1. Capital Risk

This is the risk that you may lose the capital you have invested. All loans made through the Platform are secured against UK property, however your capital is at risk. Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. You should not invest more money through the Platform than you can afford to lose. In the event you suffer a loss of capital, you are not entitled to compensation from the Financial Services Compensation Scheme (FSCS).

2. Credit Risk

This is the risk that a borrower may not repay all or part of a loan, and that you may lose the capital you have invested, or the interest associated with it. Whilst Sourced has a robust risk assessment process with all borrowers and property being vetted before any loans are finalised, the risk a borrower may default is real. All loans made through the Platform are secured against UK property by way of a first legal charge to protect you if a default does occur.

3. Security Risk

This is the risk that the security taken against each loan (in all instanced UK property), may provide inadequate cover for the total capital and interest due to you, under the terms of your investment on the Platform.

4. Illiquity Risk

This is the risk that you will be unable to gain quick access to the capital you have invested and the interest you are due to earn as the lender. The Platform does not operate a secondary market function and you therefore are unable to sell loan parts to other investors, and you must wait until the loan reaches maturity and repayment before you can withdraw these funds.

5. Operator Risk

This is the risk if Sourced, as the Platform operator, were to stop trading for any reason there would be a risk that we would no longer be able to manage borrower repayments to you. Should it be necessary, contingency plans are in place for a third party to take over the administration of the loans to ensure orderly repayment of capital and interest. We have integration into Goji to give our Customers the best experience possible. Your funds are held in a segregated client account, this ensures your funds are separate from our own business funds. Your money therefore does not form part of our assets and would not be available to creditors in the event of insolvency.

6. Portfolio Risk

This is the risk that you increase your exposure through the lack of diversified investment. Diversification means the ability to spread risk by investing in more than one loan and choosing different loan parameters such as: loan to value (LTV), type of borrower and length of loan.

7. Performance Risk

This is the risk that past performance is no indication of future performance. The value of property may go down as well as up and you may lose the capital you have invested.

If you are in any doubt about the loan you are investing in, the borrower or the underlying property asset, you should obtain independent advice first.

Managing Risks

1. Regulation

Sourced Capital is the trading name of Peer Funding Limited (Company Number 08773883), a company directly authorised and regulated by the Financial Conduct Authority, to ensure we operate transparently and put our investors at the forefront of our business. Sourced Capital (Peer Funding Limited ) are registered under firm registration number 668078.

2. Security

The money you lend on the Sourced platform is secured with a first legal charge against UK property. The first charge means that should a loan default, the Security Trustee; Jark Security Trustee Limited, has the authority to take control of the project and ensure the best possible outcome for all investors.

3. A maximum loan to value

Sourced have a maximum loan to value of 70%. This means we will not lend above this threshold, leaving margin to help protect investors, should a default occur, and the property has to be repossessed and sold. Whilst reducing the risk of capital loss, the presence of security does not guarantee that lenders will always receive all their capital back.

4. Due diligence

Before a loan is listed on the Sourced platform, the underlying project will go through a due diligence process to ensure it is economically viable. This process is supported by independently verified RICS valuations and qualified reports from industry specialists where necessary.

5. Retention

After a loan is funded on the Sourced platform, money allocated for a property purchase is released directly to the borrower’s solicitor so the transaction can be completed. Money allocated for the completion of property works, whether this be for a refurbishment, conversion or development, is held in an FCA regulated client account and is only released in accordance with a pre-agreed drawn down schedule. This means we will not release your money if issues occur and it will be retained to allow the project to be finished or used as per the desecration of the Security Trustee.

6. Knowing our borrowers

Sourced offer investors a unique structure in that we only lend your money to our franchisees. Before this happens, each borrower application is reviewed in detail by our credit risk team with only successful applications being listed on the platform for lenders. Sourced franchisees are vetted before joining the network and complete regular detailed training courses with industry experts as part of their franchise obligations. Each borrower is closely supported to ensure they can complete the projects that your money helps fund.