Peer-to-peer lending, or P2P, also called loan-based crowdfunding, involves individuals lending money directly to another individual as a borrower in return for interest payments and a repayment of their capital. The lending and borrowing takes place on an internet platform that allows borrowers to raise money, and lenders to provide that money. Peer-to-business lending, or P2B, means that the individual lenders don't lend to another individual but to a business. The money lent is invested in that business.
Today, multiple opportunities for loan-based crowdfunding exist. For example, you can lend to consumers who want to buy a car, a kitchen or an engagement ring. You can also lend to businesses who might want to invest in tools or office equipment. When lending to a consumer or to a business, the lender will often not have the benefit of having a loan secured by an asset. If you lend through Credit Peers, you will make a loan that will be invested in real estate and every loan you make will be secured against a legal charge on the property financed with your money. We ring-fence the property from the rest of the borrower’s business. That means we can repossess the property, and sell it in the open market on behalf of the lenders should a borrower become unable to observe their obligations under the loan agreement. In our opinion, this sets peer-to-business property lending with Credit Peers apart from other forms of peer-to-peer lending or loan-based crowdfunding.
The fundamental difference between equity crowdfunding and loan-based crowdfunding is that with the former, an investor becomes a shareholder and thereby a co-owner of an asset – say a company or a property. With loan-based crowdfunding, you make a loan and become a lender to an owner of an asset. Credit Peers only facilitates loans when the borrower, i.e. the owner of the property, has invested his own equity to finance the property investment. As a lender you are protected by this equity, as it is always the first to be written off. Debt is described as senior to the borrower’s equity and the equity acts like a cushion that protects your loan. But please be reminded that whilst your loan is secured against property, your capital is still at risk.
Yes, peer-to-business lending is regulated by the Financial Conduct Authority (FCA). The UK is one of very few European countries to have regulation in place specifically aimed at loan-based crowdfunding and the firms running peer-to-business platforms. At Credit Peers we take these rules seriously, as we are convinced that following these rules benefits our customers and therefore our industry.
The FCA's rules are aimed at protecting peer-to-business lenders. Therefore, the FCA observes closely that lenders have access to clear information to assess potential risks and to understand borrowers. Furthermore, firms operating in this market must observe core consumer protection requirements as well as certain aspects of the client money rules in relation to monies received from lenders, and in respect of receipt of borrowers’ repayments and the distribution of these funds to lenders. In addition, peer-to-business lending platforms have to maintain a minimum capital requirement. Last but not least, the FCA requires peer-to-peer platforms to have contingency plans in place to ensure that, in the event of the platform collapsing, interest and loan repayments will continue to be collected, so that those lending money do not lose out.
Credit Peers is a peer-to-business property lending platform founded by a team of professionals with substantial experience in real estate and finance. You can learn more about us here. The Financial Conduct Authority (FCA) calls what we do ‘loan-based crowdfunding’ and our website an 'electronic system in relation to lending'. We like to call it the lending revolution.
As we take all regulatory duties very seriously, we also look after your data carefully. Credit Peers is of course registered with the Information Commissioner's Office under the reference ZA155085. All personal data that you submit to us is only used for purposes directly related to enabling you to lend and borrow through the Credit Peers’ platform. We use the data primarily to confirm the identity of every one of our customers in order to prevent fraud, money-laundering or other activities that are prohibited by law. Under special circumstances we might ask for additional information to positively conclude such identity checks.
Yes you can. Please have a look at our complaints procedure here.
Loans facilitated by Credit Peers offer you the chance to earn returns on your money that can be higher than those returns available from other financial products that are secured against collateral – in our case property. In addition, we require every one of the borrowers to prove their experience and track record, as well as investing their own money as equity. There are more substantial reasons to consider here. Please consider the risk associated with making a loan, even if your money is secured against property.
Credit Peers is an online platform that allows lenders to provide loans to experienced, professional property investors and developers, as borrowers. Loans provided are secured against property assets, by either a first or second legal charge.
Once you are registered you will be able to browse through the featured lending opportunities in the Properties section of the website and decide which opportunity you like. Alternatively, the Automatch section of the website features Loan Books which contain pre-defined lending criteria for you to choose. The lending process is conducted completely online via the Credit Peers’ website.
For further information and how to lend please click here.
You can join easily online by clicking ‘Join Credit Peers’ and completing the application process.
If for any reason you encounter difficulties while registering, please do not hesitate to send us a message and we will resolve the issue.
Yes. Opening your account with us and lending is free.
Even funding your Credit Peers’ Account from your bank account is free. Though, should you choose to fund your account by debit or credit card you will have to cover the third party fees for transferring money to your Credit Peers Account.
