Frequently Asked Questions
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We’ve prepared detailed FAQs to answer most of your questions.
Why does Property Lending make sense?
Property Investment is a long-established method for wealth generation and preservation, favoured by Institutional and Private Wealth Clients alike. In addition to the attractive returns available, property offers tangible security to investors that few other asset classes can match, protecting against downside risk. That said, it does have its own limitations and risks.
Investing in property directly, often requires investors to commit a large sum of money to a single property. These investments are usually long-term, meaning the liquidity of your investment is low. In the event of a downside event, the realisation of value is dependent solely upon the market value of the property, with no equity buffer to offset any valuation drops.
Recognising the strengths and weaknesses of this Asset Class, at Initiative Ireland we believe there is a better way to empower people to access the security of property investing while also overcoming most of these limitations, through Secured Property Lending.
With a Private Lending Account from Initiative Ireland you can provide finance to experienced developers, to fund the acquisition and development of properties across Ireland. All our loans are secured with a first charge over the financed property, providing tangible security to our lenders. Our clients can lend as little as €1,000 per project, to achieve valuable portfolio diversification. With loan terms ranging from 3 to 24 months, our loan terms are defined for ease of financial planning.
Most importantly, we provide a maximum of 75% of the finance needed to the developer per project. The developer must source or cover the remaining 25% of funding needed. In the event of sale of the property, our lenders are repaid before the developer from the sale proceeds. This means their equity provides a minimum 25% buffer to our lenders, to further protect against downside risks.
Why lend with Initiative Ireland?
Initiative Ireland is a technology enabled property finance platform. Led by an experienced team, we originate, syndicate and professionally manage secured property loans on behalf of our members, as a peer-to-peer lender. This means that the loans we provide are funded by a group or 'syndicate', made up of corporate and private clients.
We manage each loan from end-to-end as the Loan Agent, meaning our borrowers have a single point of contact and our lenders can trust us to manage each loan professionally and objectively on their behalf, with full authority to do so.
At Initiative Ireland we believe our Syndicated Property Finance solution is a sustainable solution for borrowers and lenders alike, offering significant capital security to lenders while also helping to address the urgent need for new family homes across Ireland. We are working to set a new standard for financial services in Ireland which is to be Honest, Fair and Inclusive.
How do we Manage Loans?
At Initiative Ireland we finance institutional quality loans only. We operate to strict lending criteria. All loans listing via our platform are subject to approval by our internal credit commitee, which evaluates the borrower, project and property in details. Each loan is also assessed and approved by our institutional partners, who committ to co-funding the loan alongside our other clients. This means that when you lend via Initiative Ireland, you are funding loans which meet these institutional standards.
Once a loan is approved, we appoint an internal relationship manager to oversee the loan from end-to-end, liaising with the developer. We also appoint independent legal council, quantity surveyors and valuers to aid in final due diligence and ongoing monitoring of the loan. Unlike some lenders, we don't provide all the finance up front. Instead, we phase the release of funds out to the borrower, in line with the funding requirements for the project. We perform ongoing site visits and commission independent valuations of site and works at key stages of the project, before providing each phase of finance. This helps to ensure that the value of the security increases in line with the release of cash to the borrower.
When our clients finance a project, we take a first legal charge over the property, which is held by Initiative Ireland Nominees as security agent. This charge ensures that our lenders rank first in order of repayment when the property is sold. We also take a share charge over the development company, meaning we can assume control of the company if needed. We may also take additional security, to the benefit of our lenders. Initiative Ireland Nominees is authorised by the Department of Justice & Equality as a Trust & Company Service Provider.
We manage all payments between borrowers and lenders, through our Private Lending Accounts and Borrower Accounts. We provide this service in partnership with MangoPay, our Regulated Payments Partner. At the end of the loan, upon sale of the properties, our lenders are repaid first into their accounts.Once our lenders have been repaid in full, we also deduct our Exit-Fee from the borrower. Although it is not the norm, we take our success fee last, to demonstrate to our lenders that we are committed to carefully managing each loan from end-to-end.
Honest, Fair & Inclusive
We operate to a strict ethical code within Initiative Ireland. We are committed to doing all we can to protect our lenders. That includes ensuring they properly understand those downside risks whish we are working to prevent. For further information on those risks, please see our Risk Warnings
What Regulations Apply?
Authorised Trust & Company Service Partner
Initiative Ireland manages all loans from end-to-end, as the Loan Agent acting on behalf of our private lending syndicate. A first legal charge over the property is also taken and held on behalf of our clients, by our partnering security trustee company, Initiative Ireland Nominees Limited. Initiative Ireland Nominees Limited is authorised by the Department of Justice and Equality as a trust and company services provider.
