Are 2nd charge loans as safe as 1st charge loans?
Jun 21, 2018 10:34:25 GMT
r00lish67, michaelc, and 1 more like this
Post by aj on Jun 21, 2018 10:34:25 GMT
I was surprised to receive this marketing email:
Normally, I like BCs measured approach to communication, but this latest email reads like complete nonsense to me.
BC themselves often split a loan into a Tranche A (First charge) and Tranche B (Second charge) with 2 rates of interest. Do they do more work on the second bit of the loan to ensure safety??
With the BridgeCrowd, 2nd charge loans are as safe as 1st charge loans!
So if they are as safe, why do they offer a better return?
Put simply, 2nd charge loans are priced with a higher rate of return because we do more work on them to ensure their safety, and in return, we charge the borrower more. The increased rate of return for you as an investor is not proportional to the risk.
Years of legal background and experience in writing loans has allowed us to refine our process and contractual paperwork to ensure the safety of 2nd charge loans. Most of the investors that have been with us for 5+ years understand this. For those new to bridging, now you know, that 2nd charge loans offer an opportunity to get a higher rate return without the increased risk.
100%
of 2nd charge loans repaid in full
So if they are as safe, why do they offer a better return?
Put simply, 2nd charge loans are priced with a higher rate of return because we do more work on them to ensure their safety, and in return, we charge the borrower more. The increased rate of return for you as an investor is not proportional to the risk.
Years of legal background and experience in writing loans has allowed us to refine our process and contractual paperwork to ensure the safety of 2nd charge loans. Most of the investors that have been with us for 5+ years understand this. For those new to bridging, now you know, that 2nd charge loans offer an opportunity to get a higher rate return without the increased risk.
100%
of 2nd charge loans repaid in full
Normally, I like BCs measured approach to communication, but this latest email reads like complete nonsense to me.
BC themselves often split a loan into a Tranche A (First charge) and Tranche B (Second charge) with 2 rates of interest. Do they do more work on the second bit of the loan to ensure safety??