Any person of at least 18 (eighteen) years of age, legally competent, as well as any corporate entity, resident of, or registered in a European Union Member State, or in a State party to the agreement on the European Economic Area, can request to open an account with us. A person will be deemed to be acting exclusively for non-professional purposes.
A corporate entity can also have an account with Credit Peers as long as the legal contact is fully incorporated and registered, and has a legal and administrative seat in a European Union Member State, or in a State party to the agreement on the European Economic Area.
When you sign up as an individual you will have to provide us with the following information in order for us to comply with Know-Your-Customer regulations, and to fulfil our legal Anti Money Laundering obligations.
As an individual you will be asked to provide your family name, first name, email address, date of birth and nationality, as well as a scan or picture of a valid, official identity document (e.g. identity card, driving licence, or a passport for nationals of a country outside the European Union), and on request, a proof of residence which is less than 3 months old.
In addition, we will ask you to confirm your investor status, as listed and defined for regulatory purposes.
If you encounter difficulties while registering, please do not hesitate to send us a message and we will endeavour to resolve it.
For a company we will require the company’s name, registered office address, business description and the personal information of one company director. Additionally, you will be asked to provide a picture or a scan of an identification document for this director.
Please get in contact with us if you would like to lend through a company.
We offer two ways to lend money through Credit Peers: to individual Properties or via Automatch.
Within our Properties section you can hand-pick a specific property that you might be interested in, by browsing through the available lending opportunities.
Alternatively, Automatch provides the convenience of selecting a specific set of criteria as advertised on the Website. We call these criteria Loan Books. A Loan Book will be defined by loan to value ratios, loan term durations, and also an indicative rate of return. Once you choose a Loan Book, the amount you allocate to that specific Loan Book will be earmarked as reserved in your Credit Peers Account, and will be automatically matched with the next available loan made from the Loan Book.
Whether a lending opportunity is listed in the Properties section or in the Automatch Loan Books will be determined by a number of factors including: property characteristics, structure and pricing of the loan, loan to value ratio, and lead time to funding drawdown by the borrower.
When you choose one of the Loan Books from the Automatch option you become eligible to be matched or assigned to the next available loan made within the respective Loan Book. Your eligibility for a loan depends on the timing of when you allocate your funds to the Loan Book, and the level of funding still required for that particular loan.
In cases where the term of the loan to which your funds have been matched, exceeds the term of your chosen Loan Book, we will use our best efforts to replace your loan with another lender at the end of your chosen term. Please be aware that our ability to do so will be subject to the availability of funds on the Platform that match the relevant parameters. If there are insufficient funds available on the Platform, your money will be returned to you when the borrower repays their loan, which may take longer than the term you selected. In cases where the term of the loan to which your funds have been matched, is shorter than the term you selected, your loan may be repaid early. If this happens, the sum paid back to you will be dealt with in accordance with the re-investment settings you have selected in your Credit Peers Account.
When you choose the re-investment option for funds allocated to an Automatch Loan Book, all allocated funds will be re-invested automatically in the same Automatch Loan Book (provided it is still open for funds), as soon as your funds become available again, including any interest earned. Such funds from the re-investment option enjoy complete or partial preference in the same Automatch Loan Book, and will subsequently be matched before any newly allocated funds.
All borrowers on the Credit Peers’ platform will typically have a substantial track record in their particular field of the real estate market and have operated with their current company for at least three years. Credit Peers’ borrowers will be able to prove experience in acquiring, managing, developing and/or reselling real estate.
We are not focused on a particular class of property. Credit Peers provides lending opportunities across a variety of property types, including but not limited to, residential, office, retail, industrial, logistics and hospitality. We will also provide lending opportunities with varying degrees of risk – from stabilised, cash yielding assets to ground-up developments.
Credit Peers assesses each loan application on the basis of the borrower’s experience, track record, creditworthiness and the value of the asset that will be security for the loan. As former property bankers and real estate investors, we understand the business behind a property and look at the fundamentals of the opportunity to assess the risk of each and every loan. In general, loans with a higher interest rate may carry more risk than those with lower interest rates, and therefore the risk of a loss of capital may be greater.
Once we have a good understanding of the loan application and the business, we will undertake detailed due diligence on the company and its directors, and on the asset that will serve as security for the loan, to make sure that there are no unknown legal, accounting, tax or environmental risks. Each property will be valued by a Chartered Surveyor of the Royal Institution of Chartered Surveyors (RICS) to provide an indication of its market value. It is important to note that the valuation is a matter of the independent RICS valuer’s professional opinion.
