Any interest or capital Cohort Invest receives will also be transferred into the Client Money Account and held on investors' behalf by Cohort Invest as client money. Funds may be held prior to completion of the loan for up to 10 working days. Any further delays investors are notified with the option of having funds returned.
Investors are entitled to receive their share in the interest earned on a loan that they have participated in during the lifetime of the loan. As payments of interest are typically due from borrowers on a monthly basis, Cohort Invest distributes the interest it receives from borrowers on or around the 1st day of each month. An investor will only receive interest if the borrower of the loan they have participated in has paid it. The investor's share in any such interest paid by the borrower is proportionate to the amount their funding contribution bore to the amount of the overall loan.
Cohort Invest may distribute details of potential loans to investors who have entered into a Participation Agreement and who indicate they are interested in making a contribution towards the funding of a loan. Given the number of registered investors and the need to respond to borrower requests in a business-like timescale, it is impracticable for Cohort Invest to offer every opportunity to all of its registered investors. Accordingly Cohort Invest is not obliged to inform every registered investor about loan opportunities. Cohort Invest will endeavour to contact all registered investors from time to time to inform them of an opportunity, but if you are actively interested in contributing to a loan we suggest you contact Cohort Invest directly and check the platform regularly for new opportunities.
Cohort Invest is a sub-division of Cohort Capital; a specialist property bridging lender. Cohort Capital facilitates short-term loans, commonly referred to as “bridging loans". Cohort Capital enters into a loan agreement with the borrower and makes the loan to them. Investors do not make the loan themselves but rather fund the loan through Cohort Invest.
Cohort Capital, facilitates short-term loans, which are secured against real estate properties. The capital necessary for these loans is sourced from private equity and discretionary capital.
Typically, Cohort Invest then secures funding from a variety of investors for each loan through the platform. These investors need not have any prior acquaintance with one another nor are they required to enter into agreements amongst themselves.
Upon receiving interest payments and the repayment of the borrowed capital, Cohort Invest then distributes these returns to the respective investors who contributed to financing a particular loan. The distribution of returns is proportional to each investor's contribution relative to the total loan amount, subject to fees and charges.
First you will need to register with Cohort Invest by creating an account via the funding platform and completing the funding declaration and assessment. You will need your passport to hand as it will be used to carry out the standard Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
Once you have passed all the checks, agreed to the online Funder Terms & Conditions, and signed the online limited Power of Attorney, your account will be approved. You can then fund your account and start lending on loan opportunities.
Yes. You can still be a funder, provided Cohort Invest can verify your identity through other documents such as your driving license, utility bill or bank statement.
Yes, we accept international Funders, with the exception of US citizens. As Anti-Money Laundering (AML) and Know Your Customer (KYC) checks differ for international funders, a member of the team will contact you once you have registered, to complete the process.
Yes, typically, the minimum investment is £250,000. The minimum investment for any particular loan is set out in the loan’s term sheet.
Loans on the Cohort Invest platform run typically for 12-36 months.
Funders choose which loan opportunities they would like to lend on via the Funding Platform. Each funder enters into a Funding Agreement with Cohort Invest which sets out the arrangements by which the Funder makes advances.
On completion of each loan, Cohort Invest enters a Declaration of Trust with each funder. This document declares that it holds a proportion of each loan and security in trust for the funders, proportional to the amount of capital advanced in relation to the total loan amount. The Declaration of Trust ring fences the underlying loan security for the benefit of the funder of that loan. This would mean that in case a borrower defaults, then only the capital lent by the funders for that deal would be at risk. This would not impact our other funders, which is why funders are urged to diversify their portfolio to spread the risk.
Cohort Invest collects interest from the borrowers (per the Borrower Agreement) and then pays each funder's interest on the funds applied to each loan. The interest is set at a pre-specified rate and paid monthly (per the Funder Agreement). At the end of the term, Cohort Invest returns the funders proportion of the loan capital when it is repaid to, or otherwise recovered, by Cohort Invest.
Yes, funds will need to be lodged with Cohort Invest before you can start funding loan opportunities via the platform.
It is important to include your client number on the bank transfer, so that Cohort Invest can correctly allocate your funds. Failure to do so may result in a delay before you are able to lend the funds.
There is no charge for depositing funds. However, you may incur banking charges for international transfers. To the extent Cohort Invest incurs such charges, such amounts will be deducted from the balance transferred.
There is no charge for withdrawing funds to UK bank accounts for next day settlement. You may incur charges for international transfers. To the extent Cohort Invest incurs such charges the amount will be deducted from the amount withdrawn or taken from your account with Cohort Invest.
Yes, in the UK you are liable for income tax on interest that you receive as a funder. As part of its service, Cohort Invest makes available online reports of income and deductions in each tax period. Cohort Invest is not currently required by the UK tax authorities to deduct withholding tax (WHT) on interest paid to individual funders, nor to companies that are subject to UK Corporation Tax. Funders should seek independent professional advice in assessing their liability to taxation in their relevant jurisdiction.
