Core Innovation Capital has raised approximately $71.5 million for a second venture capital fund; the fundraising round included 17 investors; the company invests in fintech companies focused on mobile and efficient financial products; it has invested in Mirador, Nova, Banking Up, Trim, NerdWallet, CoverWallet, Oportun and Ripple.  Source

Why the Loan Tranche Model works for P2P Lending

Proplend Logo

[Editor’s note: This is a guest post from Benjamin Butterworth, Head of Lender Relations at Proplend. Proplend is an exhibitor at LendIt Europe 2015 on October 20-21. In this post, he talks about Proplend.]

Peer-to-Peer lending has undoubtedly revolutionised the traditional banking and lending industries. Led by the adoption of new technology and with the ability to draw and process information quickly it has left the traditional finance sector napping.

At Proplend, we continuously apply the latest technologies adopting them alongside traditional lending models to make our offering as efficient, transparent and inclusive as possible.

By adopting a form of the securitised loan model and applying it to Peer-to-Peer lending, we have been able to take a traditionally institutional investment class, Commercial Real Estate Debt, and opened it up to a much wider investor market.

To truly disintermediate the traditional lending market we recognise that we not only need to make the Proplend offering open to the widest range of investors possible, individuals, family offices and institutions, but also offer them the ability to invest in the same loans. In order to do this we have to cater to their different attitudes towards risk and return.

With this objective in mind we developed the Proplend Loan Tranche, the first such model in the UK that gives investors the most choice and transparency and the opportunity to invest into a wide variety of loans, secured with a first legal charge over the property and offering returns of 5% to 12% pa (after fees, but before bad debts and taxes).

How It Works

The Proplend Loan Tranche splits each Loan up into three Loan-to-Value (LTV) based tranches, this allows Lenders with differing risk tolerances and return requirements the opportunity to invest in the same loan alongside one another.

Proplend_Loan Matrix 1

Proplend_Loan Matrix 2

Proplend_Loan Matrix 3

Tranche A investors have the opportunity to participate in every loan rather than waiting for a 50% LTV loan. Many investors will also choose various loans with different Tranche levels, in order to diversify their portfolio.

We strongly believe the Proplend Loan Tranche model delivers on our objectives and that our Tranche A investment level is one of the safest P2P loan investments on the market, with 200% capital protection on a first legal charge against an income producing commercial property.

*Before fees, bad debts and taxes

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