Credit Peers’ credit committee will only make a loan available for lending, once we fully understand and are satisfied with the business fundamentals behind a loan application; the due diligence has been concluded satisfactorily; and the result of the property appraisal supports the valuation.
For a positive decision by Credit Peers credit committee the application must fulfil all the mandatory lending criteria: the borrower needs to be an incorporated company which holds the title to the property that serves as security for the loan (usually this will be a Special Purpose Vehicle or SPV); the borrower will need to hold a current account and provide orderly filed accounts; the directors and the shareholders of the SPV will have to pass comprehensive background checks and will be required to have a positive track record and considerable experience in investing and managing real estate investments and companies.
Once you have allocated funds to the Property or Automatch Loan Book and a loan request becomes fully funded, you are automatically entered into a loan agreement with the borrower for the loan, along with other lenders. The loan documentation will be bespoke for each transaction. Credit Peers will act as your appointed agent in this agreement and will manage the loan for you.
You will earn interest as soon as you have entered into a loan agreement. Interest on a loan will be calculated from the date on which the loan agreement has been made and the loan amount drawn by the borrower. The interest earned will be paid to you either periodically during the loan term, or on maturity of the loan, in accordance with the agreed terms shown on the website.
No, we don’t. We believe that this is the best way to prevent any conflict of interest between you, as a lender, and us as loan facilitator and as your agent, in every loan agreement.
But we have a big stake in every loan you find on our platform – our reputation. You can be assured that we carefully assess every loan application to safeguard our business as well as our lenders.
Every loan made through Credit Peers will always be secured against a legal charge on the property. This charge will allow Credit Peers to repossess the property on the lender’s behalf, in the unfortunate event that a borrower should default. From time to time Credit Peers will also secure other additional securities on behalf of the lenders such as, for example, pledges over the current accounts or receivables of the borrower.
Given Credit Peers’ origination and underwriting expertise, we will ensure that every borrower and the underlying assets are properly analysed and vetted before a loan is made to minimise the risk of a default. In the unfortunate event that a borrower defaults, Credit Peers would seek to repossess the asset (and any additional security). Subsequently, the asset would be sold in the open market without delay, on your behalf. Given that Credit Peers never lends the full value of the asset there is a chance that all funds can be recovered. However, a forced sale at short notice, or potentially in poor market conditions, may result in the full asking price not being obtained.
There is no guarantee of a full return of capital and income, and it is important to stress that property values can go up and down, and you could lose your money. Please consider the risk associated with making a loan, even if your money is secured against property.
You should look at peer-to-peer lending as an investment activity, where your money could be tied up for a few years at a time. This is not to say absolutely that you can't access your funds invested in a particular loan. But in general peer-to-peer lending is not suitable for money that you know you're going to need to access quickly, as you would have to find someone who would want to buy your interest in the loan from you. Please note that we don’t offer a market for such transactions.
Credit Peers is a facilitator enabling lenders and borrowers to enter into loan agreements. We do have reasonable steps in place to manage the repayments and collections in the event of Credit Peers becoming insolvent. Therefore, whatever happens to Credit Peers should have no financial impact on lenders or borrowers.
Furthermore, Credit Peers does not hold funds received from lenders or borrowers. These funds are ring-fenced from Credit Peers’ balance sheet and held in a secure, segregated third party custodian client account at Barclays Bank, a UK regulated financial institution. In the event that Credit Peers became insolvent and entered administration, the funds in the client account would be returned to Credit Peers’ customers, and could not be accessed by administrators.
Get in touch with our origination team. The fastest and most efficient way is to register online as a borrower here. The registration is quick and you will be asked to provide us with some information up front to assess your requirements. Once this is completed Credit Peers will be in touch to provide you with a quote as quickly as possible.
We focus on small to mid-size commercial real estate debt funding with loan amounts typically in the range of £1 million to £12 million.
However, we are flexible and will assess each case individually. Get in touch with us to discuss your requirements.
We are not focused on a particular class of property. Credit Peers provides borrowing opportunities to owners of a variety of property types, including but not limited to, residential, office, retail, industrial, logistics and hospitality. We will consider varying degrees of risk – from stabilized, cash yielding assets to ground-up developments.
Credit Peers’ mission is to provide the benefits of P2B lending to professional real estate investors. Therefore, borrowers on the Credit Peers’ platform typically have a substantial track record in their particular field of the market, and have operated with their current set-up for at least three years. Credit Peers’ borrowers must be able to prove experience in acquiring, managing, developing and/or reselling real estate.
Credit Peers arrange for their customers to borrow from each other. The people you are borrowing from are either individuals or institutions. The interest you pay on the loan is the interest they receive on the money they lend.
