We analyse over 500 projects a month and handpick the best for you.
Our team of experienced underwriters review every property project, considering key factors such as national, regional and local market conditions. They assess characteristics, demand, returns, use, complexity, legislation and criteria risks. All of those form part of the score generated by Sourced Capitals funding matrix to support the credit committee in making a decision.
The unique structure of the Sourced Group means that all borrowers are Sourced Franchisees, who have been through a rigorous training schedule whilst receiving support from an experienced and dedicated team. The metrics input into the funding matrix include the borrowers experience, repayment of previous projects, credit history and score, power team and transactional risk.
Risk Categorisation and Pricing
All loan proposals received by Sourced Capital are subject to rigorous due diligence, using the significant levels of experience and directly-relevant sector knowledge available within the Sourced Capital Team, together with external independent professionals where appropriate. The only proposals brought to the Sourced platform and made available for loan investment, are those that have completed the due diligence process and received full credit approval. All loans available for investment will be deemed to fall within the published risk appetite.
All new loans will be subject to analysis using a credit risk model. Whilst this model does not determine if a proposal ultimately receives credit approval, it does enable specific data for each loan to be input and a risk categorisation to be determined. The risk category for each loan is clearly detailed within the credit report for each new loan. The loan categorisation will be determined by assessment of different characteristics of the loan, relating predominantly to the borrower experience and credit standing, the nature and quality of the project to be funded, the robustness of the exit strategy and the level of loan security.
Lenders should be aware that peer to peer lending carries a risk of loss to your capital, should borrowers be unable to repay their loans. The risk categorisation is intended only to provide a means of comparison between different loans based upon constant data inputs. The loan categorisation does not and is not intended to provide any assurances as to which loans may or may not experience repayment issues.
When all the loan data is input into the Credit Risk Matrix used by Sourced Capital, this will apply different weightings to specific inputs (e.g. LTV), enabling appropriate changes to be made by Sourced to reflect the wider economic and environmental factors at any time. There are six potential outputs, currently detailed as A-F. In turn, these are then used to produce a risk categorisation of either Lower (a rating of A or B), Medium (a rating of C or D) or Higher (a rating of E or F).
The risk categorisation is used by Sourced Capital to help determine the interest rate paid by the borrower and the interest rate to be paid to lenders. In addition to the due consideration given to the risk rating, other factors do also influence the interest rates on individual loans at different times. These additional factors include the need to fully consider the macro economic environment and the likely demand/expectations from investors on each loan. Larger loans and longer-term loans will be likely to carry a premium. The level of monitoring required by Sourced Capital will also vary from loan to loan and this can be reflected in the rates
Within the credit report for every new loan, the interest rate payable by the borrower, the interest rate payable to lenders and any fees payable by the borrower will all be clearly shown.