Regulated Payment Partner
Initiative Ireland is a partner of MANGOPAY, a public limited liability company incorporated in Luxembourg (Number B173459) and approved as an electronic money institution by the Financial Sector Regulator (CSSF), Luxembourg. Mangopay manage the transmission of funds across the platform, in compliance with European Regulation, on behalf of Initiative Ireland and our clients.
Registered Data Controller
Initiative Ireland is a Data Controller registered with the Data Protection Commissioner of Ireland, registration number 16237/A.
Initiative Ireland provides finance to business borrowers exclusively and as such does not require prior regulatory approval. Furthermore Peer to Peer lending is not yet subject to regulation in Ireland. Despite this, Initiative Ireland has partnered with regulated and professional entities and is therefore required to adhere to many of the same standards and codes of conduct. Furthermore, on a voluntary basis, we have a strict internal policy framework which is designed to provide additional protections to our borrowers and lenders alike, in line with best practise across the finance industry.
How are Payments Managed?
Initiative Ireland is a partner of MANGOPAY, a public limited liability company incorporated in Luxembourg (Number B173459) and approved as an electronic money institution by the Financial Sector Regulator (CSSF), Luxembourg. MANGOPAY is a subsidiary of Credit Mutuel Arkea, which holds a Aa3 rating from Moody's (as of March 2018).
When you open an account with Initiative Ireland, it includes an e-wallet, provided by MangoPay, to manage all payments in and out of the platform. This account is managed on your behalf as per our Terms of Business, which you will be asked to sign as part of your registration process.
Can I introduce a client?
Yes. Initiative Ireland is built on the principle of trusted partnerships.
We are committed to working with financial advisors and brokers who share our committment to providing transparent, inclusive and secure solutions to their clients.
If you would like to introduce a client or would like further information on our offering, please contact us on +353 (0)1 6859259
Who can become a Lender?
Residents of the Republic of Ireland are eligible to apply to use the Service as a Private Lender.You must be at least 18 years old with a Current Account at a duly authorised European Financial Institution acceptable to Initiative Ireland.
Customers applying from outside the Republic of Ireland may be approved subject to case by case review. For more information, please contact team@InitiativeIreland.com
A minimum of €1,000 per loan is required from Private Lending Members.
Institutional Lenders must be registered companies. Lenders based outside of the Republic of Ireland will be subject to review on a case by case basis. Some service limitations may apply to Institutional Lenders based on regulatory territory and company structure.
A minimum of €10,000 per loan is required from Private Institutional Lending Members.
How do I Start Lending?
Step 1: Apply for Membership
You can register online Here
Step 2: Activate your Account
Once your application is processed, simply complete our Accreditation Process to have your account activated.
Step 3: Start Lending
Once you’ve activated your account you can start viewing available loans, choosing which loans to finance, committing as little as €1,000 per loan.
How much does a Private Lending Account cost?
Opening a Private Lending Account is free at Initiative Ireland.
We charge our fees to the borrower. We don't deduct fees from your account or earnings.
Some additional miscellaneous fees may be incurred via your account by our Regulated Payments Partner in the future but these fees shall be notified to you in advance and relate to the processing of payment i.e. in the event that a payment is returned unpaid.
For full details, please see our Terms of Service.
Are my earnings subject to Tax?
Yes. The income you generate from your loans is subject to Irish Income Tax.
Withholding Tax may be applied to Irish Residents and applicable parties and deducted at source as required by Irish Revenue (20% at present).
Clients will be provided with an annual income statement and certificate of any taxes deducted, to facilitate their own tax return.
Please Note: Tax Rates and classification may be subject to change in the future.
Can I lend to more than 1 Tier of Debt?
Yes. You can choose to spread your funds across both different loans and different Tiers if you like (subject to availability).
A minimum of €1,000 is required per loan listing.
When do I start earning interest on my Loans?
Once a loan term commences, Interest is accrued daily against the value of funds you have committed to the given loan.
Interest is due to be repaid at the end of the loan along with your principal funds, subject to the terms of the loan.
Do I need to sign a contract?
Yes. As a Private Member you must sign-up to our Terms of Service. Thereafter each loan you finance will be governed in line with these terms of service
What is a 'Secured Loan'
We only finance property-backed loans. This means if the borrower fails to repay the loan in full, we have the contractual right to appoint a receiver to take possession of the property which has been financed and sell it to recover funds owing to the lending syndicate. This right is known as a Legal Charge. The property acts as 'Security' for the loan, making it a Secured Loan. This is very different to an Unsecured Loan where a business simply committs to repaying the loan without providing any assets as collateral. Typically banks charge significantly more when they offer Unsecured Loans vs. Secured Loan because the risk of financial loss is significantly reduced on Secured Loans.
