Crowdstacker, a new peer-to-peer (P2P) business lending platform has launched providing retail investors with the opportunity to invest in mid-sized and financially stable businesses.
Crowdstacker is aiming to fill a need for larger ticket funding of up to GBP50million sought by companies with strong trading track records and a proven ability to provide a solid return on investment – but which are still struggling to secure lending since increased risk aversion by banks following the global financial crisis.
Its first loan product, The Quanta Loans, has been created for Quanta Group, a nationwide property investment company that purchases run down or hard to sell houses and flats, refurbishes them, and then resells them. With a history of successfully buying and selling over 500 properties in the UK, Quanta plans to use the target GBP3 million raised by The Quanta Loans to purchase some of the five to ten high quality property opportunities it is currently having to turn down each month because of lack of investment capital.
Investors can lend anything from GBP700 and will be offered a 6.8 per cent return per annum over the three year life time of the product, with interest paid in quarterly instalments. Properties bought with the money will be done-up and quickly sold on, aiming to ensure that the investment is not affected by fluctuations in the buy-to-let market.
Karteek Patel, CEO, Crowdstacker, says: “We see Crowdstacker as the democratisation of higher calibre investment options.
“We know from our research that the average man or woman on the street isn't yet engaging with investment opportunities such as crowdfunding because they don’t know what it is – or they are put off by not knowing exactly where their money will be spent.
“The average consumer investor is also put off other sophisticated and less risky investments such as bonds or equities, outside of their standard pensions or managed ISA funds, because they don't understand how they work or they don't have the higher sums of money typically required.
“Crowdstacker aims to bridge this gap – we’re offering Crowdfunding style simplicity combined with quality investment opportunities; we’ll only work with businesses that have passed our stringent due diligence tests.”
Crowdstacker will be launching a series of lending opportunities throughout 2015 beginning with the Quanta Loans. Excitingly investors in the first loan product will really be able to feel involved in the property investment and development process by tracking how their money is being spent with photographs and details of properties bought, as well as updates about any work being carried out. Quanta Group works to quickly turn properties around, typically only owning them for five months or less.
Karteek adds: “Quanta was deemed eligible to be one of the select products we will be offering because of its solid track record in its industry, plus the ability to provide further protection for lenders by using the properties purchased as collateral against the loaned capital.”