Cohort Invest takes security on behalf of the funder group. This could be a first charge (mortgage) for senior loans, or a second charge in the case of mezzanine loans, over the property asset. Cohort Invest takes security over the Borrower's asset and holds it on trust for the benefit of the relevant funders, both as a group and as individuals in proportion to their participation in the loan, under the Trust Deed.
Cohort Invest offers a ‘Co-lend’ product to funders where Cohort Capital will fund a portion of the loan alongside funders. Cohort Capital takes a higher risk position to the funders such that if the value of the asset on which the loan is secured against were to drop by more than the borrower’s equity, Cohort Capital would make the first loss before the funder’s capital would be at risk. The reason we use this model is to show our incentives are directly aligned with our funders to the extent that we put ourselves in a first loss position so we lose money before our funders would (in a case where the property value was to drop, and a loan was being enforced on).
No, Cohort Invest provides all necessary information for you to make a decision, but does not provide advice. You should not rely on communications with or from Cohort Invest as being advisory in nature.
It is always the investor's responsibility to ensure that any loan funding they want to participate in is suitable for them and that they have considered and are satisfied with all the details about that loan.
Neither Cohort Invest or Cohort Capital provides investment advice.
No, Cohort Invest is not authorised or regulated by the Financial Conduct Authority or any other regulator. As Cohort Invest operates outside of regulation, funders do not have access to the Financial Services Compensation Scheme or Financial Ombudsman Service.
Cohort Invest offers unregulated bridging loans which are secured against a residential or commercial investment property, development land or land with planning permission. Cohort Invest has received a lengthy memorandum of legal advice regarding the regulatory status of Cohort Invest's bridging finance business. Cohort Invest's lawyers have also provided a "to whom it may concern" letter of the synopsis. A copy of the “to whom it may concern” letter is available to funders on request prior to entering into any Funding Agreement.
If a borrower defaults, Cohort Invest acts in the funders best interests and will take steps to recover the sums due. Cohort Invest will investigate the circumstances and determine in its sole discretion how best to recover sums due from a borrower. It is possible that Cohort Invest will decide that a term extension or other restructuring of the loan is the best option. Enforcing against the security over the relevant real estate property or asset is generally a tactic of last resort once it is clear that other steps to recover the funds have failed. Cohort Invest are obliged to act in the best interests of funders who have advanced funds towards a loan when determining how best to recover funds on a borrower default.
You will not be required to contribute any further funds to fund the loan amount without your prior agreement. However please note you may be required to contribute towards the cost of collecting or recovering sums due from a borrower in the event that Cohort Invest, acting in the best interests of the funders collectively, considers that it is necessary to do so.
These costs may include costs or disbursements arising in connection with the appointment of third-party providers (such as lawyers, auction houses, LPA receivers or debt collectors) or other reasonable costs of Cohort Invest taking steps that are additional to, or outside, the normal course of their recovery process.
Funders will be required to pre-fund these costs in proportion to their contributions. Cohort Invest will be entitled under the loan agreement to seek to recover these costs from the borrower. If a funder does not pre-fund these costs, Cohort Invest will be entitled to offset them against any sums recovered and due to that funder.
Potential funders should consider carefully the details they are given about the terms of a proposed loan, the borrower and the associated real estate property as these details vary on a case-by-case basis. Cohort Invest does not advise funders and it is the sole responsibility of the funder to ensure that any loan funding that they want to participate in is suitable for them and that they have considered and are satisfied with all the details about that loan.
The risks include but are not limited to the following:
Borrower default: There is a risk that a borrower will not repay some, or all, of the interest due or capital borrowed and/or may make some payments late. This will influence how much of a return a funder receives and when they receive it. Cohort Invest will take steps to recover payments due, including by enforcing against the security it has in respect of the borrower’s obligations. The debt recovery process typically takes additional time and cost, and it cannot be guaranteed that all debts will be recovered. See FAQ ‘Could I be required to contribute more money after my initial loan?’ for situations where you may need to contribute to this collection cost.
Value of the security: Cohort Invest will take security in respect of a loan against real estate property and will obtain an independent estimate of the valuation of that property. The ‘loan to value’ ratio is stated in the term sheet regarding the loan and indicates the extent to which the value of the property is estimated to exceed the amount of the loan. Property values may however fall, and a property sale may not recover the estimated value of the property.
No secondary market or ability to redeem early: A funders interest in relation to a loan is not assignable or sellable to a third party and there is no secondary market on which the value in a contribution to a loan can be realised. Funders cannot redeem their interest from Cohort Invest early. Accordingly, a contribution to the funding of a loan should be regarded as illiquid and funders should assume that the only way to realise the value of their loan is for the borrower to repay the interest and capital.
Fraud: It is possible that a borrower or a person acting for them such as a solicitor could act fraudulently when borrowing funds. Cohort Invest and their conveyancing solicitors will take commercially reasonable steps to mitigate the risk of fraud, but the risk cannot be completely eliminated.
