Smart. Safe. Secure.
- Up to 10.8% returns PA. Interest is paid monthly
- Zero capital losses and 100% recovery rate
- Over £140,000,000 successfully lent
- All underlying loans are SECURED over UK property
- Manually choose the loans or auto invest
- Active resale option
‘SoMo are in a league of their own. Their due diligence, calibre of loans and interest rates are considerably superior to the 17 other platforms I have used. SoMo are also the most reliable when it comes to paying lenders both their capital repayments and interest on time. Truly excellent customer service to boot.’
Investor and CEO of a UK company
Just a few reasons why people choose to invest money with SoMo.
How it works
SoMo allows investors to select which borrower to fund and security to take. All the underlying loans are secured over UK property by a mortgage or legal charge. This provides a significant level of comfort. In the event that the borrower fails to repay the loan, then the loan can be recovered by repossessing and selling the security.
Secured over UK property
SoMo takes a 1st or 2nd charge mortgage or restriction over the security. All of the security properties are valued by an independent RICS approved chartered surveyors. The surveyors hold insurance policies that cover or indemnify them against negligent valuations*. Our maximum loan to value is 75%.
*See our Risks page for more information
10.8% annual returns
The average earned by investors as of January 2020 is 0.9% per month (10.8% pa). Interest is paid monthly and follows the performance of the loan with the borrower.
Whilst the underlying loans are secured over property, your loan capital is at risk and past performance is not necessarily a reliable indicator of future performance.
The SoMo team has underwritten over £140,000,000 since inception in 2014. The company formed from a 2nd generation family of bridging lenders and now boasts experts from property, finance and legal backgrounds. The team has a combined 100+ years of lending experience.
Zero capital losses
The team have been lending since 2014 and have a 100% recovery rate on all loans to date. Past performance is not necessarily an indicator of future performance. Capital is at Risk. Capital losses are only categorised when all reasonable avenues of recovery have been exhausted.
What are the risks?
Even though SoMo’s underlying loans are secured over property and this security is held in a ring-fenced trust for you, your capital is at risk and you could lose some or all of your money. Past performance is not necessarily an indicator of future performance. If you are unaware of the Risks involved in lending please read our Risk Warnings and seek financial advice if you are unsure about the risks. Your loans are not covered by the Financial Services Compensation Scheme.
As of Jan 2020
The following are the results of Social Money Ltd (SoMo) trading since inception and as BridgeCrowd. Your Capital is at risk. Future returns may not follow past returns.
We put our money where our mouth is
We put our money into every deal and treat your money like it’s our own, subject to availability of funds.
Why are proud of what we do
Interest Rate P/M
Interest Rate P/M
Some of our most frequently asked Lender questions.
What is our aim?
SoMo is a growing group of like-minded people and businesses whose aim is to improve their finances through borrowing and lending.
What is your background?
SoMo is a 2nd generation family of bridging lenders. The team now boasts a combined experience of over 50 years in property lending. Our backgrounds range from accountancy, finance, insolvency practitioners, the legal profession (barristers and solicitors) and loan underwriting. Our experience in bridging has taught us what deals to enter into and what deals to turn down. Importantly we know the loan to value criteria for different styles of properties as well as when to allow a loan extension and when to repossess. We have developed extensive due diligence processes and procedures as well as excellent fraud prevention systems. Notably, we have processed thousands of loans and millions of pounds, and have never lost any capital. Meet the team
What is a bridging loan?
A bridging loan is typically used to cover shortfalls in funding or finances and it is “secured” against a property. Basically, like a short-term mortgage.
Who is a typical borrower? What do we lend against?
The type of borrowers that apply vary and range from property developers looking to renovate, refurbish, develop or buy new properties to business owners looking to improve their business. The one commonality in all of our loans is that the borrowers own a property that we feel comfortable to hold as security until our loan is repaid.
We lend against UK property and land. The majority of our deals are over UK residential properties. We will consider securing over the semi-commercial and commercial securities if the loan to value fits our criteria. Our maximum loan to value is 75% (80% in special circumstances).
We take a 1st or 2nd mortgage or secured loan over UK property. All of the properties are valued by a RICS approved surveyor who have insurance policies that provide an indemnity for a negligent or mis-valuation. Our maximum loan to value is 75%. You choose the deals to fund. The mortgage security is held on trust for you until you are repaid from the sale or refinance of the property. We do not make regulated loans.
How do we make money?
SoMo makes its revenue from the spread in the interest rate that is charged to borrowers and the rate that it pays to you. For example, a borrower may pay interest at 1% per month, of which you may receive 0.9% per month and SoMo receives 0.1% per month.
Do you have a Secondary or Re-Sale Option?
Yes, and at present, it is quite active. Please note that whilst the Secondary Sales Option is at present very active, with average re-sales taking under 24 hours, your ability to sell your loan is subject to SoMo being in a position to buy back the loan with company capital or with other lenders willingness to fund it. Please be aware that in economic uncertain times and or falls in the property market then you may not be able to re-sell your loan. You should not rely on the Secondary Market to recover your loan capital. Loans that are over term or within one month of the loan maturation date cannot be sold back to us. We may at our complete discretion waive, change, or cancel a secondary sale.
Underwriting, fraud, valuations...
