FREQUENTLY ASKED QUESTIONS
1. About Adelpha
Who are Adelpha?
Adelpha is UK-based lender providing specialist finance to business, property investors and developers, Through a self select co-funding platform Adelpha enables individuals, corporations and financial institutions to co-fund in loans backed by property.
Is Adelpha regulated?
The operations conducted by Adelpha are not regulated and accordingly it is not authorised and regulated by the Financial Conduct Authority.
Is all Adelpha's lending secured against property?
Whilst Adelpha does lend to businesses without being backed by property. Only loans that are backed by property are offered for co-funding through the Adelpha co-funding platform.
Why would someone borrow through Adelpha instead of a bank?
The short-term property finance provided by Adelpha is not typically provided by bank's at the speed required by borrowers. This a regular form of funding for professional property investors, businesses landlords and developers that need to move quickly to do things such as secure a purchase, purchase stock, release funds in a property or move onto the next stage of their property project.
How does Adelpha make money?
In addition to making the return on the portion of loans that Adelpha retains, Adelpha also make a spread on the interest rate that is charged to the borrower and the rate that is paid to investors. For example, a borrower may pay an interest rate of 1.10% per month, of which an investor may receive 0.95% per month and Adelpha receives 0.15% per month. The spread Adelpha typically receives is around 0.15% per month.
2. Our lending process
Are Adelpha's loans secured?
Yes. All the loan's available for investment on Adelpha's co-funding platform are secured by a charge which is registered against the relevant property. We may require security over the borrower’s other assets and usually take personal guarantees from the key people in the borrower’s business.
Who borrows from Adelpha?
Adelpha lends to businesses, property developers and property investors throughout England and Wales. Typically these are individual business people or small and medium-sized companies who are looking for fast and flexible short-term finance. A borrower may need to secure short-term funding for an investment purchase at auction, development finance to fund a housing construction project or business finance to fund expansion plans or help cashflows.
How does Adelpha underwrite loans?
Adelpha's loan underwriting team make an assessment of all loan applications before a lending decision is made. The team has extensive lending experience which they use to carefully assess both the borrower and the property or development project. Underwriting and fraud detection systems are used when assessing the potential borrowers.
What checks does Adelpha perform on borrowers?
All borrowers, their property, loan exit strategy and, if applicable, prospective projects are subject to a thorough process of due diligence by Adelpha's underwriting team to assess the risk of the borrower failing to repay their loans. For instance, an assessment of the borrower’s credit history, professional past and previous property experience. A full evaluation of the property for which the loan will be secured against is undertaken and, if applicable, the project. An independent third party valuer is instructed and they will visit the property and prepare a detailed valuation report which includes an assessment of the local property market dynamics. Adelpha then make an assessment of the property aided by this valuation.
Borrower enquiries, procedures and technologies are used to minimise the risk of fraud by the borrower (or their solicitor). Adelpha uses the leading UK fraud detection systems to aid this process.
3. Investing with Adelpha
How does Adelpha's co-funding platform actually work?
Adelpha's co-funding platform enables registered investors to build a portfolio of loan investments targeting rates up to 12%.
Investors select each loan that they wish to invest in. The loans have different available returns, duration and property security. They have been approved by Adelpha's underwriting team and are funded by an Adelpha associated Special Purpose Vehicle (SPV).
The investors purchase the loan via a debt receivable agreement that links the debt repayments to the underlying loan. The investor digitally signs the debt receivable agreement and complete the purchase by transferring purchase funds by the agreements required settlement date.
Investors then receive monthly returns into their bank account and receive back the capital they invested when the loan is repaid by the borrower.
What am I investing in?
An investment on the co-funding platform is an investment in the debt repayments received in connection to a specific loan secured against property.
What is the target return?
On the Adelpha co-funding platform, investments in loan receivables with targeted returns of up to 12% are offered.
How much does it cost to invest on the Adelpha co-funding platform?
Adelpha does not charge investors any set-up fees, operational fees or any other charges for buying a receivable.
Does Adelpha operate a secondary market?
No. Currently Adelpha does not operate a secondary market for investors. Although Adelpha investors are able to request an exit of a loan investment through their Membership Account. Adelpha will decide at its discretion if it is willing to repurchase the investment. Any repurchase will be at a discount negotiated between Adelpha and the investor. Investors should only invest in Adelpha loan investments if they are willing to hold the investment for the duration of the underlying loan.
Is the income I earn net of tax?
No. The income (sometimes referred to as “interest” or “return”) you earn is gross of tax. You are responsible for your own tax affairs.
Can I include my Adelpha loan investment in an ISA or a SIPP/SSAS?
Investments that are made available on our platform are structured as debt receivable agreements which not able to be included in any of the currently available ISA wrappers.
Adelpha does offer a bond product to members which is intended to be made eligible to be part of a stocks and shares or innovative finance ISA allowance in the future.
