The landscape for investors has been rather bleak over recent years. With the Bank of England deciding to maintain the Base Rate at 0.5% for yet another month, it is not surprising that investors are finding it tricky to find healthy returns. This has led people to seek alternative routes by which they can grow their funds. In a recently published article, 10 ways to invest that don’t involve the stock market were suggested. These ranged from investing in precious metals to becoming a silent partner in a small business or investing in Peer-to-Peer lending.
What is Peer-to-Peer lending?
Peer-to-Peer (P2P) lending is the process by which investors lend their money to borrowers in return for a higher than average rate of return. Rather than saving, investors are actually lending their money to individuals and businesses to help them grow.
The pros and cons of P2P lending
With all investments, the pros and cons are different – you simply have to decide which best fits your investment criteria. P2P lending involves lending investor’s capital to individuals and companies and therefore sees an investor’s capital at risk. However, with the risks come the pros; P2P lending cuts out the middleman and offers a higher rate of return than typically offered by high street banks.
The alternative
Wellesley & Co. is a Peer-to-Peer lender with a simple concept and unique business model. We make asset-backed loans with our own capital and only lend funds to assured borrowers. Our model is different to any P2P lender in the market as we take risk on every loan that is made with our own capital. All the loans that we make are funded by shareholder capital in the first instance. Therefore, when we make loans, we are not only lending customers’ cash but also our own. Our products pay a fixed rate of interest: the longer that you commit your funds, the higher the rate of return that will be paid whether your funds have been matched to borrowers on the platform or not.
Broadening your investment portfolio
As any investor is aware, it is important to have a broad investment portfolio in order to spread the risk to your funds. The same rule applies to Peer-to-Peer investments: it is recommended that P2P investments make up a segment of your investment portfolio and you do not place all of your funds into any one place.
If you would like to know more about what Wellesley & Co has to offer, please contact our London-based Customer Service Team on 0800 888 6001 or e-mail us at [email protected] .