Here is how EasyMoney compares to other similar platforms which offer property development and bridging loans:
|Platform||Link||Target Rate (%)||My XIRR (%)||Status||Live Rating|
|Review||Up to 16%||-7.9% (estimate)||CLOSED||1.5/5|
|Review||Up to 7.2%||7.23%||OPEN||4/5|
|Review||Up to 11%||5.40%||OPEN||4/5|
|Review||Up to 13%||1.04% (estimate)||CLOSED||2.5/5|
|Review||Up to 8%||1.89%||OPEN||3.5/5|
|Review||Up to 8%||TBC||OPEN||3/5|
What is EasyMoney?
EasyMoney is a relatively new platform, having opened in 2018. Much like other companies that utilise the ‘Easy’ brand, it is not operated centrally but leverages the brand name in return for a fee. Thus the platform should be considered no different to others in the sector. This is especially so when considering its solvency – it is a separate company and is not backed by any others under the same umbrella.
Function-wise, EasyMoney are fairly similar to Crowdproperty. They raise money from individual investors and use this to invest into both property development loans and bridging loans. These generally are shorter-term loans from anywhere between 3-24 months.
But unlike Crowdproperty, EasyMoney is a hands-off product for investors. Investors get paid a projected interest rate, but this rate varies depending on the risk level of the investments they are assigned to. Further, this interest rate is only a target, although thanks to the platforms performance so far, they have delivered.
We can see that this platform is large. The average development loan size is in excess of £5.6m. With an average investor having access to just 8 loans, we can assume that institutional funding must play a part somewhere. Unlike other sites, it is not possible to view further details on the properties the investment is secured against, and neither are there updates.
Here is a list of EasyMoney features:
|Advertised Returns||Up to 8%|
|Investment Type||Property Development|
|Loan Security||First/Second Charge|
|Secondary Market?||Can sell subject to availability|
|Available in ISA?||No|
|Active on forum?||Yes|
|Sign-up offers?||£50 on £1000|
EasyMoney signup offer
EasyMoney do have a sign up offer, but only when you are referred. The bonus amount is £50, but you’ll need to follow this link, sign up and invest at least £1,000 and keep it invested for 12 months before your bonus is credited.
Joining EasyMoney also qualifies you to join the ‘Lifeworks’ app which offers small discounts across various brands.
Is EasyMoney profitable?
EasyMoney is a trading name of E-Money Capital Limited. They have been incorporated since 2003. Their last accounts cover the period until 31 December 2019. A good sign is that full accounts are filed, instead of the abbreviated ones seen.
Despite EasyMoney only being in existence from 2018, the company accounts go back a long way. This appears to be little more than a holding company, with several name changes along the way.
The company is loss making at this point. An operating loss of £1,023,120 was booked last year which was down from £1,473,113 the year before. The reasons behind the losses are much the same as any young P2P company: expenses are bigger than collected revenues.
The previous year had seen shares issued which raised approximately £1.78m. Combined with a reduction in the cash and debtor balances, this has managed to absorb the losses. But with cash at just £34k at the year end, it seems likely that another raise needs to happen.
An amber flag is that the EasyMoney ‘About Us’ page does not contain any details about the people that are directors of E-Money capital. We get a big picture of Sir Stelios, but it appears he is not involved with the company at all.
EasyMoney Operating Model
Initially, EasyMoney works like most other P2P platforms. You will need to sign up, and provide identification. New investors will also need to complete a short suitability test. This is made up of some very basic questions regarding the product and should not pose any problems. Once this is done, you can choose an account to open – either a regular one or an IFISA and fund it. Currently, only bank transfers are accepted.
The difference comes when investing the cash. Unlike other platforms, there are no details of loans that are available. All you can choose is the amount you want to invest. This is an important decision, as this amount determines your interest rate. Currently, interest is paid as follows:
- £100+ = 3.67%
- £10,000+ = 5.12%
- £20,000+ = 6.06%
- £100,000+ = 7.01%
These amounts are cumulative. You do not have to deposit £10,000 in one go to qualify for that rate, it can be made up of several deposits.
