Kuflink – the P2P site offering lower risk products without the low returns. We talk to CEO Narinder Khattoare

Kuflink offers some of the best returns available anywhere for lower risk P2P products

There is a lot of competition amongst British P2P investment sites to attract new investors. Some sites are finding it difficult to create products that attract a large number of investors. However, Kuflink is one P2P site that has been successful in finding an interesting niche for itself. It is targeting investors who are looking for better returns than can be found at Ratesetter and Funding Circle, but with substantially less risk than other real estate focused sites, such as Lendy.  Our full review of Kuflink can be found here

Why do Kuflink’s loans and products to have a lower risk profile? Firstly, all the loans are secured on real estate assets (mainly residential) with modest LTVs (typically in the 60-65% region). The assets are selected in lower risk areas and are generally lower value, where market liquidity is better currently. What reduces the risk further for investors, and is a unique feature, is Kuflink’s co-investment, which is structured to absorb any losses first. 

This combination of reasonable interest rates (typically 6.5-7% for the ‘self-select’ loans) and low risk is difficult to find currently in British P2P. Kuflink is fully authorised by the FCA, which is viewed as increasingly important following the recent closure of Collateral UK.  Kuflink was profitable in the last reporting period (to June 2017) and more than £4 million of equity is held by the business. Very few UK platforms are currently profitable. This strong financial position is positive for Kuflink’s investors. 

As Kuflink is relatively new to the P2P scene, we decided to interview Kuflink’s CEO Narinder Khattoare to help investors get a better insight into the platform.

Kuflink are currently offering one of the most generous promotions for new investors. To visit Kuflink, and qualify for a £100 welcome bonus, click here

Narinder Khattoare

Interview with Narinder Khattoare, CEO of Kuflink

Narinder, the Kuflink group of companies has been operating since 2011, and you set up the P2P platform in 2016. Why did you decide to launch the platform?

We launched the P2P platform because we saw that people were earning very little on their monies sitting in a traditional bank account. The platform provided a solution to this by offering a way for savers to make their money work harder for them.

Can you please explain the business model and group structure. How much of your loans are funded by P2P investors? Do you have other funding sources (bank lines etc)?

Our investors fund 80% of each loan and Kuflink Bridging funds the other 20%. Yes, we are in the process of securing [other sources of] funding.

How many people work at Kuflink? What’s the background of the senior management team?

There are currently around 30 employees working at Kuflink. The senior management team have a background in finance, property and consultancy.

Some British P2P sites have been experiencing higher default rates recently. What steps are you taking to ensure that Kuflink doesn’t have similar issues?

We ensure that we complete thorough due diligence on both the borrower and the property prior to lending so that only what we perceive to be the highest quality loans go onto our platform. If any of our loans to go into default, we have a legal charge over each property that we can exercise. We also co-invest up to 20% of each Select-Invest deal which shows confidence in our loans and is an added layer of protection that investors will not find elsewhere – this means we risk the first 20% loss if a loss were to occur.

Who owns Kuflink? 

Kuflink Ltd is owned by Kuflink Group Plc which is a family-run business. 

You became fully authorised by the FCA last year. How difficult is it to get that authorisation? What changes did you need to make?

There were few changes we needed to make. We became funded within 8 months of applying for authorisation.  

There’s a lot of P2P platforms in the UK. What are you trying to do to differentiate yourself?

We are one of the only platforms that offer such a significant level of protection for their investors by investing up to 20% of each deal ourself.

We really like the 20% subordinated co-investment you provide on the self-select loans. Why do you reduce the subordination for the auto-invest and IFISA products?

Our level of investment in Auto-Invest and IFISA is lower because we looked to match similar offerings already on the market. We also feel that your investment and risk is spread with these products across various loans which allows you to diversify your investment more easily than you may be able to with Select-Invest.

What types of properties / locations do you avoid lending against to reduce risks?

[We avoid lending against] Grade I listed buildings, Places of worship, Grade II Listed buildings subject to Credit Committee approval, flying freehold, Northern Ireland, Wales (except Cardiff), Scotland (Except Glasgow and Edinburgh), and short leasehold.

You offer similar interest rates for development loans and bridging finance. The bridging loans appear to have less risks – why are the rates similar (around 7%)?

We consider all factors involved when coming up with a rate for each deal. We have an algorithm that takes into account all relevant information, including whether it is a development or bridging loan, borrower’s repayment history, loan security and so forth.

Narinder, thanks for your time today.

£100 bonus for new investors

For a limited time, Kuflink are offering new investors a £100 welcome bonus. The minimum investment to qualify is only £200, which we think makes this a very attractive deal. For more information, and to qualify for this offer, simply use the link provided. 

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