Downing Crowd Review
One of 4thWay's experts has written a Downing Crowd Review, summarising the key points in under 450 words, so that you can read it in about two minutes:
4thWay's Quick Expert Downing Crowd Review
Downing Crowd's simpler loans could make a nice addition to your lending portfolio
Downing has been lending investors' money since 2010. Its peer-to-peer lending branch opened in 2016, where individuals have lent £90 million to businesses that own property or energy projects.
Its most straightforward loans (fixed-rate bonds) are to such trading businesses as pubs and care homes, typically for renovation and expansion, or to renewable energy businesses with working installations that receive taxpayer-funded subsidies. The features and risks in Downing's seven-day and regular (monthly) access loans cannot be summarised simply.
Borrowers usually have a profitable history and earn an income already, which can lower the risk of a loan falling into trouble. The income isn't necessarily high enough to get a bank loan the size that Downing offers, so Downing caps the loan at 75% of its internal (not independent) valuation of the property or renewable plant, which is reasonable. Valuations here aren't always easy; property or plant sales could reduce losses on a bad debt, but not always eliminate them entirely.
Downing Crowd is convincing about its experience. It has approved the same kinds of loans for eight years and its people have complementary skills, including property loan approvals, development lending and renewable energy.
We haven't yet discussed with Downing Crowd its lending, loan-monitoring and bad-debt processes, but the information we have looks good. It's briefly outlined its credit-risk modelling, a technique for containing risks that's rarely applied – and harder to do – for these kinds of loans, but good to see.
Downing's record since 2010 has seen just seven out of every 100 borrowers suffer problems and less than 4% bad debts (all-time – not every year). This is highly satisfactory compared to similar competitors. Downing Crowd – the P2P lending division itself – is focused on the safest loans in Downing group's market and has no bad debts and zero problem loans.
Lending interest rates are low at Downing Crowd compared to similar competitors, but with its record they appear to be satisfactory for the risks involved.
Downing Crowd has been very open with 4thWay, although it needs to provide more information about its record to the public and falls short of enough information for a 4thWay PLUS Rating. Information for lenders on individual loans is good enough, but it could use less jargon and answer a few deeper questions.
Downing Crowd is owned by Downing LLP, an investment manager that earned profits of £6-£12 million in recent years. This provides lenders good safety in the event Downing Crowd needs to be wound down.
The minimum loan is £100. Over the course of a year I expect you could spread sufficiently across one or two dozen borrowers.
Downing Crowd's loans are available in an IFISA.
Visit Downing Crowd.
Downing Crowd also has a product that blends lending with part-ownership in property. Plus, it sells fixed-rate bonds that involve lending to other Downing group companies or to businesses it owns. These are not always peer-to-peer lending and are outside 4thWay's scope. Consider lending in just one loan where Downing is the borrower.
Independent opinion: the opinions expressed are those of the author and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.
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