What we do
P1 Capital Partners focuses on asset backed short-term lending from 3 months to 36 months. All lending is secured on UK property by a legal charge for 100% of the value of the loan, and all loans are a maximum of 75% of the property value.
Central to our business is a disciplined approach to risk management, allowing us to provide the 100% Capital Guarantee.
We offer bonds to investors on a 1, 3 and 5 year period paying 7%, 8% and 10% respectively. Investors have the option to receive Growth or Income.
The core components are:
1. Loan Security
Independent valuations on all properties
Independent solicitors prepare all loan documents to ensure security / legal charge is obtained
Max loan of 75% of property / value of development
Personal guarantees are obtained in most cases
An independent law firm oversees the transaction to ensure the loan is in accordance with the bond documentation and has adequate security to protect bondholders.
Complete review of the borrower’s assets / liabilities prior to any loan
In the case of a development / refurbishment a review of the borrower’s property development experience
Exit / Repayment – due diligence on the exit / repayment strategy.
The repayment strategy is normally (i) sale of the property (ii) Refinance with a traditional lender or (iii) Disposal of other assets i.e. sale of business
3. Investor Protection
Money sent by bondholders is held in a P1’s independent solicitors’ client money account.
Once a property loan has been identified and approved by the P1 Credit Committee the money is transferred from the Client Money Account to the independent solicitors to complete the loan and register the legal charge as security
Asset backed lending
Demand for UK short-term lending in the property market has grown from around 0.9 billion in Sept 2012 to an estimated £4.3 billion in June 2017.
Historically, this demand was met primarily by traditional banks supported by alternative lenders. Many traditional banks have tightened their underwriting requirements for short-term lending and are focused on building capital reserves. The approval process and lending criteria of the banks that remain in this market is generally slow and bureaucratic.
Specialist alternative lenders like P1CP have a robust and streamlined lending process. We are able to reach decisions within days enabling borrowers to proceed quickly.
It is estimated the UK needs to build 340,000 new homes per annum until 2031 to meet the current housing shortage. The Government is attempting to encourage developers to build more homes by improving the planning process and introducing incentives such as the Help to Buy scheme.
P1CP works with small developers (defined as under 10 million development value) to provide financing solutions.
The Market opportunity and current housing shortage present an opportunity for bondholders to receive an 8% return secured against property. P1CP believes this investment is competitive compared with other returns in the market.
P1 Capital Partners has an experienced team with extensive property, legal and finance experience and disciplined risk management approach to protect bondholders and maximise the market opportunity.