Kuflink is planning to launch a new lending product targeting commercial buy-to-let opportunities, as the peer-to-peer property platform continues to expand its offering.
The platform is also mulling an entry into the consumer lending market later this year, in response to rising borrower demand. Meanwhile the platform is finessing its borrower experience by adding automation processes to make it quicker and easier to apply for financing.
“We are working on a number of different products going forward, one of which is a term loan product which will come out over the course of the next few months,” says Narinder Khattoare, chief executive of Kuflink.
“We’re looking at three- to five-year products, where the investment is locked in for three to five years. It’s more of a commercial buy-to-let type of offering on the platform with a very different type of borrower.”
This product will differ from Kulink’s bridging or development loans in several ways. The loan values will be lower, the borrower will be a commercial landlord, as opposed to a developer, and the target rates are likely to be lower than with Kuflink’s development loan products, representing the lower risk and potential for longer-term gains.
“We’ve actually done two or three of these loans in-house already,” says Khattoare. “We wanted to test it in-house with some of the loans from people we know that are coming towards maturity of bridging or development loans that we can refinance into a buy-to-let structure. We want to get the understanding right, get the processes right, and then we’ll slowly roll it out to market.
“The rates are going to be a lot lower than what we’re offering on the platform at the moment,” he adds.
“This is because you’re getting a certain amount of rent cover on the interest payments.”
As with all Kuflink products, these buy-to-let loans will be Innovative Finance ISA (IFISA) eligible, allowing investors to shield their earnings from taxation.
During the 2021/22 tax year, Khattoare says that Kuflink saw near-record IFISA inflows, with investors targeting returns of up to seven per cent per annum.
Read more: Kuflink adds IFISA loans to its lender app
“We’ve been probably on par with last year in terms of the IFISAs that have come our way, which is good,” says Khattoare.
“Our doors are very much open to new IFISA money, but we don’t really need to go out and make a big announcement about it because we’ve had flows of monies coming our way over the past 12 months.
“There are always opportunities on our platform for people to invest in individual deals and to diversify against a portfolio of deals as well.”
Read more: Kuflink hails organic growth as profits rise
To date, Kuflink’s investors have trusted the platform with more than £170m of their money. So far Kuflink has paid back more than £110m and no investor has ever lost any money on the platform. As Kuflink targets new borrowers and investors in the financial year ahead, it is set to pass a number of loanbook milestones while helping more borrowers access the funding that they need.