Business World – Dec 2017

Ireland’s 1st Peer-to-Peer Funded Property Development

Ireland’s first Peer to Peer property-backed loan of €1.5m was launched by Initiative Ireland today. This positions the finance company as Ireland’s 2nd Largest Peer to Peer Lender.

The loan was made to North Strand Five Lamps limited, to finance a social housing development in Dublin 1, consisting of 10 apartments and a ground floor cafe. With full planning in place, the development is expected to deliver the units to the market in late 2018.

The first loan of its kind in Ireland, at €1.5m it is the single largest peer to peer loan approved in Ireland to date. It is the first of many according to the CEO, with the company aiming to finance up to €60m by the end of 2018, supporting the construction of over 250 new family homes.

As Private Lending Members, individuals and institutions can sign-up for free to view loans via the platform, which are pre-approved by the company’s experienced Credit Committee prior to listing via their digital platform. As an approved Private Lender, individuals can earn returns of 3.00% to 8.00% APR on their committed funds, dependent on the risk tier and loan term they select.

Each loan is secured with a first legal charge over the properties and whilst committed funds accrue interest monthly, these are only released to the borrower on a phased basis. Initiative Ireland approve the release of funds provided they are satisfied with the ongoing reports from their appointed Quantity Surveyors and Relationship Management Team.  This helps to ensure the release of funds occurs in line with the completion of works and scheduled increasing value of the site.

Peer to Peer lending, which has become popular in the US and UK, (where it now exceeds £3.2bn) enables individuals and institutions to pool funds and collectively finance loans together, as an alternative method of offering finance to businesses and individuals. Traditionally, peer to peer lenders offer unsecured, high-cost loans to businesses which are otherwise unable to secure finance.

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