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