Ablrate is a fintech company that operates in the United Kingdom. The company allows individual investors to invest in asset-backed loans. The company was originally started to offer financing in the aircraft leasing industry. As it grew, it branched out to offer additional asset-backed loans.
In this review, we will look at how to invest in Ablrate and whether it is a good investment platform.
Quick Review of Ablrate
- Ablrate was started in 2014 by David Bradley Ward.
- ABL, in the word Ablrate stands for Assets Backed Loans.
- Ablrate has an average annual return of between 10-15%.
- Ablrate has a loan default rate of about 0.5%.
- Ablrate has not raised any money from venture capital firms.
- 1 What is an Asset-Backed Loan?
- 2 How Ablrate Works
- 3 How to Invest in Ablrate
- 4 Single Company Loan vs Diversified Portfolio Loan
- 5 What is the Ablrate Secondary Market?
- 6 Is Ablrate Safe?
- 7 What is the Ablrate Assests Under Management (AUM)
- 8 How to Contact Ablrate
- 9 Ablrate Peers / Alternatives
- 10 Summary
What is an Asset-Backed Loan?
There are two main types of loans. There are unsecured and secured loans. Unsecured loans are those that are largely based on trust. Lenders such as banks and peer-to-peer lenders look at a borrower’s track record and give them a loan. They do this based on the borrower’s credit score. A credit score is a three-digit number that is given out by credit bureaus like TransUnion and Equifax.
An asset-backed loan is also known as a secured loan. This is a loan that has a collateral. The idea is that the lender will liquidate the collateral and take the money. Secured loans tend to have a higher borrowing limit. They also have a longer repayment duration.
How Ablrate Works
Ablrate is a peer-to-peer lending company that offers secured or collateralized loans to businesses. This is unlike other popular P2P companies that offer unsecured loans. As mentioned above, the company was started with the goal of offering loans tied to the aviation industry. As the company grew, it started to expand the number of assets that it backs.
The company works in a very simple way. It starts with borrowers who approach the company for financing. The company’s credit team conducts an extensive review of the borrower. The company then uses funds that are invested by borrowers to the borrower. The money then earns interest when the borrower starts to pay back the money.
To a large extent, this is the same way banks earn money. They receive customer deposits and then lend them to borrowers. The bank then earn interest from the money that is borrowed.
How to Invest in Ablrate
The process of investing in Ablrate is very easy. The first step is to sign up in the website. You can sign up here. In this page, you will need to select whether you are an individual or corporate lender. The sign up page is shown below.
After registering, you will need to submit your key documents like the passport or your identity card. You also need to submit your proof of residence documents. This is a requirement because the company is regulated by the Financial Conduct Authority. This whole process takes about five minutes.
After this, you will need to deposit money to your account. You will deposit your funds to the Innovative Finance Individual Savings Account (IFISA). After this, you can find loans to invest in. There are primarily two types of loans that are offered by Ablrate. There is the single company portfolio loans that offer an annual return of between 8% and 13%. This is a loan that is offered to a single company that is borrowing money for a project. The other loan type is the diversified portfolio loan that offers an annual interest of between 7% to 10%.
Single Company Loan vs Diversified Portfolio Loan
As mentioned, these are the two types of loans that are offered by Ablrate. The single company loan is offered to one company that has a single project. For example, an aviation company may want to update its fleet. While this type of loans offer a better interest rate, it is usually riskier than the diversified portfolio loan.
The diversified portfolio loan is a loan that is offered to multiple companies. The credit team regularly reviews loans from multiple originators and allocates money to it. This type of loan usually has lower interest rates but it is usually safer than the single company loan.
What is the Ablrate Secondary Market?
A common feature of peer to peer loans is that they are usually highly illiquid. This means that it is usually very difficult to exit a loan that you are in. A secondary market allows investors to exit their loans by selling them to other investors. To do this, you need to visit your loan dashboard and select the loan you want to exit and then click Trade. The benefit of this secondary market is that it is a great way to exit a trade. You can learn how to participate in the Ablrate secondary market in the video below.
Is Ablrate Safe?
Part of the reason you are reading about this review is that you want to know whether Ablrate is a safe investment option. You also want to know whether Abrate is a scam or not. The truth is that Ablrate is a safe platform you can invest in. The company is regulated by the Financial Conduct Authority. Its ISA products are also regulated by the Financial Compensation Scheme. It is also registered at the Office of Information Commissioner.
Still, all these does not remove the risky nature of the industry. Investing in peer-to-peer loans is usually a high-risk plan because some companies or borrowers tend to default. You can protect yourself by investing a small portion of your funds.
The company sponsors a number of events, including a golf tournament in the UK.
What is the Ablrate Assests Under Management (AUM)
Over the years, Ablrate has raised more than £52.8 million from investors. There are more than £44 million that are traded in the company’s secondary market. Investors have made more than £8 million from the company.
How to Contact Ablrate
You can contact Ablrate by going directly to its website. You can also visit its social media platforms at:
Ablrate Peers / Alternatives
There are other popular peer-to-peer companies you can invest in. These are:
Ablrate is one of the fastest-growing peer-to-peer lending companies in the United Kingdom. Anyone in the UK, who is over 18 years can invest in Ablrate. However, we recommend that you diversify across the peer-to-peer peers mentioned above. You should also diversify across other assets such bonds, mutual funds, Bitcoin and index funds.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.