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What is Crowdahouse?

Crowdahouse is a business-to-business (B2B) property crowdfunding platform lending to business borrowers, always secured against property. Instead of lending to individuals, we’ve reduced the risk by offering you the chance to lend only to property businesses. You join a crowd to lend money in return for interest on your money. Your loan is secured with a first charge over property, just like a bank, and you pay no fees as a lender.

Who can lend money via Crowdahouse?

You must be the owner or controller of a UK-registered Limited Company. Any size business from a Single Director Company upwards may lend money, provided that you are a Limited Company. Sole traders or partnerships cannot lend money. Crowdahouse is not currently open to members of the public who are not business owners.

How do I start lending via Crowdahouse?

You must become a Crowdahouse Member to start lending. Membership is free and you can join here.

As a Member, you have full access to all our loan projects. Crowdahouse handpicks each project and creates a Loan Offer Document which contains all the information to help you and other Members decide whether to lend to the Borrower. Your loan will be secured in the form of a first charge over the particular property.

You and your fellow Members decide whether the project is worth funding. This way you can be sure that Crowdahouse only gets paid when the crowd believes the opportunity is worthwhile.

Will Crowdahouse charge me a lending fee?

No, we charge you no fees for lending, unlike most crowdfunding platforms.

The full amount of the loan you pledge will be applied to the loan project and earn interest.

Crowdahouse gets paid by the Borrower only when the loan is successfully raised.

What interest rate will I get?

The interest rate offered varies according to each lending opportunity or project. Please read the Loan Offer Document carefully and evaluate the risks involved in lending against a specific property or property type. Interest rates are generally between 5-6% for a simple purchase or refinance and up to 10% for purchase & refurbishment or development projects. However, each project will be different.

Will I become a property owner?

No, Crowdahouse offers simple lending opportunities, not complex property ownership.

New landlord rules and regulations are adding to the costs and burdens of ownership. Buying property with a crowd could result in arguments about valuations, when you can exit, tenant and management issues – not to mention sharing any profits with the crowdfunding platform.

With Crowdahouse you simply lend money in return for interest payments over a fixed term. And you earn all the interest paid by the Borrower. The Borrower is always the owner of the property, subject to the first charge that you and your fellow Lenders will hold. This means the Borrower is responsible for the property management, maintenance and all costs associated with the property.

We’ve removed the headaches of property ownership which we think is best left to full-time landlords. Instead, you benefit by crowdfunding loans to property professionals.

How does Crowdahouse select Loan Projects?

We’ve simplified the property crowdfunding process to bring you lending opportunities handpicked by our experienced professional property team.

The Crowdahouse Team have a combined 70 years of experience in property investment and financial products, including insurance and risk profiling. We source loan projects within the property industry and apply our knowledge and contacts to ensure that each project represents an opportunity that we can offer you and our other Members.

We aim for full transparency, including disclosing any conflicts of interest that may apply, so that you are fully aware of and understand all the risks before lending to any project.

Unlike equity crowdfunding (buying property in a crowd or investing in risky start-up businesses), lending secured against property benefits from an extremely broad and open market with free tools available for anyone to carry out due diligence on a property. You are strongly advised to perform these checks or seek independent advice before committing to a project.

Comparable information is available from many sources and we use the same Royal Institution of Chartered Surveyors (RICS) valuers that all banks and lending institutions use to value a property being offered as security.

What’s the minimum I can lend?

The minimum amount you can lend is £500. Loans can be made in any blocks of £500.

What’s the maximum I can lend?

There is no maximum amount you can lend.

Can I spread my risk by lending across multiple loan projects?

Yes, you can spread your risk by lending across multiple loan projects.

How long do I have to lend my money for?

Each lending opportunity is for a fixed Term. Some loans will be offered at shorter Terms and others for longer ones.

You can also choose to lend to different projects at different loan Terms and thereby spread both your risk and returns.

The Term will be clearly displayed in the Loan Offer Document.

Can I end my loan early?

Crowdahouse has a marketplace called Crowdabourse™ for Members to buy and sell their loan positions. You can advertise your loan(s) to other Members who want to buy existing loan stock. Transaction fees only apply if you sell your loan(s) early.

