Understanding the risks

easyMoney is not a cash savings account.

The easyMoney platform matches carefully selected property professionals looking to borrow short term finance (3-12 months) for business purposes, secured against UK property, with investors looking to invest.

The easyMoney team has many years of experience in property and property lending and undertakes rigorous due diligence on all borrowers and the properties against which your money is lent.

All investments contain an element of risk:

Interest and capital

  • The ‘target return’ or ‘expected return’ is the rate we are currently targeting to pay investors, assuming your money is invested 100% of the time and before tax (if any). It should be noted that there could be delays both initially and between loans where your money is not invested and this could reduce your returns. Returns are not guaranteed and are subject to change from time to time, entirely at our discretion.
  • We reserve the right to close any offer and to launch a new offer at a new target return, at any time. Any new products or changes to existing products will be displayed on our website and also will be communicated to you by email.
  • Any new target return will not affect the rate you are currently targeted to receive on any existing underlying loans upon which you are invested. The individual targeted rates on these underlying loans will remain the same until each one is repaid by the borrower. Upon repayment, if you have continued to select the auto invest button your monies will automatically be re-invested in new loans at the current target rate. It should be noted that if some of your loans are invested on an historic rate and some are invested at a new rate, then this will alter the overall rate you receive.
  • If you do not wish to re-lend your money at the new target rate of the product you have selected you must remember to switch off your auto invest button to avoid your monies being automatically invested at the new target rate.
  • We lend a maximum of 65% (Conservative product) or 75% (Balanced Product) of the value of a property, with valuations being undertaken by a Royal Institution of Chartered Surveyor’s (RICS) valuer. If the value of a property against which you have lent falls, the borrower may find it harder to sell or refinance the property.
  • 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. This may take some months.
  • Your interest and capital are not guaranteed and there could be a capital shortfall if for any reason there is a delay in investing funds into underlying loans and the property is sold for less than the outstanding sums owed e.g. fraud, property market fall, erroneous valuation etc. Your investment is not covered by the Financial Services Compensation Scheme (FSCS).

Late payments

Sometimes, for various reasons, underlying borrowers can be late in paying their monthly interest. In this event we may, at our discretion, pay interest to investors on behalf of the underlying borrower for up to two months. If two monthly payments are missed by the borrower, then easyMoney will categorise the loan as being in default. We will work with the borrower to recover any missed payments and to obtain repayment of the loan. As a last resort we will repossess and sell the property.

Liquidity

You can request to sell some or all of your loans at any time, but the ability to sell is dependent on the availability of willing buyers and the loan must have a history of consistent performance with at least 3 months left on the loan term. If there are no willing buyers, you will have to wait for your repayment until the borrower repays or, in the event of default, that we conclude the recovery process.

Diversification

We shall use our reasonable endeavours to diversify your total portfolio of cash and loans so that any single loan within it does not exceed our target exposure level. We do this by selling part of your initial loan portfolio and re-investing into new loans coming onto the platform over time. At present, the maximum target exposure level for a single loan is 20%, although this may change from time to time and we cannot guarantee that we will achieve our targets (for example, because the number of anticipated borrowers reduces or because loans become non-performing and unsellable). The diversification process may take a period of months to achieve. Until then, your money will be concentrated in a smaller number of loans, meaning the that impact of any individual non-performing loan on your overall investment will be greater. You can view your loan portfolio and any cash held on your ‘My Portfolio’ page.

Conflicts of interest

The management of any conflict of interest is important to us. In order to have a pool of loans available for Regular, IFISA and Pensions investors (“platform investors”) we have arrangements in place with a number of established professional investors to underwrite loans. As these investors typically provide larger sums on a medium to long-term basis, they receive a higher interest rate than platform investors. We make sure that no platform investor gets priority over any other platform investor based on any factor other than the time at which they place their investment.

Backup in the event of platform failure

If easyMoney were to stop operating the existing loans would be passed to a standby servicing company to take over the management of the loan book and oversee the return of your investment.

Client Accounts

Any money waiting to be allocated to loans will be held within segregated client accounts at NatWest and during this period is covered by the Financial Services Compensation Scheme (FSCS) until it is invested.

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Last updated: 2018-03-31