What happens to my investment if Adelpha stops operating?
A benefit of investing through Adelpha’s co-funding platform is that investors do not have to deal with a borrower directly. Adelpha undertakes all borrower dealings, however, if Adelpha was to fail, investors would not have direct access to borrowers to recover their money. Adelpha has wind down arrangements in place to ensure the loans and associated investment contracts are continued to be serviced. An investor's investment contract is with a Special Purpose Vehicle (SPV) which is ring fenced from the operating performance of Adelpha. The sole operating purpose of the SPV is to hold the property loans including the legal charge and any other security taken out. This security remains in force in the event of Adelpha becoming insolvent.
Should I seek advice regarding investments?
If you require guidance, you should seek advice from an independent financial adviser, solicitor and/or accountant. Adelpha do not offer any legal, accounting, tax or investment advice.
Is my investment covered by the Financial Services Compensation Scheme (FSCS)?
No, investments on the Adelpha co-investment platform are not covered by the UK Financial Services Compensation Scheme (FSCS) in the way that a bank deposit would be.
No. Investing in our loans is not a risk-free investment and Adelpha does not guarantee that your capital will be returned.
Is my investment secured?
Your investment is in a loan secured on property. This means that if the borrower fails to repay their loan, Adelpha can seek to recover any outstanding amounts by enforcing the security and taking possession of the property. A full return of your capital is not guaranteed.
4. Setting up an account
Is it free to open a membership account?
Yes, it does not cost you anything to open your membership account. There are no set-up fees. Once the memebership account set up is complete you can make loan investments.
How can I set up an Adelpha membership account?
The process to set up an Adelpha membership account is quick and easy. You can simply click of the "Become an Investor" link on the "Invest" page of the website and complete the form. Alternatively, you can click this "Become an Investor" link and complete the form.
Once you have completed the simple online account opening form and a suitability assessment, we may need you to supply identity documents to ensure we meet our Anti-Money Laundering (AML) requirements.
We will send you a message by email if we require any further information and to confirm when these identity checks have been completed.
What personal information does Adelpha need to provide to set up an Adelpha membership account?
Adelpha needs basic personal information including your address and date of birth in order to set up your account. You will usually need to supply us with a copy of either your passport or drivers licence.
Why do I need to provide a copy of my passport or drivers licence?
Adelpha require this information in order to perform Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. In some circumstances we may seek further information before we can set up your account.
5. Making an investment
Can I choose which loans I invest in?
Yes. You have full control over which loans you invest in.
How do I find out more about a particular loan?
All available investment opportunities are located on the membership pages of the website. To view them you will need to (have set up a Membership Account) log into the Membership Account. Once logged in you will see a list of 'Available Investments'. If you want more detail about a particular loan than click the row of the investment opportunity. Once clicked you will be provided with more detail about the loan and specific property against which the loan is secured.
What information can I see about each loan?
Registered members can view a summary of key information about all available loans on the loan listings page. This includes:
The annualised interest rate available
The size and remaining term of the loan
The loan-to-value (LTV) ratio
How the borrower plans to exit the loan
Property specification and location
What the borrower intends to do with the property
What loan security is in place
Details of the valuation
What is the minimum and maximum amount I can invest in a particular loan?
The minimum amount you can invest in a loan is £5,000. The maximum investment amount is only limited by the size of the loan into which you wish to invest.
How does the investment contract work?
By investing via our co-funding platform you are investing through a receivable purchase agreement. The agreement entitles you to receive payments from Adelpha out of the payments that Adelpha receives from the borrower of the loan you have chosen to acquire.
Participating in this sort of investment does not involve you taking on any obligations to the borrower or to the property. You have no contact with the borrower. Instead, our experienced team deals with the borrower, including handling all queries, repayments, extensions or recoveries.
How do I make an investment?
Registered members can view all available investment opportunities when they log into their Membership Account. If you want to invest in an available investment opportunity then on the "Available Investments" page, enter your registered email, select the investment from the dropdown menu, enter your desired investment amount and click the "Request Investment" button. You will then be sent a Receivable Purchase Agreement to electronically sign which sets outs the terms of the investment contract. You are not obliged to invest until you have electroically signed the Receivable Purchase Agreement.
How do I fund and investment ?
The Receivable Purchase Agreement you sign will include details of the bank account to transfer the full investment amount to.
Do I have to wait until a loan is fully invested before I start earning income?
No. The loans to the borrower are already fully funded by Adelpha. You will start earning income (also referred to as interest) from the settlement date of the investment contract.
How does tranching work at Adelpha?
Available loans on Adelpha's co-funding platform are sometimes split into two parts or ‘tranches’. These portiona are of the loan are called Tranche A and Tranche B. Tranche A investors receive repayment of capital and interest in priority to Tranche B investors.
