Loan Book Security

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Kylie Greeff
11th October 2016

Loans on rebuildingsociety.com carry varying types and levels of security, but what does this mean?

What is security?

Loans on rebuildingsociety.com can carry the following types of security.

  • Personal Guarantee
  • Corporate Guarantees
  • All Asset Debentures
  • 1st and 2nd Priority Charge Legal charges over property

Each loan profile will highlight what security is being offered on the particular loan. The headline information can be found on the Overview tab. Every loan on rebuildingsociety.com, unless otherwise stated carries at least a Personal Guarantee.


Security on a loan is the instrument that will be used to recover funds owed should a borrower fall into arrears and their account declared to be in default. The security will allow you or rebuildingsociety.com on your behalf to try and recover the money owed to you. Therefore, generally speaking, the more security offered by a borrower the greater the chance of recovering the debt if things go wrong.

Should it affect my lending decision?

In deciding to lend to a business, the security offered by the borrower should act to give you a higher level of comfort in your decision.
While each lender has their own underwriting system and investment strategy, generally speaking when assessing a business before bidding to lend, you should carefully assess the merits of the business itself rather than solely focusing on the security being offered. This is because loan security should only be a back-up to the lending decision itself as it only becomes a factor should the business be unable to maintain repayments and default. Many lenders may consider it prudent to first assess the business’s ability to repay the loan through assessment of the accounts and other information supplied before assessing the security as a later consideration.

It is important to note that whilst all loans on rebuildingsociety.com carry some level of security, recovery of funds owed to you are never guaranteed.

How is the Rebs loan book secured?

Rebuildingsociety,com has some of of the most stringent criteria on security being offered on its loans when compared to other platforms. What we mean by this is that whilst many of our competitors may offer loans of over £200,000 ‘unsecured’ (without a personal guarantee, or with a personal guarantee but nothing else), we insist that all loans carry at least one Personal Guarantee from the main directors or shareholders, and where the loan is for more than £50,000 we require extra security in addition to a personal guarantee.

How has this changed over time?

We try and source a variety of different businesses with a variety of different security so that there are opportunities to suit a diverse range of risk appetites.

We’ve taken a look into the level of security offered on all loans. Taking into account that many loans carry more than one type of security, we have only taken into account the ‘primary’ security on the loan. So for example; where a loan is secured on a PG, Debenture and 2nd Charge, we regard the 2nd charge as the ‘primary security’ as it is generally regarded as the strongest of the three and as such we have not included the other ‘secondary security’ in the graphs below.

The below pie chart illustrates the current primary security levels of all active loans in the Rebs loan book.

* Data is for all loans currently Active and Performing in the Loan Book

70.99% of the current active loan book is secured with more than a personal guarantee, with over 32% currently secured on a legal property charge.

Over time our lender base have asked us to provide them with more property secured lending opportunities, a call we have tried to answer.

* Data takes into account all loans fully funded and accepted over the course of the loan book

The graph below shows the change in percentage of all loans over the years secured by the various primary security types. As you’ll be able to see, the number of loans secured only on a personal guarantee has decreased year on year since 2014, whilst the proportion of loans secured by 2nd charges has increased year on year at a higher rate. This year already, we have secured more of our loan book on 1st and 2nd legal charges than any year prior to it .

Going forward, we will continue to try and source creditworthy businesses backed with higher levels of security.

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