The company, which launched on 27th April this year, will have completed loans worth over £200,000 since then and the end of this week. During the past month, the company has had requests for loans totalling £7.5 million and many of these are likely to be funded in the coming weeks.
HNW Lending has 10 high net worth backers plus its founder and director Ben Shaw, who is also using his own capital to help fund loans. The minimum requirement for investors is £60,000. Depending on the individual loan and because the proposition is based around peer-to-peer lending, interest rates for investors vary between around 6% APR and 12% APR. The higher rates are paid for more unusual assets and higher loan to values, whereas first charges on land at 40% loan to value pay around 6%. Investors choose which loans their money will be used to fund as they are bilateral loans between a lender and a borrower, with the collateral held in the lender’s name.
There are well over 700,000 high net worth individuals in the country and the number is rising dramatically. Typical loan to value will be around 50% so this, and this coupled with a personal guarantee from the borrower and the fact that many valuable assets have been increasing in value, reduces the risk of any loan. Between Q2 2003 and Q2 2013, classic cars increased by around 430% in value and fine wines rose by 182%(2).
HNW Lending aims to arrange up to 20 loans a month, collectively valued at between £2 million and £5 million each month.
Ben Shaw, founder and director of HNW Lending, said:
“There is a strong demand from many high net worth individuals to raise funds against their valuable assets, and with poor returns on cash savings and volatile stock markets, some investors find our proposition an attractive one. We aim to offer competitive returns for them for a very low risk. If the worst happens and a client cannot pay back their loan, the value of their asset that we have provided funds against should more than offset this.”