Additionally, these amounts are target returns and not guaranteed rates. This approach differs from most platforms, as returns are correlated to the risks that your money takes. Here, for EasyMoney the margins are wider on the smaller investors. This offsets the smaller margin on the bigger ones.
Your pledged investment is then used to purchase parts of loans. It is only possible to see more information about the loans once they have been purchased, but even then only a simplified version of the details is shown. LTV, loan amount, risk grade, loan term and the loan type is given. A further box describes the security and the exit method.
You are unable to choose how your money is diversified. On other platforms such as Crowdproperty and LendInvest you can stipulate the maximum you want to be allocated to any single loan, but this is not an option on EasyMoney. You may start off invested in a single loan, but you can be re-balanced into different loans as time goes on. However, this is not guaranteed and there is no way to speed this up.
An exception to this is the ‘Sell Loans’ function. This operates as a slightly crude secondary market. You are unable to choose which loans in your portfolio are sold off, and a sale depends on another purchaser being assigned your part of the loan. It is difficult at present to judge the liquidity here.
Interest is paid on the 15th of the money, although the amount may vary. The platform offers both property development loans and bridging loans and some offer interest monthly and some at the loan conclusion.
What you do have control of is what you want to do with your interest and repayments. You can either queue these for reinvestment, or choose to keep them in your cash account where you can withdraw them.
How are funds protected?
As with all peer-to-peer investments, loans made on the EasyMoney platform are not covered by the Financial Services Compensation Scheme. The exception to this is unallocated money, which is segregated in a separate account and is protected. There is also no provision fund, so if a loan does go bad your entire investment is at risk.
This risk is mitigated by careful selected choice of borrowers and the use of lower than industry standard LTVs. So far this has been extremely successful and EasyMoney have a blemish-free record, although it should be pointed out that past performance is not necessarily any guide to the future.
Platform risk is covered by an established wind-down procedure. Operations pass to Street UK in the event of platform failure. While we hope it is never tested, it is a positive that the nominated back-up company already is an established business in the same field.
EasyMoney Review: Pros
There are some good points about EasyMoney:
- Hands-off operation – the platform is about as low maintenance as you can get. Simply deposit your money, decide what you want done with repayments and then let it do the rest.
- Low minimum investment – The minimum investment is £100, so this is not a real barrier to entry. Your deposits can be scaled upwards to achieve the higher rates if you like the platform.
- Great track record – results have been excellent so far with no defaults. The platform is open with its statistics and the loans it has made.
- Ancillary discounts – an added but narrow benefits is additional discounts gained for signing up.
EasyMoney Review: Cons
There are also some bad points about this service:
- Higher rates hard to get: The higher rates are reserved for those who invest more. The top 8% rate needs £1m to qualify. This does not favour smaller lenders.
- Lower tier not competitive: The lowest target interest rate is 3.67%. This is not that competitive. Other potential black box options like LendInvest easily beat this.
- Lack of control: It is not possible to choose your loans, or even see much detail on what your money has gone on. Further it is not possible to choose your level of diversification and you are reliant on this being done for you.
- Platform stability: The backing company are loss-making and the site does not provide much information about key personnel. The connection with the Easy group of companies is in name only and there is no financial connection.
Conclusion of EasyMoney Review: EasyMoney are a relatively new player on the scene. They offer an almost completely hands-off experience at a low minimum investment. This makes it ideal for those who don’t want to check investments regularly. Their track record so far is also good. On the downside, their higher interest rates are only available to those investing larger amounts of cash. The company behind EasyMoney also are still loss-making at this stage, so platform stability may be a worry.
Disclaimer: This EasyMoney review represents my own opinions and should not be substituted for investment advice. Please research before you invest with any firm. Typically P2P investments are not covered by the Financial Services Compensation Scheme (FSCS) in the same way bank deposits are. There are no guarantees that you will receive the returns advertised (or even a return at all).