Lendermarket is pleased to announce that, after a fantastic year in 2021 which saw platform growth of 300% and client growth of 200%, we will be welcoming a new loan originator to our operations. The financing company Credory will be partnering with our platform from May 2022 onwards, enabling us to become a multi-lender platform and strengthening the investment options we can offer to clients.
Credory is an Estonian SME-financing company specialising in real estate-backed loans. The company was founded by a selection of Estonian real estate and banking experts and is primarily financed through the owners’ equity. At present, Credory provides commercial loans to SMEs based in Estonia that are collateralised with real estate.
A multi-lender platform
At Lendermarket, we felt that now was the perfect time to expand our operations and become a multi-lender platform, allowing us to appeal to additional demographics. Our partnership with Credory will allow us to add further diversity to our product range and appeal to investors looking for lower-risk loans. Given the current economic climate, we feel these loans will provide attractive opportunities for investors located in numerous geographical areas, strengthening our position within the P2P-lending space.
New loan categories
As noted above, Credory solely issues real estate loans, which tend to fall into three distinct categories – business loans for expansion purposes, loans for small real estate developments, and bridge loans for real estate transactions. Credory’s loans can vary in size, ranging from €25,000 to €500,000, with the average loan valued at €100,000. In terms of length, Credory primarily issues loans with a term of six to 24 months, although the average duration across the entire portfolio tends to be approximately 15 months.
Real estate-backed loans are ideal for investors with a low risk appetite, offering a way to diversify investment portfolios while maintaining an attractive risk-return profile. Furthermore, one of the main concerns we’ve noted in the P2P market is that lending platforms tend to have a limited selection of low-risk options. By partnering with Credory, we aim to solve this issue and cater to this section of the market.
Following on from this point, as Credory’s average Loan-to-Value ratio is less than 65%, this highlights the secure nature of the company’s investment products. In addition, the default rate on these products currently sits at 0%. These attributes, combined with the solid returns on offer, ensure our suite of products will provide opportunities that appeal to investors with a wide range of financial goals.
As we progress into 2022, Credory intends to issue around €4m worth of loans throughout the year, with €2.5m to €3m designated for use in the partnership with Lendermarket. Credory has signed an exclusive agreement with Lendermarket to use the platform as their sole financing source. Ultimately, this will allow Credory to offer interest rates of 7% to 9% per annum on their loans.
At Lendermarket, our clients are always at the forefront of our minds, which is why we believe Credory will enhance our investment service. Understandably, there may be concerns about the relative experience that Credory has, combined with the level of returns offered compared to other P2P products. We understand these concerns, although we believe that the benefits provided to our clients through the partnership will compensate for these concerns and ensure that any worries regarding these aspects are unwarranted.
In addition to this, all of the loans that we offer through our platform are secured through buyback guarantees. This feature is designed to protect investors as it requires the loan originator to automatically repay the investment amount (plus any accrued interest) to the investor if a loan goes overdue for 60 days. Ultimately, this feature removes most of the worry related to potential default that is associated with investing in P2P loans. In turn, this also lessens any concerns investors may have about the implications of the upcoming partnership with Credory.
Ultimately, our partnership with Credory is an exciting time for the company, as it highlights Lendermarket’s intention to expand in 2022 and capitalise on the progress made in the last few years. We understand that our clients require diverse options to cater to their unique needs, which is why this transition to a multi-lender platform will be vital to our expansion.