ABLrate review

ABLrate logo
Rated 3.5 stars out of 5

What we like

What we don't like

Key facts

  • The ABL in ABLrate stands for 'Asset Backed Lending'. We strongly prefer loans that are secured by assets or real estate
  • Interest rates are high - typically 10 to 14%. Very few platforms offer rates at this level
  • The secondary market is liquid and active. There are no fees levied on secondary market transactions
  • New loans can be purchased with a debit card - no need to leave cash sitting idle on the platform waiting to be deployed
  • Provides access to asset classes that most other platforms do not, such as aircraft and equipment. This helps investors diversify their risk
  • Management have a good track record and have experience in this field of lending
  • IFISA being launched shortly (for UK taxpayers)
  • Dealflow is a little weak, we would like to see more new loans come through each week
  • ABLrate does not provide much data on their lending track record, investor returns or details of past loan defaults
  • Website is a little complex, particularly surrounding secondary loan sales
  • It's impossible to know whether the valuations and the LTVs are appropriate. You are totally reliant on ABLrate and their valuation consultants to get this right
  • Loan types - Secured loans, typically with 2 to 5 year maturities
  • Collaterals - A very wide variety of assets - aircraft, shipping containers, boats, equipment, real estate
  • Protection fund? - No
  • Autobid available? - No (you would not want to use one for these types of loans)
  • Secondary market? - Yes
  • Is platform profitable? - Yes

Conclusions on ABLrate

ABLrate is very small. Its total originations so far are around £25 million and this has been growing at £2 million per month. We don’t think many investors will allocate a large share of their P2P portfolios to ABLrate loans. Many of the assets funded by ABLrate are ‘pro-cyclical’. Their values can fall heavily during economic downturns. The interest rates offered on ABLrate are higher than elsewhere because the risk is also higher. 

However, we think there are two reasons it may make sense to allocate some capital to ABLrate. First, there is a diversification benefit. Most of the secured loans offered on other platforms are real estate loans. ABLrate offers loans that are secured by other asset classes. Second, it is a way of increasing returns as the interest rates tend to be high – 10 to 14%. The management team are experienced lenders in this field and the quality of the information provided on each loan is good. We would not allocate more than 25% of an overall P2P portfolio to ABLrate, but it is worth considering for the diversification and return benefits. 

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