Flender review

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Want to invest with Flender? Click here! Using this link will provide you with a bonus of 5% on investments made in the first 30 days. For full disclosure – We will receive a bonus too. Thanks for your support!

WHY DO WE LIKE WHAT WE LIKE??

1)   Low Default Rate

Having opened its doors it 2015, Flender boasts a historical default rate of 0.3%. With average default rates in the P2P industry ranging from 0.3% to 6.2%, this is extremely impressive. A note of caution however, keep reading below!

Flender Stats

2)   Transparency

Flender prides itself on its transparency, and with good reason. Each business loan advertised is accompanied by a synopsis showing what the loan will be used for, a brief history on the company and a financial snapshot of the latest accounts. This lets investors perform their own analysis on loans available and invest according to their investment style.

We like to pay attention to the following:

  • Is the company profitable and is the income growing year on year?
  • What will the loan be used for? Does this make business sense and is there a market?
  • Do current assets significantly exceed liabilities? We care about this as when a company becomes insolvent in Ireland, assets are sold for cash and distributed by a liquidator or receiver. Investors are classified as “unsecured creditors” and are at the very bottom of the cash distribution order. In order to ensure that at least some debt will be recovered should the worst case scenario occur and company goes out of business, we like to see assets significantly greater than liabilities!
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3)   Strong Credit Checking Process

The following standard criteria are assessed by the Flender credit team prior to approval:

  • ID and Address Confirmation
  • Trading accounts for the past 2 years
  • Bank Statements
  • Tax Clearance Certificate

Details on the criteria used by Flender to accept/reject applications are not reported, however, it is has been noted that around 80% of applicants are rejected. This rigorous credit checking process is welcome news for investors and is a major factor in keeping loan default rates as low as they are.

 WHY DON’T WE LIKE WHAT WE DON’T LIKE??

1)  Relatively Young Platform

Flender, having been founded in 2015, has yet to experience extreme market conditions such as those experienced in 2008.  There are a number of factors that contribute to a low loan default rate, including:

  • Internal process and procedures for approving new businesses
  • Management Team experience
  • Ongoing debt management and recovery

However, perhaps the most important factor that contributes to a loan defaulting is the market conditions. Ireland is an open economy and is extremely dependent on how the US and EU is performing. When these markets are not performing, insolvency rates increase and subsequently loan defaults increase.  Insolvency rates peaked in Ireland in 2012 and have steadily been decreasing since. (Source data)

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Investors should be wary of the cyclical nature of the irish economy, it is likely that these rates will increase when the next recession occurs.

2) Lack of investment opportunities

The market size for P2P loans in Ireland is relatively small and subsequently there are not a whole lot of investment opportunities available at any one time. Users frequently comment that there are no open loans available, or that the loans listed do not meet their investment needs.

Investors need to be savy as new opportunities offering good returns are generally snapped up within a day. We would recommend using the autoinvest feature to obtain the best deals when they come out, and/or signing up for emails that let investors know when the next loan is ready to invest in.

3) Weak safety net

Loans listed on Flender are generally secured by a Directors Guarantee and a one month security deposit. This means that directors personally guarantee loans so that should a company go out of business, their personal assets can be seized and used to pay the debt owed. While this does indeed provide a safety net for investors, there is a high risk that directors that have lost their business would engage in bankruptcy proceedings, resulting in limited reimbursement of debt to investors. Additionally, we understand that the security deposit is being phased out over the coming weeks and months.

We would like to see Flender implement some of the best practice safety nets seen elsewhere, such as a buyback fund or other forms of investor protection.

CONCLUSION

Flender provides a unique investment opportunity to invest in business located in a strong established and developed market. The irish economy is growing and business failures are decreasing, reducing investment risk. Investors should use Flender along with other P2P platforms to diversify their investment assets to a new geographic location, and grow investments at a steady rate.

Want to invest with Flender? Click here! Using this link will provide you with a bonus of 5% on investments made in the first 30 days. For full disclosure – We will receive a bonus too. Thanks for your support!

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8 thoughts on “Flender review

  1. Thanks for the article on Flender.

    Just a few bits you can add in. As a lender you are not covered by any regulation with Flender as there is none in Ireland for PTP

    Flender do not have very minimal t&c no complaints procedure or clear process. There have been loans where they have not advised that given company has more than 1 loan or included these figures in the financials and then issue no recourse due to there error : Company X already had 3 loans for 2018 was not advised with loan number 4 in 2018 and not included in the financial snapshot. Worst still loan went straight into being paid back using deposit which was not advised until borrower stopped paying after deposit ran out. Financials on all loans are not accurate as do not include depreciation figure for ebita.

    All above raised with Flender not just by me but a number of people and they offer no recourse or goodwill due to their error and have yet to provide depreciation figure or clear and complete t&c .

    All I’m saying is I am personally now a bit wary of investing further funds and I use Linked Finance more who’s figures, t&c processes and procedures are more accurate and user friendly even though they charge a fee I think for the extra bit of attention to detail and clearness of financials is worth it.

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    1. Hi DK,

      Thanks for commenting! Happy to hear that you have funds in other P2P platforms – for us the ideal strategy is to invest in a number of platforms so that we are diversified across different geographic locations. A few counterpoints we would make:

      – You mentioned that Flender are not covered by any regulation in Ireland. Do you know of any other platforms that are covered by a regulation that would protect investors? What exactly are the protections provided? (e.g. Should a recession hit). We would argue that regulations only provide a very limited protection to investors, are not on the top of our list when it comes to choosing platforms.

      – “Financials on all loans are not accurate as do not include depreciation figure for ebita”. Figures for EBITDA are usually provided – this stands for Earning before Interest Tax Depreciation and Amortisation, so would not include depreciation. The purpose of this is to provide an overview of performance prior to deductions outside of management control (such as dep, tax, etc)

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      1. Regulation forces financial entities to follow full disclosure, upfront financials and recourse in event a financial provider provides insufficient information for a loan or treats a customer unfairly. It also regulates the way in which a provider operates and risk assessment of loans.

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    2. This complaint is from a well-known complainer on social media sites about various companies.

      Concerning his complaint, there was an investigation, and the accusations were proven not valid. We advised the customer about this numerous times.

      Out T&C follows the best industry standards and is transparent. We have not received any complaints about this before from any of our four thousand happy customers.

      Flender customer support is provided through online chat, phone support, and email. We are very proud to have thousands of happy repeat customers.

      Although our firm is authorised by FCA, we do not provide finance in the UK. Flender provides funding in Ireland, and p2p finance is not a regulated activity in Ireland.

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  2. I am not a known complainer about companies on socially media. This is defamatory and totally untrue and respectfully request under 2009 act Flender withdraw this false and defamatory remark.

    I have given an opinion which is non defamatory and one should be able to safely give an opinion about a PTP without being defamed.

    The loan did not advise that company had 3 other loans all issued in 2018 or advise the amounts for these loans in financials, This is totally misleading and one would think these would be provided.

    More than happy Flender with your permission to produce statements and financials Flender provided which fully back up my review.

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