Each loan application is individually assessed
Our credit risk team personally review each and every loan application received. They use a number of 3rd party credit risk rating models as well as our own bespoke credit risk model to help determine the relative risk of each loan. All loans that are listed are rated from A+ to F. A+ being the lowest risk and F rated loans the Highest risk. Our risk ratings are designed to help you:
- Assess the relative risk of each investment opportunity
- Highlight the variance in risks in each investment
- Help you make an informed investment decision
- Allow you to only invest in loans you're comfortable with
What We Assess
1.
Financial history of the business
We look into the business's trading performance by assessing filed and management accounts
2.
Credit rating
Using a 3rd party credit rating agency we look at the business's current and historic credit ratings
3.
Director History
We look into previous directorships, connected businesses as well as their personal credit score
4.
Ability to Repay
We assess their ability to repay you given their financial history, cash flow and recent trading performance
5.
Security
We investigate the reliability of the security and the approximate value it would realise if called upon
6.
Existing Finance Arrangements
We'll assess what other loans they have outstanding, who they're with and whether further funding would be suitable
What does this mean for you?
The credit risk assessment that our team carries out is meant to act as a starting point for you when you start investing.
Using the credit rating given to each business and the information on each loan profile, you should make your own informed lending decision.
We provide a range of investment opportunities for you to choose from, the ultimate decision when to invest, how much to invest and at what rate to invest is yours.
Passive vs Active Investment
On rebuildingsociety.com you can invest passively by setting up your automated lending preferences using BidPal or you can take a more active approach by studying and reviewing each lending opportunity.
As an active lender, you'll spend more time assessing each investment, but stand to potentially earn more. You have to weigh up the time spent vs the reward.
BidPal and the BuyBack Guarantee are great features for those wanting to take a more passive approach to lending. BidPal auto invests according to your preferences and loans with a BuyBack Guarantee helps reduce some of the risk of investing in P2P.
Defaults and Bad Debt
Any loan that is 90 days behind with it's loan repayments will be automatically declared as a default. In addition where we believe that a borrower is in breach of its loan agreement or has no intention of adhering to the repayment schedule, our team will re-categorise the loan as in default.
Whenever a loan is either behind on it's repayment schedule or there is significant information regarding a loan our team will update the relevant loan profile via the 'Updates tab'. You can choose to subscribe or unsubscribe to these updates if you'd like to receive email alerts. You can also access all loan updates form your lender dashboard. All details of loans that are classified as being in default will appear on your lender dashboard under 'Est. Loss.
Recoveries
Whenever a loan falls behind its repayment schedule, even by just one day, our debt recovery team will begin taking action to ensure that the loan repayments get back on track or will recommend that further legal action is taken.
Loan security provides a means by which we can attempt to recover the debt from the business and it's directors. Whilst all loans on rebuildingsociety.com carry some level of security, loan security does not guarantee that it will always be possible to recover all your funds.
Debt recovery can often be a lengthy process and can take any where from a few days to a few years to successfully recover your funds. The length of time it takes and the chances of a successful recovery vary depending on the type of security available and the circumstances around the default.
Bad Debt
Where we have exhausted all avenues of debt recovery a loan will be classified as a Bad Debt. This means that there is no further prospect of the loan being repaid. This essentially may result in a loss of your capital.
All bad debt associated with your account can be viewed on your dashboard under 'deductions'.