Proplend Pension Guide - 2016

Proplend Pension Guide Fixed Income Returns from Peer-to-Peer Investing via your pension

Retail Office Industrial

MARCH 2016

For more information about lending please call +44 (0)203 397 8290, email us at [email protected] or visit www.proplend.com 1

Disclaimer

Disclaimer

This guide has been prepared in order to help Proplend Members and their Advisors understand how to establish a pension

account, enabling them to lend through the Proplend platform. It is not intended to provide financial advice or meant as a

definitive guide in any way. Everyone’s financial situation is different and it is important that you seek independent financial

advice before setting up an account or investing.

Risk Warning

Investing through the Proplend platform involves making loans directly to borrowers secured against their property, like all

investments that involves a degree risk. The performance of your investment depends on the borrower’s ability to pay their

monthly interest payments and the capital sum at the end of the loan term. Your capital at risk.

In order to the minimise risks associated with lending Proplend ensures that all loans are supported by collateral, namely

property. In the event of a borrower default the property can be sold and its proceeds used to redeem the outstanding loan. If

the value of the property has fallen then this may not provide sufficient funds for all lenders to be repaid in full. More information

is available on the Proplend website in our Risk Statement.

Regulation

As of 1st April 2014, the Financial Conduct Authority (FCA) is responsible for the regulation of UK Peer to Peer platforms.

Proplend Ltd is authorised and regulated by the Financial Conduct Authority and entered on the Financial Services Register

under firm registration number 662661.

Investment made via a Peer-to-Peer platforms fall outside the scope of the Financial Services Compensation Scheme (FSCS),

but un-lent monies held in the Proplend Client Money Account are covered by the FSCS.

mailto:[email protected]

http://www.proplend.com


Introduction

Proplend is a Peer-to-Peer Lending platform that connects investors directly to borrowers with loans secured against income producing UK commercial property Lenders receive a fixed income return over a fixed term with interest paid monthly. In the unlikely event that the borrower defaults, the property will be sold and its proceeds used to redeem the loan. Lenders can select Loan Investments on a deal by deal basis, choosing the loan and Tranche that best suits their own risk and return profile. Because investors are lending directly to borrowers, and essentially cutting out

the middle man, they receive a greater share of the interest generated from the loan, allowing them to enjoy returns of between 5-12% pa*. Proplend originates the loans, conducts due diligence, instructs third party professionals (including valuers and solicitors), and then presents the investment opportunity for Lenders. Lenders can invest directly into commercial property loans through their pension. When setting up a Proplend pension account, a Lender receives all of the usual tax breaks and the income earned grows tax free within the fund. Loan Investments on the Proplend platform offer attractive rates of risk-adjusted returns with minimal volatility.

*After fees but before bad debts and taxes




Types of Self Invested Pensions

Most pensions in the UK are managed by professional fund managers who make all of the investment

decisions on your behalf and charge a fee for doing so. However, there are two types of ‘self-administered’ pensions where you can decide how and where to invest your money: the SIPP (Self-Invested Personal Pension) and the SSAS (Small Self-Administered Scheme). SIPP - As the name suggests a SIPP is a personal pension held by an individual that gives them control over the investments made within their pension. SIPPs will be set up by an insurance company or specialist SIPP operator.

SSAS - A small occupational pension scheme set up by the directors of a business that want more control over the investment decisions relating to their pensions and the opportunity to invest in their own business. While both schemes are subject to regulation governed by The Pensions Regulator, a SIPP is also covered by the Financial Conduct Authority (FCA), offering greater consumer protection. Both Proplend SIPP and SSAS accounts have access to the majority of Loan Investments either through the In Funding market or the Proplend Loan Exchange with some exceptions, please see ‘Restricted Investments’ on page 7. Equity investments held within a pension no longer receive Corporation Tax relief on their dividends. This

makes Loan Investments through Proplend even more compelling when compared to investing in equities for dividend income.




