There will typically be periods during which your money will be held in cash before we are able to fully allocate it to loans (known as “cash drag”). This can happen both when you invest initially and once a loan is repaid and we need to re-invest the proceeds. The actual rate of return you receive will be lower than the loan interest rate where cash drag occurs.
The actual rate of return will also be adversely affected if for example there are any defaults, if there is a fall in the value of the property or if you have to pay tax on the interest you receive. Any changes to the current target rates will be advertised on our website.
Returns are subject to change from time to time, entirely at our discretion. Any new products or changes to existing products will be displayed on our website.
If you do not wish to re-lend your money on new advertised product terms, as amended from time to time, you must remember to switch off your auto invest button to avoid your money being automatically invested on the new product terms.
On bridge loans, we lend a maximum of 75% of the value of a property. On development loans, we lend a maximum of (1) 75% of the initial value of the property, plus (2) up to 100% of development costs. Total lending under (1) and (2) (including all interest, fees and other costs) is capped at 70% of the anticipated Gross Development Value (namely the price that the valuer anticipates the developed property will sell for). Valuations are generally undertaken by a Royal Institution of Chartered Surveyors (RICS) valuer. Valuations are the valuer's opinion of the value at the date of valuation and are subject to change over time. If the value of a property against which you have lent falls, the borrower may find it harder to sell or refinance the property. Bridge loans lend against the initial value of the property. Any building or development works generally have to be paid for by the property owner. Property development loans can potentially carry more risk than bridge loans because you are reliant on the developer, his project manager, contractors and other professionals to undertake the construction diligently and expeditiously. Unforeseen problems and changes in circumstances can also occur during the construction and sales process which could potentially result in their being insufficient monies to repay the loan. A professional monitoring surveyor is appointed to make regular site visits during the construction process and is responsible for identifying and reporting on any potential issues as they occur.
easyMoney undertakes detailed due diligence before entering into any loan on your behalf, but if for any reason a loan becomes non-performing, we will work with the borrower to recover any missed interest payments. If necessary, as a last resort we will commence repossession proceedings in order to sell the property. If the property is not in a completed state, it may be necessary for easyMoney to take over and complete the development in order to maximise the return. This may take some months.
Your interest and capital are not guaranteed and there could be a shortfall if for any reason there is a delay in investing funds into underlying loans or the property is sold for less than the outstanding sums owed as a result of fraud, property market fall, erroneous valuation, non-delivery of development milestones etc. Your investment is not covered by the Financial Services Compensation Scheme (FSCS).