Key Risks

Key Risks

We lend to carefully selected property professionals looking for short-term bridging loans, the funder return comes from interest the borrower pays on the loan.

Your capital is at risk and interest payments are not guaranteed, in the event of a borrower default.

Withdrawals from the Cohort Invest platform are not like an instant access savings account and your capital is tied up for the term of the loan, there can be significant delays in getting your money back, for example if a borrower repays late.

If we have to enforce a security as the borrower is unable to repay their loan, you may receive back less than you invested where the sale takes place at a lower price than was paid initially.

If you are unsure of the risks and whether Cohort Invest investments are right for you we recommend that you seek professional advice tailored to your personal circumstances.

Cohort does not provide advice to you as Funder on the suitability or appropriateness of lending moneys to us. It is your obligation to take your own financial, legal and tax advice before entering into any arrangement that we may put in place with you. Please also note that Cohort accepts no responsibility to you for the sufficiency or correctness of any such advice that you may receive from third parties.

1. Does Cohort Invest provide investment advice?

No, Cohort Invest provides 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 funder’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.

Cohort Investor Cohort Capital does not provide investment advice.

2. Is Cohort Invest regulated?

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.

3. What happens if a borrower defaults?

If a borrower defaults, Cohort Invest acts in the funders best interests and will take steps to recover the sums due. The funder 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.

4. Could I be required to contribute more money after my initial loan?

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.

5. When considering whether to contribute towards the funding of a loan, what risks should Funder stake into account? 

Potential funders should carefully consider 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 investment?’ 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 funder's 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.