Setting Up Your SIPP or SSAS Account

The opening of either a SIPP or SSAS lending account with Proplend must be

arranged through an approved pension provider. Details of our approved providers are listed at the end of this document, please contact them directly in order to set up a new pension account or to transfer a portion of your existing pension. If you have a SIPP or SSAS with another provider we are more than happy to

speak with them directly about partnering with Proplend. Please get in touch with us at [email protected] or call 020 3397 8290. Each approved pension provider has their own application process for setting up your Proplend Lender account, all of which are quick and straight forward to complete. Once your Proplend SIPP or SSAS account has been activated your pension provider will send you your access details enabling you to login to the Proplend Lender Dashboard and view and invest in all eligible Loans.







Benefits

1. Returns:

• Investors enjoy attractive rates of fixed rate RISK ADJUSTED returns of between 5-12% pa*

• Interest is paid monthly

• Investing in Loans (debt) offers lower volatility than equities and can balance out a portfolio of direct

property investment (equity).

• Offer similar or better risk adjusted returns than other types of unsecured Peer-to-Peer Lending platforms

2. Security:

• Proplend Security Limited (PSL), the security trustee, enters into a first legal charge over all properties

loaned against, this is held in trust on behalf of the group of lenders

• Proplend retains a six month interest reserve from the gross loan amount, which can be used to continue

to make interest payments to the investors were a borrower to miss an interest payment.

• In addition PSL may seek to take debentures or personal guarantees. The full security package is listed

within each Loan Request document.

3. Investment Control:

• As a Proplend investor, you have full control over the investments you make. You can view the list of

available Loan Investments either In Funding or on the Proplend Loan Exchange (PLE) and make your

decision on a deal by deal basis.

4. Income Drawdown:

• Proplend Loan Investments pay interest monthly, this can be rolled up and reinvested for those looking to

grow their pension pot or can be drawn down to provide an income for those in retirement as an

alternative to buying an annuity.





Benefits

5. Level of Risk and Return: • The Proplend Tranche Model allows

investors with different risk and return

profiles to all participate in the same

loan investments

• Loans are split across up to three

Loan to Value based tranches each

with their own interest rate (see figure

below)

• Tranche A offers the greatest

amount of capital protection but the

lowest rate of return

• When a loan is repaid, investors are

paid in Tranche order with Tranche A

being paid first, then Tranche B and

then Tranche C





Restrictions

While SIPP and SSAS accounts give you the power to make your own investment decisions within your

pension there are certain investments you cannot make. Because of this, not all Loan Investments listed on the Proplend platform will be eligible for investment through your pension account whether a SIPP or SSAS.

Pension eligible Loan Investments: • Loans must be made to a Limited Company or an LLP • Loans must not contain any residential use • Loans must not be made to connected parties

Each Loan Investment will indicate whether it is SIPP or SSAS eligible. Care must be taken when making an investment into a loan that undue tax charges do not occur.




Proplend Partners

SIPP: SIPP Club https://www.sippclub.com/proplend/

SSAS: Whitehall Group www.whitehallgroup.co.uk



https://www.sippclub.com/proplend/

http://www.whitehallgroup.co.uk

https://www.sippclub.com/proplend/

http://www.whitehallgroup.co.uk/index.php


Contact

Contact Details: Ben Butterworth – Head of Lender Relations [email protected] Office +44 (0) 203 327 8290

DISCLAIMER

Proplend operates a peer to peer lending platform specialising in commercial property loans supported by first charge mortgages. Whilst loan investments are secured against property, capital is still at risk and therefore Proplend lenders face the possibility of losing money. Investments in commercial loans are long term in nature and may not readily be realisable. Proplend Ltd is incorporated in England and Wales registered number 08315922, registered address 145-157 St John Street, London EC1V 4PW. Proplend Ltd is authorised and regulated by the Financial Conduct Authority (firm registration no. 662661). Lenders on Proplend and other P2P platforms are not covered by the Financial Service Compensation Scheme.

If you are in any doubt as to whether lending on Proplend is suitable for you, we recommend that you seek independent financial advice.






Proplend Pension Guide - 2016

Economy & Finance

Transcript of Proplend Pension Guide - 2016