How We Work
Money&Co. is a P2P lending platform, which allows individuals looking for a better return on their cash to lend to good quality companies. Money&Co. launched its platform on 29 April 2014 and completed the first loan in July 2014.
The Money&Co. Portfolio products are managed by Bramdean Asset Management (“Bramdean”), an FCA-regulated fund management business. Money&Co. Portfolio invests exclusively in asset-backed loans, typically with a fixed net return of 7% per annum after all charges.
These are loans where Money&Co. has a charge on behalf of its lenders over an asset, usually a property. Money&Co. might have a first or second charge over the underlying property. In either case, Money&Co. will ensure that there is sufficient headroom to allow for any financial shocks and that it will be able to get money back for its lenders if the borrower is in default. Nonetheless, lenders must understand that their capital is at risk.
Money&Co. has a credit framework, which sets out certain criteria that borrowers must meet in order for a loan to be considered. When a borrower contacts Money&Co., a representative must complete an online credit application. Money&Co. has a system that then determines within 30 minutes if the application meets its borrower requirements. If it does, a credit analyst then picks up the application and contacts the borrower and arranges a meeting. The credit analyst then writes a credit note and recommends a credit rating for the loan. Money&Co. has five credit ratings: A+, A, B+, B and C+. Asset-backed loans will generally have an A+ or A credit rating. The credit rating reflects the likelihood of there being a default. Money&Co.’s Credit Committee, which consists of the Chairman, the CEO and the Head of Credit, will consider the loan application and approve or decline it. Once approved, the Money&Co. lenders take pieces of the loan.
The company develops residential property. Money&Co.’s lenders have effectively provided bridge finance to allow the developer to purchase sites. Once planning consent has been received, Money&Co. lenders’ money is redeployed into the purchase of the next site. Money&Co. lenders have a first charge over each site and, when the money is not being used, it sits in escrow with a legal firm.
Bramdean is responsible for allocating the client fund into the loans approved by Money&Co. There is no additional charge for this service and Money&Co. Portfolio clients pay the same annual fee of 1% as all other Money&Co. lenders.
Loans will typically have a term of 5 years. If you want your money back before the end of the term of a loan or loans, Bramdean will put your loans, loan or part of a loan up for sale in the Money&Co. loan market. In the past, all loans that have been put up for sale have been sold within a few days, but it must be emphasised that there is no guarantee that it will be possible to sell your loans, loan or part of a loan.
Your loans will not be covered by the FSCS as P2P loans are specifically excluded from the part of the scheme that covers deposits made with banks, building societies and credit unions. However, as an FCA-regulated investment firm, Bramdean is covered by the FSCS and so, as a client of Bramdean, you will be protected. The maximum amount of compensation that an investor can get if an investment firm is in default under the FCA/FSCS definition is £50,000.