13th August 2015 Helen Yuet Ling Pang

Q&A with a Crowdahouse Member

We were recently asked some good questions by a new Crowdahouse Member which I thought would be useful to share with you here. Although detailed answers can be found in our FAQs, we realise that you may not have the time to read through them all. So here are your fellow Member’s questions and my answers.

How safe are the Crowdahouse Borrowers?

The Borrower must be a limited company or High Net Worth Individual (HNWI), and provide a property as security in the form of a first charge. The Borrower must also provide answers to a lengthy application form, after which all the information is thoroughly checked by us and the solicitors representing the crowd of Lenders. We turn down all projects that do not meet our strict requirements or that we regard as risky and unsuitable for our Members. And in the unlikely event that the Borrower misses a payment or defaults on the loan, then our proprietary Lenders’ protection system called Crowdasafe™ steps in to administer the property on behalf of you and your fellow Lenders. Any property income is diverted to pay your interest, or if necessary the property will be sold on your behalf to recover your money and any costs.

Is it a problem if I don’t have my own solicitors to act for me as a Lender?

We always suggest that you obtain independent advice before lending. However, you don’t have to use your own solicitor. The loan and the paperwork between Lender and Borrower is prepared and dealt with by solicitors acting for you and your fellow Lenders as a group. There is no charge to you for this service and no lending fee either (many peer-to-peer platforms charge lenders a lending fee). So you are legally represented and the loan is protected with a first charge against the borrower’s property, just as a bank would hold if you got a mortgage. There’s a lot of legal paperwork involved to provide maximum protection to the Lenders but it’s at no cost to you.

Do I pay my funds directly to the Borrower’s bank account?

No, your money is paid directly to the client account of the solicitors’ firm representing the Lenders. The Borrower only gets access to your money when the conveyancing process has been completed by the solicitors dealing with the loan on behalf of the Lenders. Crowdahouse does not hold or handle funds at any point. First you pledge the amount you want to lend when you fill in the Lender application form. You’re then given a date by which the funds need to be transferred to the solicitors’ client account. Only when all the legal paperwork is completed does the Borrower receives the funds from the solicitors.

If you have any questions while looking at our current lending opportunities or FAQs, then please ask me.

 

  • Helen Yuet Ling Pang

    Director of Operations

    Helen Yuet Ling Pang
  • Helen Yuet Ling Pang

    Director of Operations

    Helen Yuet Ling Pang

About 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.

 

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