Each tranche offers investors a fixed rate of return which reflects the different level of risk in each tranche. To reflect the priority in which tranche investors are paid, Tranche A investors will be entitled to receive a lower income rate than Tranche B investors in respect of the same loan.
In all tranches, the security for the loan remains exactly the same for the whole loan. Details of any applicable tranching information is found in the download of the 'Loan particluars' located in the 'Available Investments' section on an investor's Membership Account.
What is the difference between Tranche A and B?
Tranche A investors receive the repayment of capital and inteest in priority to Tranche B investors. If a scheduled payment is not made in full to a Tranche A investor, no further payments will be made to the Tranche B investors untill all payments due to a Tranche A investor are up to date.
To reflect the priority in which tranche investors are paid (and therefore the additional risk), Tranche B investors are entitled to receive a higher income rate for the same loan invested in.
Can I automatically invest funds in my account?
No. All loan investments must be chosen by the investor.
6. Managing your investment
When is the income (also referred to as interest and return) paid to me?
Income is calculated daily and paid into your bank account on the first day of the month.
If a loan is repaid part way through a month, the income owed is immediately paid into your bank account along with capital repayable.
No. When you make an investment, your funds are committed for the duration of the underlying loan.
If a borrower repays early, Adelpha will return capital with any remaining income due to investors on the same day.
While the loans are provided with a fixed term, the loans are flexible and permit borrowers to repay before the end of the term. As a result, many loans are repaid early. In these cases, we also notify investors by email on the day of the early repayment.
A loan I have invested in is labelled "on schedule". What does that mean?
This means the income from an investment in the loan is being paid as expected. If one interest payment has been missed by the borrower, the loan is still labelled as "on schedule" while our team communicates with the borrower to understand the reason for the missed payment.
A loan I have invested in is labelled "extended". What does that mean?
This means that an extension to the final repayment date has been agreed with the borrower. An extension is only made after a risk assessment by Adelpha's underwriters includes it is an acceptable risk and the borrower must continue to pay the loan's interest.
Typical reasons why a borrower may require an extension include:
A planning application has taken longer than expected to obtain.
The refurbishment of the property security has been unexpectedly delayed.
A sale of the property security has been agreed but contracts have not yet been exchanged.
A refinancing of the loan has been delayed by the new lender's due dilligence taking longer than expected.
An agreed purchase of the property security is unexpectedly withdrawn.
Adelpha will notify investors if a loan extension is granted with the notifaction including an explanation of the reasons behind the delay in repayment. Sometimes loan extensions are made very close to the inital expected repaymnet date as the borrower has requested the extension with very little notice.
A loan I have invested in is labelled "in arrears". What does that mean?
This means that the borrower has failed to make two or more interest payments. When the loan is in arrears, Adelpha will communicate with the borrower to understand the reason for the arrears and attempt to recover the missed interest payments. If the borrower makes up the missed payments the loan's label is returned to “on schedule”.
A loan I have invested in is labelled "out of term / in breach". What does that mean?
This typically means that the scheduled loan term has ended with the borrower not repaying the loan and an extension has not been granted. It could also mean that the borrower has breached a loan condition such as an unauthorised change to the nature of the property security. Adelpha's team will communicate with the borrower to undertand their situation and work to an appropriate loan repayment strategy.
A loan I have invested in is labelled "enforcement". What does that mean?
This means that enforcement action (legal or repossession proceedings) has started to recover the outstanding debt owed by the borrower. It is the last course of action taken when a borrower has failed to make the scheduled loan payments.
Income is not paid to investors during the enforcement period, but does continue to accrue. When the enforcement process has completed, the proceeds of enforcement are applied in the order set out in the Receivables Purchase Agreement. Enforcement can be a protracted process.
If there is a loan repayment shortfall after receiving the proceeds from the property sale, Adelpha will seek to recover this from a personal guarantor (if applicable), pursue the borrower or the borrower’s directors and claim against the surveyor if the property valuation has been negligent or fraudulent. In such cases, investors are regularly updated on the recovery progress.
7. My personal information
How do I reset my password?
To have your password reset, please email us at: email@example.com
What does Adelpha do with my personal information?
Can I delete my Adelpha membership account?
If you wish to delete your account, please contact us at: firstname.lastname@example.org
How can I update my personal details
Investors cannot update their information manually. To update information on your account, please contact us via email at: email@example.com
What is your complaint handling procedure?
We aspire to provide excellent customer service, but we also appreciate that sometimes things go wrong. We have a process in place to appropriately deal with any issue you may have. Please contact us by email in the first instance at: firstname.lastname@example.org
Please note that the products and any associated services mentioned above are available to sophisticated investors, high net worth individuals, limited companies and institutions. Adelpha is not covered by the Financial Services Compensation Scheme. We endeavour to reduce risks to investors. However, investing in any investment product places your capital at risk, and so does purchasing debt receivables through Adelpha. Your capital is at risk