David Jelly, Founder & CEO, Property Bridges
During times of significant change or upheaval, major financial institutions often react in a cautious manner.
They tend to adopt a ‘wait and see’ approach are becoming slower to commit to new business.
This corporate reaction can end up compounding the economic impact of the recent health emergency.
An alternative method of funding, peer-to-peer lending, which was born out of the last crisis is now starting to play an increasing role during the Covid-19 pandemic.
Peer-to-peer lending is the practice of lending money to unrelated individuals or businesses, ‘peers’, without going through traditional financial intermediaries such as banks, often through online peer-to-peer lending platforms.
Both the investor and the borrower benefit, as the lender achieves higher interest rates and the borrower lower interest rates than would be on offer if either had gone through a bank.
Property Bridges is Ireland’s peer-to-peer property platform. Its ever-growing community of lenders has already helped with finance for new home builds in various locations across the country and is now stepping up its efforts to support the construction industry during this time.
The business is being run by David Jelly, James Twomey and Paul Curran, as well as several experienced property analysts and due diligence experts.
“For several years now funding for the property industry has been dominated by foreign investment funds. Yet for individual Irish investors it can be difficult to access the property market for various reasons, so we wanted to change that,” said Jelly.
“Basically, we’ve created an online platform and legal infrastructure that allows ordinary investors invest in high-quality construction projects, which were once reserved for only banks and institutional investors.”
He added: “Registered investors can then browse the opportunities on our online platform and decide which projects they want to invest in. It provides users with a great deal of flexibility and control of their money.”
In the current lending environment, funding for many low risk and clearly ‘bankable‘ projects has become difficult to obtain.
This is where private investors can benefit by investing in these projects through the Property Bridges investment platform.
Jelly said: “Property Bridges’ experienced team will undertake robust due diligence on each loan and take first legal charge security, so our investments are suitable for new and experienced investors alike.
“We are offering a really competitive interest rate – from 8 per cent to 9.5 per cent. This is really appealing at the moment since banks are offering zero and in some countries interest rates from banks will be negative.”
He added: “There is a housing crisis in Ireland and we have realised the importance of having a home in a pandemic. The shortage of housing is only going to get worse post Covid-19.
“Property Bridges provides finance to small and medium-sized developers around the country so when you work with us, you are simultaneously investing and helping your local community by helping to build new homes. We also lend to social projects and some of our properties will end up being social housing.
“Less hassle and less costly than buy-to-let investment, we believe P2P property platforms provide the perfect entry into bricks and mortar investment while offering highly attractive returns.”
It is important to note, despite loans being backed by physical assets, risks are inherent with property development.
Property Bridges makes all endeavours to mitigate the risks involved, by lending at conservative loan-to-values and undertaking robust due diligence on every project. Some risks such as project delays and a falling property market cannot be fully eliminated.