At Initiative Ireland we only approve loans which are secured with a First Legal Charge, which means in the event of such a sale of the property our lenders must be repaid first, before any other creditors from the sale proceeds. While some alternative lenders may accept a second legal charge or provide finance without security, at Initiative Ireland we insist on a first legal charge as a minimum on all loans.
The first legal charge is registered to Initiative Ireland Nominees Limited on behalf of the Lending Syndicate. Initiative Ireland Nominees Limited is authorised by the Department of Justice and Equality as a trust and company services provider.
The level of security and exposure will vary per loan based on the value of the property and the loan amount. This is detailed in each loan listing and influences the interest rate which is offered to lenders. Please make sure you understand your exposure based on which loan and Tier you wish to fund before committing your funds.
Can I get my money back early?
When you subscribe to a loan a 15 day cooling off period shall apply. You may cancel your subscription within this period.
After this period has finished however your funds are committed for the duration of the loan. As such, lenders should consider liquidity risk before committing their funds.
In the event of a life event, whereby the lender requires the funds urgently, we may be able to facilitate an early repayment however in this event the lender may have to waive any interest accrued on that loan.
Limitations will also apply, for further information, please see your Terms of Business.
Is the interest rate fixed?
Yes. We charge a fixed interest rate to the borrower on behalf of the syndicate.
However, we do not guarantee repayment of interest in the event of a full or partial default. In the event of a loss your principle and interest may be at risk, depending on the value of the security at that time.
What is Tier 1 Debt, Tier 2 Debt and Uni-Debt?
With Uni-Debt all lender debt is repaid in the same order of priority, pro-rated based on how much they invested. In some cases, instead of listing a loan as Uni-Debt we may decide to split the debt into two levels of seniority, to give more options to lenders. We call these levels Tiers:
Tier 1 debt is Senior Debt, this means that in the event of a default Tier 1 debt is repaid first before any Tier 2 Debt. Tier 2 Debt is then repaid next.
If there is enough left from the proceeds of the loan, Tier 1 then gets their interest repaid. Tier 2 interest is then repaid last.
- Tier 2 debt is considered higher risk and therefore accrues a higher rate of interest.
- Tier 1 debt is considered lower risk and therefore accrues a lower rate of interest.
- Uni-Debt is deemed low to moderate risk and therefore accrues interest usually around the middle.
Who can apply for a Loan?
At present our loans are only available to Property Development Companies, led by an Experienced Team.
We do not lend to Private Individuals.
What type of developments do you fund?
Initiative Ireland provides syndicated property finance primarily for residential developments in high demand areas, with loans ranging from €500k to €10m.
On a limited basis mixed purpose or commercial developments may also be considered, where a compelling exit strategy is in place.
What type of finance is available?
Property Development Finance
- All our loans are secured with a 1st Lien on the Real Estate.
- Up to 80% LTC (per facility)
- and Up to 75% LTV
- Term 6 – 24 Months
Short-Term / Bridging Finance
- Competitive Terms available on request
How long are your Loan Terms?
We provide flexible loan terms between 6 months to 24 months
How are Loans Secured?
We require a 1st Legal Charge over the property, which is held in trust for our lenders by Initiative Ireland Nominess Limited.
Initiative Ireland Nominees Limited will enter into a single set of security documents which will include a Charge Document and other security documents. Borrowers should read these documents carefully and where necessary, take independent professional advice.
How long does it take to fund a Loan?
From signing of Terms, we aim to close within 4 to 5 weeks.
Once a loan proposal is approved for listing by our Internal Credit Committee, we provide a term sheet to the borrower. At this stage, the project benefits from a Loan Reserve Facility provided to the Borrower by our Primary Credit Partners. This means, subject to final due dilligence and signing of Loan Facility Agreement, the loan is effectively guaranteed funding.
We then list the facility, while final legal due dillignece progresses, affording our syndicate members time to subscribe to the loan, ahead of signing of the Loan Facility Agreement.
In the event that the loan is only partially funded by our private lending members, the remaining share of the loan (if any) is then funded by our Primary Credit Partner, as per the Loan Reserve Facility.
Can I cancel my application or repay my loan early?
Yes, but fees may apply.
You will pay a due diligence fee on signing of the Term Sheet to cover our initial legal, QS valuation and due diligence expenses. This fee will be refundable up until you instruct us to engage our solicitor at which point this fee will no longer be refundable.
If you exit your facility early you may be subject to early repayment fees as outlined in your Loan Agreement together with any outstanding payments and fees.