Do I need a solicitor when I lend?

If you decide to lend to a project, you should seek independent advice. Draft copies of standard paperwork can be made available to your advisers upon request.

You will need to provide proof of identity to the Solicitors acting for the Lenders, following standard Anti Money Laundering and Know Your Client rules. The Post Office Document Certification Service is one method you can use to certify your documents.

Are solicitors involved in the loan agreement?

A firm of Solicitors will be appointed by Crowdahouse to represent the legal ‘wrapper’ which will contain you and your fellow Lenders for each loan project.

This firm of Solicitors will act for the Lenders when dealing with the Borrower’s Solicitors, just like a standard property loan or mortgage.

The Solicitors will make sure that all the Crowdahouse lending criteria are met before the fully funded loan is passed over to the Borrower. They will also ensure that the first charge is put in place over the property being offered as security.

When do you need my funds?

When you commit to join a loan project, you are pledging to commit your funds. Unlike some crowdfunding platforms, we do not take your funds and sit on them until the project is fully funded. You will be given an estimated date by which the funds will be needed. When funds are requested, you will be asked to transfer them into the client account of the Solicitors representing you and your fellow Lenders. Crowdahouse does not handle or hold Lenders’ money.

What happens if a loan project is not fully funded?

You will be notified if a loan project fails to achieve its funding target and is withdrawn from the website. In this case, your funds remain in your own bank account.

When will my interest be paid?

The interest payment schedule will be specified in the Loan Offer Document and you will be provided with a copy at the start of the Loan Agreement. Interest will usually be paid either quarterly or ‘rolled up’ and paid at the end of the Term, when the Borrower will repay your capital (the original loan amount).

Do I have to pay tax on my interest payments?

Crowdahouse cannot provide tax advice. Your corporate situation will be different depending on your tax status and residency. Please seek advice from a qualified tax advisor in your territory, while UK taxpayers should also check HM Revenue & Customs (HMRC) rules for further information.

How safe is lending via Crowdahouse?

All loans are secured with a first charge over property and all property offered by Borrowers as security must be valued by members of the Royal Institution of Chartered Surveyors (RICS).

Crowdahouse also operates its Crowdasafe™ loan security scheme on all loans. This outlines how your money can be recovered in the event of a default by a Borrower.

While lending money against property may be safer than crowd investing in start-up companies, there are still financial risks that you should carefully consider before lending.

What is a first charge?

A ‘first charge’ is a legal right that gives you and your fellow Lenders first call on the property should the Borrower default on payments or be declared bankrupt. This means you and your fellow Lenders hold the property as security in case the Borrower fails to pay your contractual interest or breaches the Loan Agreement.

It is exactly the same security that Borrowers have to provide financial institutions such as banks and other mortgage providers when borrowing against property.

The Solicitors representing you and your fellow Lenders will ensure that the first charge is put in place over the property being offered as security.

What is Crowdasafe™ 2 Step loan security?

As well as the first charge over the property, Crowdahouse Members also benefit from Crowdasafe™, our proprietary fully managed solution to assist with recovery of your money – the cost of which falls to the Borrower. Crowdasafe™ will be triggered should anything go wrong with the Loan Agreement with the Borrower. Find out more here about the protection Crowdasafe™ can offer you.

What if the Borrower is declared bankrupt? How safe is my money?

In the unlikely event that a Borrower is declared bankrupt, whether as a High Net Worth Individual (HNWI) or Limited Company, the first charge ‘ringfences’ the property given as security. This means the property cannot be seized or added to assets to pay other creditors, such as banks or trade creditors. If a Borrower is declared bankrupt, Crowdahouse will appoint an Administrator to either continue the loan management or to dispose of the property, depending on the wishes of the majority of Lenders involved in the Loan Agreement.

What if something happens to Crowdahouse? How safe is my money?

You are not lending money to Crowdahouse but to the Borrower and your money is secured against the Borrower’s property by a first charge. In the unlikely event of something happening to Crowdahouse, this will not affect your loan, your interest payments or your capital. Any loan agreements exist entirely separately from Crowdahouse.

