- wiseAlpha is the world’s first online marketplace for secured corporate loans allowing people to invest in established brand name UK companies from £100;
- Investors can earn attractive rates of interest from between 5-8%1 making it a compelling alternative to low yielding savings accounts, the stock market, Peer-to-Peer marketplaces and retail corporate bond funds.
wiseAlpha, a new online lending marketplace that enables investors to lend to larger British businesses than P2P lending currently allows, has just raised £594,000 from crowdfunding platform Crowdcube to democratize the £multi billion pound investment market for secured corporate loans. WiseAlpha will be using its funding to grow the number of people investing in secured corporate loans in the UK and Europe.
With potential annual returns in the range of 5-8%1, wiseAlpha believes its attractive rates of interest, combined with its focus on large, established companies will be key to its growth as it embarks on revolutionising the investment landscape by providing access to secured corporate loans to the retail investor.
Investors can choose from a selection of corporate loan based investments in blue-chip UK companies (often household names) to invest in. These are the same companies that the largest global financial institutions lend to but has, until now, been closed to the private investor. Current issuers on the wiseAlpha platform include United Biscuits, RAC, Virgin Media and Eddie Stobart.
wiseAlpha founder and CEO Rezaah Ahmad comments:
“We believe that lending to some of the largest and most established companies in Britain is an attractive proposition for the discerning investor looking at diversifying their portfolio and doing something more interesting with their savings. Our investors value the peace of mind that comes with lending to large and often long-established brand name companies versus lending via other marketplace lenders offering loan investments in small businesses or others offering more opaque and risky types of loans.”
“Unlike most fixed income bonds with low coupons and extended maturities, secured corporate loans should perform well in a rising interest rate environment.”
“We used crowdfunding to raise funds because we believe it is one of most important financial innovations in recent years and, as another fintech company shaking up the large global corporate lending markets, we want to build a community of investors who are interested in being part of our journey as we aim to democratize access to some of the best investment opportunities.”
About Secured Corporate Loans: an all-weather asset class
The corporate capital tripod comprises bonds, equities and secured corporate loans. Investors who use the stock market to invest in dividend or income stocks are exposed to volatility risk as share prices can fluctuate significantly with changes in the performance of the company or in times of stock market or economic turbulence.
By comparison, senior secured loan investments offer contractual income yields and typically lower price volatility making them an attractive asset class for risk averse and income driven investors. Moreover, senior secured corporate loans have the potential to offer better yields than investment grade bonds and are linked to LIBOR such that their coupons rise with interest rates. Research indicates that the senior secured asset class compares favourably on a risk-adjusted return basis versus alternative asset classes such as high yield bonds and equities.2
Senior secured loans have a first ranking charge over the assets of the company and a pledge over the company shares. Until now, investing in secured corporate loans was reserved for only the largest financial institutions and banks. Now retail investors can access individual investments through the wiseAlpha platform. The loans wiseAlpha lists on its platform are secured on the assets of the company and this collateral backing offers a degree of capital and structural protection for investors.
How wiseAlpha works
wiseAlpha is an online platform that enables members to gain exposure to senior secured corporate loans on a company by company basis.
There are no advisors, no funds and no complicated administration charges and conditions for people that register on the platform. It lists corporate loan based investments of blue chip British companies where the loans have already been issued by major international banks and the companies sometimes have annual revenues in excess of £1bn and have been around for many years. Members can invest in companies such as United Biscuits, RAC and Virgin Media.
Interest is received by investors on a quarterly or semi-annual basis with the principal paid at maturity or during the life of the investment. wiseAlpha collects the interest and distributes it to members and provides account management and reporting tools so members are able to manage their investments in an easy way. Investors can access their money by using wiseAlpha’s matched bargain based sale process which provides for the matching of buyers and sellers to enhance potential liquidity.
As part of wiseAlpha’s commitment to building a community of equity investors, equity investors who have invested £1,000 or more on Crowdcube will receive 0% Service Fees for life3. wiseAlpha charges an annual Service fee of 1% on total monies invested and a 0.25% Sale Fee for investments sold via the wiseAlpha matched bargain based sale process.
WiseAlpha Technologies Limited (FRN:657355) is an appointed representative of Kession Capital Limited (FRN:582160) which is authorised and regulated by the Financial Conduct Authority in the UK
WiseAlpha Technologies Limited is a limited company, registered in England and Wales (No. 08967521), with registered office at 14 Bonhill Street, London, EC2A 4BX, United Kingdom.