The property market
In our sector, it's common that extensions and further advances are agreed. Indeed, the property market could not operate efficiently if every loan that was one day overdue was forced into recovery action. A development or bridging loan is a commercial agreement that is not comparable to, for example, a residential mortgage. Some degree of tolerance is always required, as it gives the lender a degree of flexibility to resolve common situations that are beyond the control of the borrower, such as delays in planning permission.
Each time one of these is requested, we thoroughly review the borrower's track-record and the project's progress to ensure continued suitability before approving an extended term. The borrower in this instance would pay interest for this period from our funds.
We always aim to maintain a balanced commercial approach with borrowers and manage our relationships with them with care, vigilance and an equal amount of scrutiny to ensure full repayment of Lendy’s loans. And it’s our recovery team who are charged with ensuring loan is collected in as timely manner as possible. Even though it is evident in our loan updates, the bulk of the work goes largely unseen.
Our internal recovery team works tirelessly to recover loan sums. Lendy also spends a six-figure amount each year on legal fees for external law firms purely related to recoveries which is funded largely by the business itself rather than by investors – reducing Lendy’s profits in order to protect investors’ returns.
Over the last two years, we have also made a considerable investment of time and resources into making sure that we have strategies, processes and personnel in place to recover capital and interest for investors if a borrower does not make a repayment on time.
That comes alongside a similar investment and strengthening in our due diligence, underwriting, legal advice and valuation policies, to ensure that the loans on Lendy’s platform are thoroughly vetted to reduce risk.
To give investors a better understanding of what we do ‘behind the scenes’ to protect them, we thought it would be helpful to provide a couple of examples of how the repayment process works on Lendy loans.
The two case studies are of recent Lendy repayments, one where the process went smoothly and the loan repaid on time, and the other where the borrower did not meet the deadline, requiring significant work by Lendy to protect investors’ interests.
These case studies should illustrate how Lendy always prepares well in advance when any issues begin to develop on a loan, so that we are in a better position to recover monies for investors if a loan repayment does not happen on time. We are determined to work persistently to recover all loans and we have invested, and will continue to invest, in our repayment strategies as the business grows and evolves over time.
If you have any further questions, please do not hesitate to get in touch with us at firstname.lastname@example.org. You can also refer to our Collections and Recoveries Policy if you would like more detail on the steps we take on non-performing loans.
The Lendy Team