Platform Frequently Asked Questions

If you don’t see an answer to your question, you can send us an email to [email protected].

Proplend is a Peer to Peer (P2P) Lending platform that connects investors direct to Borrowers with loans secured against income producing Commercial Property in England and Wales. We specialise in meeting the loan requirements of the under-banked sub-£5m loan market, whilst offering opportunities for ‘Lenders’ to earn regular monthly income. 

Proplend Limited is authorised and regulated by the Financial Conduct Authority, and is entered on the Financial Services Register under firm registration number 726646. 

Proplend Limited is authorised by HMRC as an ISA Manager.

Proplend Limited registered office is 20-22 Wenlock Road, London N1 7GU (Company Number: 08315922). Proplend Limited is registered with the Office of the Information Commissioner (Reg. no. Z3655272). 

Proplend Security Limited registered office is 20-22 Wenlock Road, London N1 7GU (Company Number: 08315922) Proplend Security Ltd is registered with the Office of the Information Commissioner (Reg. no. ZA014126).

Residents of the United Kingdom of Great Britain and Northern Ireland are eligible to apply to use the Service as a Lender. For other countries of residence, excluding the Channel Islands and the Isle of Man (“UK”), you are solely responsible for ensuring that your use of the Service does not breach any laws, regulations or rules in your country (including those relating to tax payable on any gross interest received).

You must be at least 18 years old with a UK registered bank account at a duly authorised financial institution that’s acceptable to Proplend.

*Residents of other countries are accepted on a case-by-case basis. Please contact us at [email protected]

Please note: UK resident includes those (and their spouses/civil partners) who perform duties as a crown employee serving overseas. You can’t open an ISA or subscribe to an ISA in a tax year where you have not been UK resident. UK resident means at any point during a tax year. You don’t have to close your ISAs while you are non-UK resident but you are obliged to notify your ISA Managers if you cease to be UK resident (or change address within the UK).

Yes, you can invest via your ISA, SIPP or SSAS subject to annual allowances. You can also transfer in existing ISA, SIPP or SSAS investments from other providers.

Click on the ‘Register’ button at the top of our web pages to complete our short form and agree to our terms and conditions.

You’ll be given the option of opening either a Classic invest account or tax-free Innovative Finance ISA. If you wish to open one of each, then choose an account to initially register for and then click on the ‘Create ISA’ or ‘Create Classic account’ action button on your account dashboard.

Opening the second account via your dashboard is the quickest, simplest way to add an ISA to a Classic account (or vice versa) and it helps to ensure the two accounts are associated – with a single login enabling you to manage both accounts.

If you wish to open a pension account for your SSAS or SIPP then your pension provider will need to do this on your behalf.

As an FCA regulated and authorised platform, it is necessary that we perform certain Anti-Money Laundering and Know Your Customer checks to verify your identity and prevent any potential money laundering.

If you do not pass AML & KYC automatically, then we may ask you to send in the relevant supporting documents. 

We are partnered with a third-party provider who perform electronic checks against certain watchlists.

For this reason, Lenders are only able to open a Proplend account(s) once these checks have been passed.

In line with the FCA’s recent Policy Statement PS22/10, they are concerned that too many consumers are just ‘clicking through’ and accessing high‑risk investments without understanding the risks involved.

Therefore, the Appropriateness Test is seen as a key consumer protection, designed to alert consumers where a product or service is not considered appropriate for them (i.e. where they lack the knowledge and experience to understand the risks involved).

Our appropriateness requirements are now met through an interactive set of questions put to the prospective Lender online, without any human involvement from Proplend.

In line with the FCA’s recent Policy Statement PS22/10, they are concerned that too many consumers are just ‘clicking through’ and categorising themselves without thinking about their current status.

Therefore, to reduce the levels of incorrect self-certification the FCA have stated that firms need to strengthen risk warnings, ban inducements to invest, introduce positive frictions, improve client categorisation and have stronger appropriateness tests – as these are all part of ensuring that clients understand their financial status and the prospective investments.

Lenders are required to update their categorisation on an annual basis.

The minimum investment amount per loan is £1,000 (and multiples thereof).

We currently do not have a maximum investment size; however, we may introduce investment cap limits on a loan-by-loan basis depending on the size of the loan.

