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Kuflink Analysis

Real Estate Debt
Real Estate Crowdfunding

Last updated in December 2023.

What is Kuflink?

Kuflink began in 2011 as Alpha Bridging Solutions, focusing on issuing bridge loans. In 2017, they officially launched the Kuflink peer-to-peer lending platform in England and Wales, offering short-term loans backed by UK property. Kuflink holds a consumer credit license from the UK's Financial Conduct Authority (FCA). Since its inception, the platform has attracted over £290 million in funding, and £60 million in the past year, maintaining an average monthly volume of over £5 million.[1]

Key Takeaways

  • Kuflink offers investors secured UK property loans starting at £1,000 at a current interest rate of up to 9.83%.
  • Loan durations vary from 3 months to 3 years, with monthly payments or option to choose compounded interest.
  • Kuflink co-invests up to 5% in every deal alongside lenders.
  • While 9.2% of total loans at Kuflink face repayment delays, the platform asserts that no investor losses have occurred since its launch.

How Kuflink Works

Kuflink provides secured loans backed by UK property. Investors can choose between live and reserve deals. Reserve deals are upcoming loans that have yet to be completed or distributed to borrowers. Investors earn cashback on reserve deals when they go live, equal to the interest accrued from initial funding to the deal's activation.

These deals are categorized into four products: Select-Invest, Auto-Invest, Select IF-ISA, and Auto IF-ISA, each requiring a minimum investment of £1,000. Select-Invest and Select IF-ISA allow investors to allocate funds to any secured loan of their choice. Auto-Invest and Auto IF-ISA offer an automatic investment feature, diversifying the selection of loans.[2]

Select IF-ISA and Auto IF-ISA products benefit from the Finance ISA for tax-free returns. Investors can invest up to £20,000 annually or transfer funds from existing ISAs. Kuflink also allows SIPP account holders to earn tax-free returns by investing pension funds in SIPP-eligible loans secured on UK property, in partnership with Morgan Lloyd, a regulated SIPP provider.[3]

Loan durations range from 3 months to 3 years. Investors can choose to receive payments monthly or opt for compounded interest rates for investments with terms of more than one year. At the end of the investment term, compounded interest and capital are paid to investors' wallets.[4]

While the platform does not have a provision fund or allocate funds for default risk, it secures loans against UK property using 1st and 2nd legal charges. Kuflink co-invests up to 5% in every deal alongside lenders and there is a secondary market for selling loans to other investors available.[5] The platform also has a mobile app, which can be found on the Apple App Store and Google Play.

Kuflink Returns & Fees

Kuflink offers an interest rate of up to 9.83%. Since its launch, the platform has originated 688 loans, and repaid a total of £197,432,184. They currently distribute on average a monthly interest rate of 1.0% to investors on their active loan book.[6]

9.2% of the total loans experience repayment delays. The default rate has risen significantly in 2023, reaching 8.77%, compared to the rates of 0.81%, 1.26%, and 0% in 2020, 2021, and 2022, respectively. Kuflink does not disclose the actual net return for investors but states that to date, no investor has had any losses as a result of defaults.[7]

Withdrawal of non-invested funds may incur a charge of £5 or 1% to lenders. Charges are also applied if investors choose to liquidate an investment before the loan expires, with a minimum fee of 2% of the amount or £500, whichever is higher. The platform also collects a 0.25% fee on the loan part value for secondary market transactions. Kuflink generally generates revenue by imposing expenses and fees on borrowers, which are deducted from the monthly payments made by borrowers as outlined in the Key Contract Terms.[8]

Kuflink Management

Kuflink was founded by the Binning Family in Kent, UK. The founders, Harwinder Singh and Rawinder Binning, now serve as Kuflink's Chief Compliance Officers. With extensive experience in property development, they have worked on various projects in the UK, ranging from residential to commercial developments. Originally established as Alpha Bridging Solutions Ltd in 2011, the company expanded its services to include Kuflink's peer-to-peer lending platform in 2017.

Narinder Khattoare has been the Chief Executive Officer of the company since July 2013. His previous experience includes roles at Prudential, Towergate, and Borro, where he served as the head of business development. The management team also includes Paul Auger, the Chief Operating Officer, who brings over 35 years of experience in all areas of lending, and Gary Prince, the Chief Financial Officer and ex-TSB Bank of 7 years.

The Kuflink investment platform operates as Kuflink Ltd and is part of the Kuflink Group PLC, headquartered in London, UK. The parent company also oversees Kuflink Bridging Ltd, the authorized entity for credit broking, debt administration, and collection.

Special Considerations

Kuflink's latest annual report, audited by MHA Macintyre Hudson, indicates profitability since FY2020. The platform reported a net profit after tax of £323,525 in 2021 and £652,607 in 2022, corresponding to a 101.71% year-on-year revenue growth.[9]

In July 2023, Kuflink secured a £35 million debt facility from Paragon Bank through European Risk Capital. This three-year commitment, subject to potential increases and renewed annually, is designed to provide accessible capital for the platform's growth. The agreement underscores Kuflink's strong loan portfolio and underwriting criteria. Notably, Kuflink has not encountered any investor losses since its launch. The platform aims to expand its loan book to £500 million.[10]

Kuflink has received recognition through various awards, including Moneyfacts Consumer Peer-to-peer Provider of the Year 2019, Best Alternative Business Funding Provider 2018-2019 by Business Moneyfacts, and Business Production Innovation of the Year 2017. Additionally, Kuflink has earned accolades from the SFI Awards, PWA - Property Wire Award, and the B&C Award as the P2P Lender of the Year 2019.

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