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Loans on rebuildingsociety.com carry varying types and levels of security, but what does this mean?

What is security?

Loans on rebuildingsociety.com can carry the following types of security.

• Personal Guarantee
• Corporate Guarantees
• All Asset Debentures
• 1st and 2nd Priority Charge Legal charges over property

Each loan profile will highlight what security is being offered on the particular loan. The headline information can be found on the Overview tab. Every loan carries at least a Personal Guarantee unless otherwise stated. Security on a loan is the instrument that will be used to recover funds owed should a borrower fall into arrears and their account declared to be in default. The security will allow you or rebuildingsociety.com on your behalf to try and recover the money owed to you. Therefore, generally speaking, the more security a borrower offers, the greater the chance of recovering the debt if things go wrong.

Should it affect my lending decision?

In deciding to lend to a business, the security offered by the borrower should act to give you a higher level of comfort in your decision. While each lender has their own underwriting system and investment strategy, generally speaking when assessing a business before bidding to lend, you should carefully assess the merits of the business itself rather than solely focusing on the security being offered. This is because loan security should only be a backup to the lending decision itself as it only becomes a factor should the business be unable to maintain repayments and default. Many lenders may consider it prudent to first assess the business's ability to repay the loan through an assessment of the accounts and other information supplied before assessing the security as a later consideration. It is important to note that recovery of funds owed to you is never guaranteed.

How is the Rebs loan book secured?

We have some of the most stringent criteria for security, compared to other platforms. While our competitors may offer loans of over £200,000 'unsecured' (without a personal guarantee, or with a personal guarantee but nothing else), we always show the security available on each loan.

How has this changed over time?

We try and source a variety of different businesses with a variety of different security so that there are opportunities to suit a diverse range of risk appetites. We’ve taken a look into the level of security offered on all loans. Taking into account that many loans carry more than one type of security, we have only taken into account the 'primary' security on the loan. So for example; where a loan is secured on a PG, Debenture and 2nd Charge, we regard the 2nd charge as the 'primary security' as it is generally regarded as the strongest of the three and as such we have not included the other 'secondary security' in the graphs below. The below pie chart illustrates the current primary security levels of all active loans in the Rebs loan book. 70.99% of the current active loan book is secured with more than a personal guarantee, with over 32% currently secured on a legal property charge. Over time our lender base has asked us to provide them with more property-secured lending opportunities, a call we have tried to answer. [caption id="attachment_259084" align="aligncenter" width="566"] * Data takes into account all loans fully funded and accepted over the course of the loan book[/caption] This graph shows the change in the percentage of all loans, over the years secured by the various primary security types. As you’ll be able to see, the number of loans secured only on a personal guarantee has decreased year on year since 2014, whilst the proportion of loans secured by 2nd charges has increased year on year at a higher rate. This year already, we have secured more of our loan book on 1st and 2nd legal charges than any year prior to it. Going forward, we will continue to transparently relay the security available on our loans.