Most Peer-2-Peer/P2P loans are unsecured loans to individuals or businesses. Many Peer-2-Peer/P2P lending platforms specialise in specific types of loans, e.g. student loans, commercial and real estate loans, payday loans, unsecured business loans, leasing and/or factoring type loans.

The interest rates on Peer-2-Peer/P2P loans are set by Investors/lenders that compete for the lowest rate. The lowest interest rate is achieved using a reverse auction model or is fixed by the auction platform based on an analysis of the borrower’s credit history. The interest an Investor receives should reflect the risk they are taking. This is because the Investor takes all the risk and their investment is rarely protected in any way.

• Loans are not protected by government guarantee/insurance
• The platform does not take a ‘first loss’ position
• Risk is entirely borne by the Investor
• Commitments are mid-long term, i.e. 3-5 Years
• Yield is not fixed or certain
• Returns are in the high yield, high risk range
• Early redemption is rarely an option

The reasons outlined above is why borrowers perceive Peer-2-Peer/P2P loans as expensive (relative to traditional bank borrowing). And also explains why Investors regard Peer-2-Peer/P2P lending as high risk.

Investabill™ ETR are not loans. They are Exchange Traded Receivables [ETR] that the Investor buys at a discount to the Face Value of the ETR. When the ETR is paid in full, the investment quality debtor pays the Face Value and this is how the Investors’ yield is generated.

Investabill™ ETR offer a unique alternative to bank deposits with:

• 100% Buy rate execution (i.e. yield)
• 100% net allocation & no management charges
• 100% ETR Repurchase (see protection from AIG)
• Flexible & no long-term commitments
• Buy rate/interest is annual yield net of all costs
• Medium to high yield return range
• No early redemption fees

In addition to the above, Investabill™ ETR are only available to Investors that have received qualified financial advice from an Intermediary.

 
The Committee of European Securities Regulators [CESR] provides guidelines for generating a Synthetic Risk & Reward Indicator [SRRI] value for investments. The lowest risk SRRI value is 1 and the highest risk SRRI value is 7. The SRRI value is designed to provide Investors with a meaningful indication of the overall risk and reward profile of investing in products like Investabill™ ETR. Investabill™ ETR has a SRRI value of 2.