Yes, we do. We have to verify both the company which becomes the borrower, and the directors who run the company.
These credit checks on the individuals are "soft" – which means they don't impact the individual’s credit file.
Please remember that Credit Peers will only lend to companies (including SPVs), and not to individuals. Checks on the company and underlying assets will be conducted and form part of our comprehensive underwriting.
Our lenders are essentially individuals and institutions looking for a better return. They lend their money in return for a fixed interest rate. For further information and how to borrow please click here.
The interest rate you pay will be determined by a number of factors, including:
- The underlying asset, its risk profile and your experience.
- The rate that your lender(s) wish to earn.
- The size of your loan and the term.
- Any fees or costs that are added to the loan balance.
Ultimately, this depends on whether or not the credit application is approved by Credit Peers’ credit committee. Prerequisite for a positive decision by the credit committee is that the application fulfils a number of conditions including: the borrower needs to be an incorporated company which holds the title to the property that serves as security for the loan (usually this will be a Special Purpose Vehicle, or SPV); the borrower will need to hold a current account and provide orderly filed accounts; the directors and shareholders of the SPV will have to pass our background checks; and they will be required to have a positive track record, with considerable experience of investing in and managing real estate.. There might be exceptions within these prerequisites, so get in touch with us to speak about your requirements.
In general, there are two reasons why Credit Peers can offer less expensive borrowing than high street banks and building societies:
- We cut out the middle-men.
- Because of the "real-time" nature of peer-to-peer lending, meaning operating via the internet. Because of this, we have less overhead costs than a bank that has to keep branches open and call centre staff on the payroll.
Yes, it can but there may be an early repayment fee for doing so. Check the terms and conditions of the facility agreement to make sure.
Yes, Credit Peers does require (usually) quarterly qualitative and quantitative reporting. As a borrower, you can provide your reports conveniently online, removing the need to send hard copies or emails with large attachments. The reporting ultimately depends on the type of loan you have agreed with us.
No, Credit Peers will handle all communication with the lenders on your and their behalf. Our electronic platform handles the majority of the loan processing automatically, enabling us to keep costs down.
No, because we promote non-recourse lending. However, if you are a director of a company that is in default of a loan which may trigger the repossession of your asset, and your company becomes insolvent, you may have to carry responsibilities under your directorship.
If Credit Peers becomes insolvent you will still need to repay any loans as they will be held by trustees on behalf of the lenders, and the loans will be serviced by third parties. Your funding will still be owed to your lending peers, as per the terms of your facility agreement.
As a lender and as a borrower you will have an account with us – your Credit Peers Account. Your Credit Peers Account will show the balance of monies held on your behalf.
All payments to and from this client account are processed by our payment service provider, MangoPay S.A.. MangoPay is an e-money issuer registered under EU and Luxembourg law by the Luxembourg Financial Market Authority (CSSF). Find out more about MangoPay here.
To make a loan you must first credit your Credit Peers Account by transferring funds to the segregated client account.
Once you have fully registered with us you will find the navigation button ‘Payments’ on the left of the screen showing your Account Overview. When you click ‘Payments’, you will be taken to a screen where you can enter the necessary data and choose how to transfer money to your Credit Peers Account. Just follow the instructions on the screen.
MangoPay will facilitate the transfer, and hold your money in the segregated client account. Once the transfer is complete, your Credit Peers Account will show the balance of your transfer and we will let you know by email that the money has arrived.
Please note that the bank account, or the credit/debit card from which you transfer money, has to be in your name. For regulatory reasons, we cannot process payments from an account not held by the Credit Peers’ customer who registered with us.
Once you have fully registered with us you will find the navigation button ‘Payments’ on the left of the screen showing your Account Overview. When you click ‘Payments’ you will be taken to a screen where you can enter the necessary data and choose to transfer money from your Credit Peers Account to your bank account. Just follow the instructions on the screen.
Please note that the bank account has to be in your name. For regulatory reasons, we cannot process payments from an account not held by the Credit Peers’ customer who registered with us.
As a lender, you are responsible for the administering of your own tax affairs and applicable taxes. We do not provide tax advice, and you should seek independent professional advice before lending if you are unsure of your tax position, or how it might affect your tax status.
Yes, every lender with Credit Peers can download an individual loan statement at any time. This will show the details of your loan(s) which you may require for tax purposes, including the name(s) of the borrower(s) and the amount of any interest paid to you. We do not offer paper statements.
Interest payments from loans made through Credit Peers are paid gross, and no tax is withheld by us. Therefore, as a lender you are responsible for any personal tax liability.