
LendCart takes a location agnostic approach to Second Charge Loan opportunities across the UK, evaluating projects on a case by case basis. The initial focus will be on smaller second charge loans ranging from £300,000 to £1,000,000, targeting developments in liquid markets with experienced developers and contractors. Each opportunity will be assessed based on multiple viable exit strategies, ensuring a robust risk mitigation framework and strong downside protection.
Second Charge Loans offer double digit annual returns, significantly outperforming traditional fixed income investments.
Strong downside protection through robust security measures, including charges on the asset, personal guarantees, and additional collateral where applicable.
Given the position in the capital stack, securing investor funds is of paramount importance to LendCart. The firm will employ a multi layered approach to safeguard its investments and reduce exposure to risk. In addition to seeking a second charge on the asset, LendCart will implement several additional security measures:
These agreements will clearly outline the priority of repayment between senior and junior lenders in the event of default or liquidation. By formalizing the rights of each party, LendCart ensures that there are no ambiguities regarding the treatment of debt in distressed situations.
LendCart may seek to place first or second charges on additional assets such as land, property, or corporate holdings. This provides a secondary layer of security, increasing the likelihood of full repayment even if the primary asset faces challenges.
LendCart reserves the right to step in and act as a ‘debt collector’ in cases where the borrower is failing to meet obligations. In the event of financial underperformance, LendCart will take over management of the project for up to 6 months to protect both senior and junior lender positions. This approach helps mitigate risks associated with project delays, cost overruns, and lack of liquidity.
Developers will be required to provide personal guarantees amounting to at least 50% of the loan value. This ensures that the developer’s personal assets are tied to the performance of the project, incentivizing them to maintain financial discipline and align their interests with those of investors. Personal guarantees are an additional safeguard in the case of default or project underperformance.
LendCart will establish equitable charges over the project and/or asset, ensuring the company holds legal entitlement to the property in the event of default. Additionally, charges on the shares of the SPV (Special Purpose Vehicle) will provide further security, securing ownership rights and control over the project’s operations
These structured security measures are designed to provide the highest level of protection for investors. Coupled with LendCart’s robust due diligence process—these structures allow LendCart to closely monitor and actively manage projects, ensuring consistent and
The Second Charge Loan is poised for substantial growth in the current economic climate, driven by increasing demand for flexible financing solutions. While the market offers attractive opportunities, it is not without risks. To mitigate these risks, LendCart will leverage its teams’ extensive experience in residential development and understanding of the development process. This industry knowledge will be pivotal in identifying potential challenges early, allowing for swift interventions and solutions.
LendCart’s technology driven approach will further differentiate it in the marketplace. By using data analytics and real time project monitoring tools, LendCart will enhance its ability to track the performance of its investments, proactively managing risks and identifying value creation opportunities. This strategy will not only address existing market gaps but will also improve efficiency and transparency in managing investments.
LendCart’s goal is to provide substantial, inflation beating returns to investors by taking an active role in the projects it funds. Through a combination of stringent due diligence, active management, and robust security structures, LendCart aims with its platform to offer both high returns and a strong sense of security for its investors.
LendCart’s approach to second charge loan is built on the foundation of long term sustainability and value preservation, ensuring that every investment is not only profitable but also well protected against market uncertainties.