You transfer your pledged funds directly to the client account of the Solicitors who will be representing the interests of you and your fellow Lenders in the Loan Agreement with the Borrower.

Your funds will be held in the Solicitors’ client account and may not be used for any other purpose. Your funds are not handled or held by Crowdahouse at any time.

Is Crowdahouse authorised by the Financial Conduct Authority (FCA)?

Crowdahouse operates a business-to-business (B2B) only platform which does not involve Regulated Credit Agreements and does not need to be authorised by the Financial Conduct Authority (FCA).

Crowdahouse is currently only open to Members who are lending via corporate bodies (Limited Company).

What is Crowdahouse?

Crowdahouse is a business-to-business (B2B) property crowdfunding platform lending to business borrowers, always secured against property. Instead of lending to individuals, we’ve reduced the risk by offering you the chance to lend only to property businesses. You join a crowd to lend money in return for interest on your money. Your loan is secured with a first charge over property, just like a bank, and you pay no fees as a lender.

How can I become a Crowdahouse Borrower?

To borrow money from Crowdahouse Members, you must be a corporate entity – a Limited Company registered in the UK – or a self-certified High Net Worth Individual (HNWI) borrowing for business purposes.

Please contact us about becoming a Crowdahouse Borrower. We’ll need some basic information about your property or project from you. The Crowdahouse Team will review this and then contact you for further details.

What kind of fees does Crowdahouse charge a Borrower?

As a commercial Borrower, arrangement fees and charges apply to your loan. Arrangement fees only apply if your loan is successful and it is possible to add the arrangement fees to the amount you would like to borrow. There is also a small non-refundable application fee to cover the costs of the due diligence that Crowdahouse must perform before lending can take place and for creating the project’s Loan Offer Document that will be made available to Crowdahouse Members. The current fees and costs are outlined in our table of costs here.

How much will it cost me to borrow from Crowdahouse Members?

As a Borrower, you set the interest rate you want to pay. Crowdahouse can advise you on typical rates and terms that you would need to set in order for our Members to consider lending to you. Please contact us about your proposal for your property.

What’s the minimum amount I can borrow?

The minimum amount is £20,000. Fixed fees apply – see here.

What’s the maximum amount I can borrow?

There is no maximum amount, but please bear in mind that projects requiring larger loans may take longer to fund.

What’s the minimum term I can borrow for?

The minimum term is 6 months.

What’s the maximum term I can borrow for?

There is no maximum term, but please bear in mind that projects requiring longer loan terms may take longer to fund. Crowdahouse usually recommends a loan term of between 9 months and 5 years, but this is entirely flexible.

What information do I need to provide to Crowdahouse Members?

You will need to provide clear and accurate information to Crowdahouse, so that our Members have access to essential information about the loan opportunity and the property you wish to offer as security. You will also need to supply legal documents as confirmation where required. A RICS valuation carried out by a surveyor from our panel must be provided for each property offered as security.

Who is the owner of the property?

The Borrower is always the owner of the property. Crowdahouse Lenders simply lend against the security you provide – a first charge against the property.

What happens if property values go down?

As with any form of secured finance such as a mortgage, if the value of the property you have provided as security falls, you will still need to repay your Crowdahouse Lenders at the end of the Term and be liable for the full amount of the Loan Agreement.

What happens if I can’t pay the interest?

If you fail to make your contractual interest payments to your Crowdahouse Lenders, then procedures outlined in your Loan Agreement under our Crowdasafe™ loan security scheme will allow the Lenders to appoint an Administrator and take full control of the property. This protects our Lenders and allows Crowdahouse to make lending as safe as possible.

Can I borrow money for residential buy-to-let property?

Yes, you can borrow money for residential buy-to-let property. Crowdahouse operates a maximum Loan to Value policy of up to 85% LTV of the purchase price OR current value, supported by a RICS valuation. Please contact us about your proposal for your property.

Can I borrow money against property with existing tenants?

