The UK's first peer-to-peer lending platform which lends its own capital in every loan made available on its platform has launched.
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div>The UK’s first peer-to-peer lending platform which lends its own capital in every loan made available on its platform has launched.
Wellesley & Co
Wellesley & Co, which launched the unique platform this week, is the first asset-backed model where the operator is taking a stake in every loan.
It is unique as Wellesley uses its own money to fund every loan agreed with the borrowers, pending its lender clients participating in those loans. In doing so it participates and risks its own capital in every lending decision that it makes.
It will retain a portion of every loan and the shareholders have committed to provide £5 million of their own money for this purpose. Therefore, it is the only P2P lending platform to risk its own capital.
Commenting on the launch, CEO of Wellesley, Graham Wellesley, said: "We are very excited to be launching our platform at a time when the sector is growing exponentially. We spotted a gap within the market which to date has not been addressed. We are bringing to the market for the first time an asset-backed model where the operator is taking a stake in every loan. Through our Board's strength and proven pedigree within financial services, banking and property; we strongly believe we are offering a truly unique product within peer-to-peer lending."
The Lender
Wellesley & Co has been operating as a property finance company since June 2013.
It launched as Sterling Property Finance facilitating bridging, development and mezzanine finance, but in conjunction with the launch of the P2P platform it has now rebranded as Wellesley Finance.
Wellesley provides loans of up to £1 million secured on UK property and it hopes to increase its loan sizes as the P2P platform grows. In particular, it provides property investors and developers with access to much needed funding.
Graham Wellesley, CEO and Founder of Wellesley & Co, is the
great-great-great-great-great grand-nephew of the Duke of Wellington.
It provides funding for first and second charges for bridging, development and mezzanine finance with loans being secured on residential or commercial properties.
Wellesley has a proven ability to source borrowers having already processed over £100 million of loan applications since opening its doors.
Of those applications, £2 million have already been drawn, £4 million are in the process of documentation pending drawdown, and £30 million are being due diligenced prior to going to Credit Committee. Those loans already drawn have an average LTV of 62 per cent, and all are current with no delinquencies, or defaults.
The Team
The Wellesley Group was founded by (L-R): Graham Wellesley (Joint CEO and Chairman), Colin Emson (Chairman), Andrew Turnbull (Director and Head of Lenders) and Anthony Fane (Joint CEO and Head of Lending).
As well as the founding members of the Wellesley Group, the management team also consists of Director Paul Cragg, Chairman of the Credit Committee.
There are five other members of the team including Clint White (Loan Officer), Manoj Chitroda (Deputy Loan Officer), James Gibbs (Business Development Manager), Sam Seaton (Business Development Associate), and Aldwyn Boscawen (Associate).
James Gibbs, Business Development Manager of Wellesley & Co, told B&C: “It is an extremely exciting time for the company. The launch of the platform and rebrand of the lending arm has seen five people recently join the company and our offering is unique.
“The key element to our P2P platform is that we have already lent money and have a track record; we’ve hit over £100 million of enquiries since we originally launched.
“Bespoke eKeeper software has been created for the platform and once an investor signs up to a particular term product and commits funding they instantly begin attaining interest on their investment.”
Investors
Wellesley & Co currently offers returns of 5.5 per cent or more, with security for lenders and low cost loans secured on property to creditworthy borrowers.
|
Terms |
Monthly Interest |
Interest on Maturity |
|
18 months |
5.5% |
not offered |
|
3 Years |
6.0% |
6.5% |
|
4 Years |
6.5% |
7.0% |
|
5 Years |
not offered |
7.5% |
Wellesley offers savers a further security measure, provided by access to a Provision Fund which is currently funded with an initial £100,000 provided by the shareholders of Wellesley & Co. As each loan is drawn-down a percentage will be paid into the fund so that it keeps pace with the growth of the loan book.
In the event of a default the security will be realised and sold. Wellesley & Co has subordinated its interest to those of its lenders, so that P2P lenders will always be repaid first.
Customers of Wellesley have access to a discretionary Provision Fund, which has been funded by the shareholders of the company with an initial £100,000. In the event that a loan defaults, and a lender suffers a loss, lenders may apply to the Directors of the Provision Fund for the return of their money. As each loan is agreed, a percentage will be paid into the fund to ensure it keeps pace with the growth of the loan book.
The Wellesley Promise
The company's charter is called The Wellesley Promise which sets out some of the commitments that the firm makes to its customers. One of the promises that makes Wellesley & Co unique is that it promises to start paying interest to its lenders as soon as they have committed their money as opposed to only doing so once it has actually been lent.
The Future
The UK's P2P lending market has trebled in size in just three years and is currently worth £550 million and is forecast to be worth £1 billion by 2016, according to research by the Open Data Institute (ODI) supported by the Bank of England.
British consumers, frustrated by poor returns offered by high street banks have developed considerable interest in P2P lending as they are able to earn far better interest rates. For small businesses and borrowers, loans are quicker to arrange through P2P lending platforms and are often more affordable than bank finance.
With a strong management team and balance sheet, Wellesley has the right infrastructure in place and is well poised for future growth.
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