Risk, underwriting and fraud
The team members have been lending and processing bridging loans for over 2 generations of family lenders. We have a combined experience of over 50 years in property lending. Our backgrounds range from accountancy, finance, insolvency practitioners, the legal profession (barristers and solicitors) and loan underwriting. Our experience in bridging has taught us what deals to enter into and what deals to turn down. Importantly we know the loan to value criteria for different styles of properties as well as when to allow a loan extension and when to repossess. We have developed extensive due diligence processes and procedures as well as excellent fraud prevention systems. Notably, we have processed thousands of loans and millions of pounds, and have never lost any capital. Meet the team
Valuations and Loan To Value
We always obtain an independent property valuation from one of our panelled or approved Royal Institute Of Chartered Surveyors (RICS) that have passed our due diligence and compliance procedures. We check their experience and the level of their indemnity cover to insure against any negligence or undervalued properties. The valuer will physically visit and inspect the property and provide us with a comprehensive report and photos of the property that we are lending against. This will include details on the local market and evidence of comparable recent sales for the property as well as any other specific requirements that are of importance.
The surveyors also provide an indemnity insurance policy against a negligent valuation. This provides a secondary layer of comfort. Should the valuation be negligent and should we suffer loss as result of their negligent valuation, then we will pursue the surveyor’s insurance indemnity policy for any economic loss after it has been mitigated. Please note that all claims made against a Surveyor's policy are subject to the usual rigour that an insurance company would make, and they may seek to deny our claim or allege some other form of contributory negligence. In over 50+ years of lending we have only had to make two claims - both of which were successful.
Our solicitors process over £1 billion of loans and repayments each month for some of the UK’s largest bridging lenders. Suffice to say, they are collectively regarded as one of the specialist legal teams in the industry for both due diligence and recovery. Our solicitors undertake additional due diligence on every borrower as well as the property security, title deeds, local searches and borrowers solicitor. Our solicitors draft the loan agreements that have been refined using years of experience as well as registering the legal charge over the security (unless the clients solicitor is registering the charge).
Borrowers due diligence
We perform extensive due diligence on the borrowers solicitor, ensuring that they have appropriate indemnity cover and at least three Solicitors Regulation Authority (SRA) approved partners. Every borrower is required to have independent legal advice. Their solicitor must speak to the borrower and explain the loan agreement and the consequences of not repaying the loan. This is done so that the borrower can not state they were unaware of what they were entering into and unsure of the potential consequences if they do not repay the loan. The solicitor also witnesses their signature of the loan and mortgage to ensure that the right borrower signs the contracts.
Spread your risk
You have access to multiple loans and as such, you can spread your risk over multiple deals with varying repayment deadlines and interest rates.
What return can I expect and how long are the loans?
The rate of return offered by the platform depends on the loan to value (LTV), the type of the security, the loan term and the exit plan. The following is an indicative guide of the return to investors. You choose the deals and the rate of return. Your capital is at risk.
50% - 70%
|1st charge loans||0.6% per month||0.8% per month|
|2nd charge loans||0.8% per month||1% per month|
What is the risk?
Please click here to view our Risks
Are there any fees?
No, we do not charge lenders any fees for membership or for repaying funds.
What happens if the Borrower defaults under his loan?
The default process varies on each individual loan that we make. Sometimes we may extend the loan and on other occasions we may appoint receivers to repossess the property and sell it in a timely manner. We always build into our loans the ability for the borrower to extend the term by a further reasonable period. This is especially important in cases where the borrower is selling the property and it is on the market or the borrower is arranging a refinance and we feel that the borrower is likely to achieve this goal within a reasonable time frame. Should the property be on the market for some time and it has not had any firm offers we may ask the borrower to reduce the asking price. Where the borrower refuses to cooperate, we would then consider appointing receivers. The decision of how to manage the loan and whether to allow an extension or appoint receivers rests with SoMo. We may ask affected investors for their views, but the final decision always rests with us.
What happens if we were to stop trading or become insolvent?
SoMo holds the securities and mortgage over the loans to all borrowers in a trust directly on behalf of you. Should SoMo stop trading or become insolvent, then these security interests are ring fenced from SoMo insolvency. The liquidator or administrator would be obliged to recognise the trust arrangements and use the property in trust to return capital and interest to the relevant Lenders pro rata to your loan (and not apply these assets towards SoMo’s creditors generally).
Are you regulated by the FCA? Are my funds protected under the FSCS?
SoMo is a trading name of Social Money Limited, a company which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number: 675283) for credit broking, debt adjusting, debt administration, debt-collecting and debt-counselling activities and consumer buy to let loans. Social Money Ltd makes regulated and unregulated loans. However, SoMo makes unregulated bridging loans and as a lender/funder, the loans that you make are not regulated by the FCA. Your loans are not covered by the Financial Services Compensation Scheme and you may or may not be able to refer any complaints to the financial ombudsman.
How does the referrals scheme work?
The referrals and cash-back scheme is where you are referred from one of our partner companies or where you refer friends, clients or colleagues. You will receive a £250 cash-back reward for every referral made. The referral cash back can only be given when the referred investor has invested £5,000 or more into a new loan within 45 days of signing up. This offer is not valid for secondary sales, members of your immediate family or for people living in the same household.
Interest Is Paid Monthly
The performance of your loan and interest follows the direct performance of the underlying loan with the borrower. Interest is paid monthly. In the event that the borrower does not repay the loan at the repayment date or in the event that the borrower does not pay the interest, then interest will continue to accrue and be repaid on a successful full redemption.