With £1.6m equity investment already secured, the company is confident that the crowd will support the campaign as the Relendex team has built the platform and put the infrastructure in place for a fraction of costs compared to many other P2P platforms that have spent tens of millions.
“Our business is in the right place at the right time, banks aren’t efficient and they don’t have as much money to spend as they did before the crash,” said co-founder and CEO Michael Lynn. “Our crowdfunding platform, for commercial property lending, is a way of by-passing the banks.”
Relendex connects (online and in real time) each borrower with many lenders who each provide parts of a loan. Investors get better interest on their savings as lenders and borrowers get their loans faster at competitive rates.
The team of founders is aiming for Relendex to become accepted as the alternative method of funding commercial property and wants to expand both in the UK and overseas.
They intend to work with banks to take over some of their existing loan books, using the platform to refinance them, and to bring many institutional lenders to the platform.
Said Lynn: “Our three year projection shows a return on investment of 5.7 times and an IRR of 87 per cent.
“The size of the market and the opportunity to place more larger ticket loans, means that this platform has the ability to grow into a £100 million+ business very quickly with a £500 million loan book within less than three years.
“We will seek a listing on the AIM market once new business momentum and scale justifies it – the foreseeable target valuation is a £100m+ capitalisation.”
The equity investment raised on Angels Den is for the development and expansion of the business, including recruitment of key personnel and targeted marketing. While already built and tested, the platform will also benefit from the increased investment with new functionality planned to increase turnover and profitability.
According to Relendex, there is currently £285bn of loans outstanding against UK commercial property and large residential schemes, held predominantly with UK lenders and building societies, as well as international lenders dominated by German and North American banks. Of that more than £150bn is due for refinancing by 2016, but of the 74 lending institutions surveyed by De Montfort University, 28 indicated that they weren’t open for new business in 2012. This includes a number of high profile organizations such as SocGen, Eurohypo and Clydesdale.
“We want Relendex to become accepted as the alternative method of funding commercial property in the £2m to £20m range, and to expand both in the UK and overseas (with partners) as a successful business model,” said Lynn.
“It will be seen as the logical way to bypass the banks, who are inefficient and have less funds to lend than pre-2008. We will work with the banks to take over some of their existing loan books (using the platform to refinance them) and bring many institutional lenders to the platform.”
Founder of Angels Den Bill Morrow said: “Relendex is a fantastic opportunity with some no-nonsense founders behind it. It’s great to see that they’re in talks with a number of our angel investors already. Ignore this one at your own peril.”