 

 

To avoid any delay investing, you will need to register a bank account in your name to your Proplend account. Input these details in the banking section of your Proplend dashboard and we'll give you the details of our Client Money account to fund your account.

Then instruct a payment from your bank to Proplend making sure you include your LEND number.

As soon as funds have cleared and have been credited to your Proplend account, you're then free to invest either by manually selecting your loans or enabling our (Tranche A) Always On option.

Yes. All money transferred to the Proplend Client Money a/cc shall be held on trust by Proplend and treated as Client Money in accordance with the FCA's Client Money Rules.

Uninvested monies earn interest at the prevailing Barclays Client Money Account Interest Rate and invested monies earn interest once the loan investment is drawn down or a loan part is purchased on the Proplend Loan Exchange.

“Cash Drag” is a term which is used by investors to describe the negative effects on their returns of sitting on cash whilst waiting to fund an investment opportunity (something which can occur frequently).

This is because there is often a timing gap between the point when a Lender deposits funds and the point at which a loan is originated and matched against those funds.

Therefore, any predicted returns are solely based off funds that have actually been invested into a loan and not funds that have been deposited but not yet deployed.

 

Loan interest will be paid from Borrowers and paid into Lenders Proplend account on a monthly basis.

The loan interest payment date for each month will be on the monthly anniversary date of the loan drawing down. All interest payments due to the Lender(s) are deposited in their Proplend account and can be withdrawn immediately if required.

If a Lender opts to receive “Regular Monthly Interest” then on the first working day of the month, we will automatically pay all the interest a Lender has earnt in the previous month to their nominated bank account.

Any un-invested funds which are not committed to a ‘Waiting to close’ In Funding loan, can be accessed by requesting a withdrawal of the Available Funds via your Proplend Dashboard.

Proplend charges a ‘Lender Fee’ equal to 10% of the interest that Lenders actually receive.

The fees are paid monthly, immediately after the interest is credited to participating Lenders’ accounts.

When selling a loan via our secondary PLE market, the seller will pay a ‘Novation’ fee equivalent to 0.5% of the face value of the loan part, subject to a £5 minimum per part. The fee is deducted from the proceeds (face value and accrued interest) of the sale.

 

Once committed an offer to lend stands and cannot be withdrawn. If investing into an ‘In Funding’ loan, then the funds are locked-in for the loan offer amount until the funding process ends. The Lender’s funds are transferred to the Borrower’s account upon drawdown of the loan on the day of completion.

If the funding process is unsuccessful the Lender’s funds are released and can be used for other loan investments.

 

Proplend has three core products: Term Loans, Bridge Loans and VAT Loans and the interest rates quoted are gross fixed rates, that are loan and Tranche specific. Each loan (exc VAT loans) is ‘Tranched’ into up to three loan-to-value (LTV) based, risk-priced investments – A (0-50% LTV), B (51-65% LTV) and C (66-75% LTV).

Tranche A is the lowest risk, offering the lowest interest rate. Tranche C is the highest risk with the highest return.

In a default scenario, Tranche A is paid in priority to Tranche B and Tranche C, then Tranche B is paid in priority to Tranche C.

 

 

 

Any uninvested funds held on Lender’s behalf in the Proplend Client Money account held with Barclays Bank, are protected under the FSCS rules up to the current £85k threshold.

Funds which are already invested in active loans are not covered by the Financial Services Compensation Scheme (FSCS).

Each and every (Term & Bridge) loan will be supported by a security package including;

  1. a First charge legal mortgage over the property, which will be registered with the Land Registry/Companies House;
  2. a Debenture or Share Charge may also be taken and registered at Companies House; and
  3. in addition the Borrower’s Directors / Shareholders may be required to offer a Personal Guarantee.

Proplend Security Ltd (Security Trustee) holds the first legal charge on all securing property on behalf of the Lenders, which ranks platform Lenders ahead of any other permitted 3rd party security. This is an essential, non-negotiable criterion.

Also, an interest reserve is taken on all loans that are backed by income-producing property.