Yes, provided the tenants are occupying under a standard Assured Shorthold Tenancy (AST) agreement or standard commercial lease where relevant. Please contact us about your proposal for your property.

Can I borrow money to ‘bridge’ the mortgage lender’s 6 month ownership rule?

Almost all mortgage lenders insist on a 6 month ownership period before you can refinance. With Crowdahouse you can borrow money to refinance any time from the day of purchase. You can therefore use a Crowdahouse loan to ‘bridge’ your finances until you are able to refinance with a mainstream lender after 6 months.

Crowdahouse operates a maximum Loan to Value policy of up to 85% LTV of the purchase price OR current value, supported by a RICS valuation. Please contact us about your proposal for your property.

Can I borrow money for mixed use residential/commercial property?

Yes, in most cases this is possible. Please contact us about your proposal for your property.

Can I borrow money for commercial property?

Yes, in some cases this is possible. Please contact us about your proposal for your property.

Can I borrow money against my entire property portfolio?

Yes, but a first charge must be provided over all the properties you wish to borrow against. Please contact us about your proposal for your property portfolio.

Can I borrow money to finance property developments?

This is possible, but you will need to provide a first charge secured over property to cover the full loan amount and you may be required to obtain development insurance. Please contact us about your proposal for your development.

Can I borrow money to remortgage my own home?

No, only investment properties qualify for lending. Crowdahouse does not provide lending to owner occupiers.

Can I borrow money against property that is already mortgaged?

No, only properties with clear title qualify for lending. Crowdahouse does not provide second charge lending.

Can I borrow money for overseas property?

No, Crowdahouse currently provides lending only for property in England & Wales.

Can I increase my borrowing on a property that already has a Crowdahouse loan?

It depends on your original Loan Agreement with your Crowdahouse Lenders. Terms cannot be changed during the Loan Term. Please contact us to discuss this further.

What is Crowdahouse?

Crowdahouse is a business-to-business (B2B) property crowdfunding platform lending to business borrowers, always secured against property. Instead of lending to individuals, we’ve reduced the risk by offering you the chance to lend only to property businesses. You join a crowd to lend money in return for interest on your money. Your loan is secured with a first charge over property, just like a bank, and you pay no fees as a lender.

When was Crowdahouse founded?

Crowdahouse was originally conceived in early 2012 as the world’s first property crowdfunding platform. We launched in 2012 as an equity fund for investors in UK property.

We’ve been closely monitoring the fast moving crowdfunding market and witnessed the explosive growth of property crowdfunding in particular – with most of the founders of today’s platforms having been original Crowdahouse Members inspired by our innovation. In 2015 most people have heard of crowdfunding and peer-to-peer (P2P) lending and we feel the time is right to re-enter the market.

We re-launched in 2015 with our simple business-to-business (B2B) model that allows business owners to lend money to other businesses with a first charge secured against property.

How does Crowdahouse select Loan Projects?

We’ve simplified the property crowdfunding process to bring you loan opportunities handpicked by our experienced professional property team.

The Crowdahouse Team have a combined 70 years of experience in property investment and financial products, including insurance and risk profiling. We source loan projects from within the property industry and apply our knowledge and contacts to ensure that each project represents an opportunity that we can offer you and our other Members.

We aim for full transparency, including disclosing any conflicts of interest that may apply, so that you are fully aware of and understand all the risks before lending to any project. You are strongly advised to perform these checks or seek independent advice before committing to a project.

Unlike equity crowdfunding (buying property in a crowd or investing in risky start-up businesses), lending secured against property benefits from an extremely broad and open market with free tools available for anyone to carry out due diligence on a property before choosing to lend.

Comparable information is available from many sources and we use the same Royal Institution of Chartered Surveyors (RICS) valuers that all banks and lending institutions use to value a property being offered for lending.

Is Crowdahouse authorised by the Financial Conduct Authority (FCA)?

Crowdahouse operates a business-to-business (B2B) only platform which does not involve Regulated Credit Agreements and does not need to be authorised by the Financial Conduct Authority (FCA).

Crowdahouse is currently only open to Members who are lending via corporate bodies (Limited Company).

 

Contact Crowdahouse here

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