How investments happen

Our team of in-house experts have over 100 years of combined experience and all of our property investment opportunities go through our stringent due diligence process before they make it onto the platform.

1

Deal selection

We receive numerous loan applications from property developers and carefully evaluate each one against over 50 criteria - only those that meet our underwriting standards will proceed to the next stage.

2

Credit Committee

If a deal passes our due diligence process it will be analysed by our credit committee.

3

Underwriting

Most property finance proposals do not pass the first stage of our stringent review process.

CapitalRise
4

investing

Exclusively for members, we post the investment opportunity on our platform. Within the deal room you can review all the relevant documentation and decide whether to invest. It only takes a few minutes.

5

deal closure

We provide regular quarterly updates on the invesment and at the end of the loan term the borrower will repay you, plus your returns.

you

Our review process

Most property finance proposals do not pass the first stage of our stringent review process.

100
Just 2% of applications are accepted (based on property lending inquiries submitted and reviewed by CaptialRise since inception in May 2015).

Our due diligence checks
are focused on 4 keys areas:

  • THE DEVELOPERS

    We only lend to developers who have significant experience and a consistent proven track record of profitable financial performance which we believe provide a high probability of success in the future.

    When assessing the borrower, CapitalRise obtain evidence of the historical success of similar projects they have undertaken by reviewing resumes, references, financial statements and visiting completed sites.We also assess the capability of any supporting teams by reviewing their track record on similar projects, their financial statements as well as the relevant contracts, guarantees and warranties between themselves and the borrower.

    For each investment CapitalRise will provide a risk rating that is in line with our selection criteria. One rating tells investors the number of projects the borrower has completed.

  • THE PROPERTY

    We only offer properties that fit our criteria. These are the finest homes in the most sought after areas that have a consistently high market demand. We strictly follow real estate industry standard definitions of Prime Property.

  • THE BUSINESS PLAN

    We only back proposals that have a clear and sensible business plan which we believe makes financial sense. We then stress test that plan to ensure investors are still more more likely to get repaid if things take longer than forecast.

  • THE FINANCIALS

    CapitalRise only backs proposals that have the appropriate profitability and rate of return to our investors for the risk being taken. Our average loan-to-value is 66% and we ensure your investment is secured by a first or second legal charge against the property.

    Our stringent due diligence checks are designed to minimise developer/default risk, however they do not eliminate it. See Key Risks for more information on this.

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The capitalrise team

CapitalRise's credit committee are tasked with ensuring the standard of the
opportunities launched to investors is of consistent high quality

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Protecting your investment

When you make an investment you are providing a loan to the borrower that is secured against prime property.

Investing in property means that there is a physical asset we are legally allowed to secure your investment against.

Each loan is structured slightly differently, but your investment will either have a first or second legal charge on the property.

A first legal charge means CapitalRise investors will be in the first group to reclaim capital in the event of a forced sale of a property.

A second legal charge means CapitalRise investors will receive their capital after the first group.

We create a new dedicated subsidiary property company of CapitalRise for each investment which ring-fences each loan and investment. This property company provides the loan to the borrower and issues bonds to investors.

Being issued bonds by this dedicated company ensures your investment is ring-fenced from other CapitalRise investments. Should a loan in another deal default that will not impact your investment.

We will always make it clear on each opportunity where your investment lies.

You can find out more about how loans are structured and how this can impact how your investment is secured below.

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How we use your investment

We offer property developers two types of loans. You choose which type you invest in.

The Structure of a Loan

When will a property developer borrow money?

Bridging loans

Used when the property developer is waiting to start their project.

Construction loans

Used during the development of property. These are normally provided in instalments throughout the project.

Sales period loans

Used when the property is complete and on the market.

How your investment is structured

For each investment CapitalRise offers to investors we create a new dedicated subsidiary property company. The role of this property company is to provide the loan to the borrower that is funded through the issuance of bonds to investors.

Hover over each numbered block for more details.

1 CapitalRise
and
other
prefunders
CapitalRise and other prefunders initially fund the loan
2 Borrower The subsidiary property company issues the loan to the borrower
3 The property The subsidiary property company holds a legal charge and other security over the property
4 Investors The subsidiary property company issues bonds to investors. Funds are used to repay CapitalRise and the other prefunders.
Subsidiary property company

Creating a new dedicated subsidiary property company for each investments means we can ringfence the activities associated with each investment opportunity.

This means that the performance of the underlying loan on one investment opportunity will not impact the performance of another.

CapitalRise uses pre-funders to ensure we can provide the borrower with the funds on the day they need them. Investors are then issued bonds by the dedicated subsidiary property company. The funds then repay the pre-funders.

CapitalRise is one of the pre-funders and the others are entities associated with us.

The dedicated subsidiary property company is the beneficiary of all the security associated with one particular investment.

This will include legal charges against properties investors are lending against. I can also include legal charges against other properties owned by the borrower and Personal Guarantees for example.

When a borrower repays their loan they do so to CapitalRise’s solicitor acting on behalf of the dedicated subsidiary property company.

The solicitor will then make payment to CapitalRise’s custodian who manages your Client Money (your funds that are not invested). CapitalRise then instructs the custodian to pay any due capital or accrued returns into each investor’s dedicated cash account.

Want to become a member?

Apply now - become an eligible investor in minutes

Due your due diligence to understand the risks

Start investing and accruing returns!

Find out more about
investing with CapitalRise's IFISA
IFISA
Learn more about
the CapitalRise Team
about us

Capital at risk. No FSCS protection. See key risks.