  • Term loans: we retain a minimum of 3 months Interest Reserve on these loans
  • Bridge loans: we hold a minimum 3-month Interest Reserve on all these loans plus the “retained” interest payments for the term of the loan
  • VAT loans: we hold a minimum 1-month Interest Reserve on all these loans plus the “retained” interest payments for the term of the loan.

 

 

Proplend does not guarantee the loans. We bring together and present all the information so that Lenders can make an informed decision about which loans they wish to invest in, using their own judgement.

 

 

No two defaults / enforcements are ever the same as each loan invariably has a differing set of circumstances therefore, you cannot necessarily engage or use the same levers for each loan that requires a work-out strategy. When determining the most appropriate course of remedial action, we consider all factors pertaining to the Borrower, the asset, the economic climate all with a view to ensure recoveries are maximised.

Further to this, experience has taught us that in the majority of instances it is beneficial to maintain active and consensual dialogue with the Borrowers to determine the best strategy to facilitate full repayment their loans.

 

 

Yes we do – our secondary market, the Proplend Loan Exchange (PLE) can be used to buy and sell already funded loans up to a month before their repayment date.

Holders of active loans can make their loan parts available to other Lenders at face value and will receive any accrued interest (since the last monthly repayment date) from the buying Lender – who then receives all of the next monthly interest payment.

Trading of a loan will be automatically suspended with a month of the loan term remaining and cannot be made available (or purchased) thereafter. Trading will also be automatically suspended during the term when a loan ceases to be in ‘Active Good Standing’ (for example for interest being ‘In Arrears’) – until which time the loan returns to this status.

When selling a loan via our secondary PLE market, the seller will pay a ‘Novation’ fee equivalent to 0.5% of the face value of the loan part, subject to a £5 minimum per part. The fee is deducted from the proceeds (face value and accrued interest) of the sale.

The liquidity of the loan exchange cannot be guaranteed, however available loan parts are often picked up by your peers within 24 hours – or sooner.

 

 

 

 

In the unlikely event that Proplend goes into administration, we have put in place a contingency plan. The Financial Services Compensation Scheme (FSCS) does not cover the insolvency platforms, but as Proplend is regulated by the Financial Conduct Authority we are required to protect Investors funds if the platform was to fail.

Investor funds that have not been lent to Borrowers are held by us in a ring-fenced and segregated Client Money bank account held with Barclays in accordance with the FCA’s Client Money rules.

These funds do not form part of our assets, which means that they are not available to creditors in the event of our insolvency.

As an FCA regulated P2P platform, we are required to have a back-up servicing arrangement in place. This means that in the event that Proplend were to cease trading, the back-up service provider would take our place in operationally managing and administering the existing loan contracts between Investors and Borrowers.

The back-up service provider would continue to receive loan repayments from Borrowers, and to process and distribute these payments to Investors.

In practice, this means that if Proplend were to fail, all of the Investors existing loans would be unaffected as the contracts between each Investor and Borrower are still legally valid and will not change and will continue as normal each month until the loan redeems.

The ongoing 10% Lender fee, plus a liquidity buffer as per the FCA's wind down planning guidance, we expect should be sufficient to provide an ongoing revenue stream through the life of the funded loans to cover the servicing cost of these loans, to be administered by the back-up service provider.

The back-up service provider that Proplend have in place is Resolution Compliance Limited (Firm Reference Number: 574048)

Resolution Compliance Limited (RCL) are authorised and regulated by the FCA and they hold the relevant Part 4A permissions in respect of Operating an electronic system in relation to lending and being able to control Client Money. As RCL may control but not hold Client Money our back-up services agreement with them clearly states they (RCL) will…

Liaise with any Insolvency Practitioner in relation to the administration or distribution of any Client Money held or received by the firm in accordance with the provisions of the CASS and the Operator’s CASS resolution procedures and, in particular, upon any primary pooling event (as defined therein) provided that Resolution shall not be required to hold any Client Money itself.

Liaise with any Insolvency Practitioner to open new client accounts in the name of the Operator for the receipt and distribution of Client Money following a primary pooling event.

Act as the administrator of the Operator’s Client Money account(s) or (using reasonable skill and care in the selection thereof) make arrangements for another person acting under Resolution’s direction to administer the Operator’s Client Money account(s) in each case subject to the instructions of any Insolvency Practitioner.

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