Q. What security can you accept for loans?
A. Loans can be arranged against land, investment properties, commercial properties, or high value assets.
Q. Where does the money come from?
A. About one third of our funds come from the Bricks founders and their families; the remainder comes from our community of about 40 private investors.
Q. Who does the paperwork?
A. We work with Top 100 UK legal firms Michelmore Solicitors LLP and Trowers and Hamlins LLP.
Q. How much can I borrow?
A. We offer loans of between £100,000 and £1,500,000. Larger loans may be possible.
Q. How long can I borrow the money for?
A. We offer short term loans, from 3-36 months.
Q. How long does the process take?
A. Loans can be approved in principle within 24 hours and funded within one week.
Q.How much can I invest?
A. Between £50,000 and £1,000,000.
Q. How long can I invest?
A. From 12-36 months.
Q. Do you provide financial advice?
A. Bricks does not give financial advice or recommendation. It is up to you to seek advice from an authorised person who specialises in advising on non-readily realisable securities. Your capital is at risk and is not protected under the Financial Services Compensation Scheme.
Q. When I lend to Bricks, who has risk priority?
A. Bricks enables you to make fixed rate loans indirectly to a borrower either secured by assets or, in the case of probate loans, with a very strong covenant. Your loan will be made under an individual loan contract directly between you and Bricks. Loan contracts may have different maturities and interest rates but all rank equally including with directors’ and founders’ own lending to Bricks.
Q. When I lend to Bricks, what is the main risk?
A. The main risk is that we are unable to continue to make the interest payments when they fall due or to repay the loan principal amount when it falls due. In order to minimise that risk:
- We check the creditworthiness of each borrower;
- Certain security documents are entered into between Bricks and the borrower (apart from probate loans) to secure the total amount repayable under the loan contracts against a property or other assets owned by the borrower; and
- We request certain due diligence material, check valuations, and a certificate of title, or we take secure possession. These steps help to reduce the risk of Bricks losing its capital but does not completely eliminate the risk.
Q. What equity reserves does Bricks hold?
A. As well as ensuring Bricks has a cushion against falling asset values, we ensure we have sufficient capital reserves to absorb unexpected losses. At 30 April 2019 our capital reserves were over £1M, three times the level required of us by the Financial Conduct Authority.
Q. How would Bricks cope with a dramatic downturn in the UK property market?
A. Because the security documents create security over property or assets, if there were to be a dramatic downturn in the UK property market, or other markets, this could affect borrowers’ ability to repay the amounts due to Bricks. However, even if the value of the security falls the borrower could continue to pay the interest and the principal as it falls due. We pass the Bank of England stress test of a 31% fall in UK residential property values.
Q. What would happen if there was a dramatic increase or fall in UK interest rates?
A. Every Bricks borrower and lender signs an agreement with a fixed interest rate and consequently we are independent of interest rate changes.
Q. How do you minimise the risk of fraud?
A. We work with Top 100 UK legal firms Michelmore Solicitors LLP and Trowers and Hamlins LLP, and as part of our legal due diligence we make certain identity, fraud and credit checks, in addition to the checks on valuation and certificate of title. Being regulated, we follow Financial Conduct Authority guidelines and meet all of our borrowers in person.
Q .What happens if I need the money I loaned to Bricks before the maturity date?
A. Although we are under no obligation to repay loans early except as specified in each loan document, we will make best efforts to find an alternative lender to buyout your loan.
Q. What happens if I need to extend the repayment date of my loan beyond our agreement?
A. We recognise that in the real world projects can take longer than anticipated and although we are under no obligation to extend our loans we will make best efforts to so do if it is prudent.
Q. As Bricks is authorised and regulated by the Financial Conduct Authority, am I covered by the Financial Services Compensation Scheme (FSCS)?
A. No, money you lend to Bricks is not covered by the FSCS.