This is my preliminary Flender Review and first impressions. Usually, I don’t write reviews before using the P2P platform for at least 6 months. Flender.ie is a rare exception. I decided to share my first impressions and experience after almost 3 months of investing for two reasons. The first one is that the platform looks very promising and offers a very good diversification option in the Baltic dominated P2P market in Europe. The second one is that they offer a really generous 5% signup bonus for new investors, which I doubt will last for long.
What is Flender?
Flender is a P2P lending platform registered in Ireland, which is a rare exception on the European P2P landscape. Even more important is that the platform offers investment opportunities in Irish business loans nominated in Euro.
Flender is a leading marketplace lender for the Irish SME market. Through a combination of P2P funding and institutional investment, Flender is delivering much-needed funding to Irish SMEs quickly and efficiently using its technology platform.
Flender offers loans to SMEs with fast decisions, competitive rates and terms up to 3 years. Loans are very reasonable in size between €15,000 and €150,000. Here is a nice video that presents Flender in under 2 minutes (the numbers shown in it are actual for the end of 2018):
Flender loans have relatively high interest rates (just above 10%), combined with a rigorous credit checking process and careful business selection. The minimum investment is €50 per loan with average annual returns of just above 10% and 12 to 36 months maturity.
Founded in 2015, Flender has loaned almost €10 million to date and has almost 7000 investors. Traditional credit assessment procedures are applied in order to maintain low defaults. As a result of the processes in place, Flender’s expected loss rates are amongst the lowest in the industry. To date, the investors have enjoyed an average 10,3% return and only 0.2% defaults. Flender has practised socially responsible business lending and help for more than 530 new jobs in Ireland. I really appreciate it when P2P platforms do not only lend money but have some positive social impact.
The team looks very strong with a decent experience in finances. I love millennials’ enthusiasm and innovative thinking, but when it comes to business finances and credit scoring, I prefer to see some grey hair or even no hair at all 😉 This is exactly what I see at Flender’s Team page:
I like the team. It is big enough (15 members) and offers a good mix of skills and experience. The track record is already there and the most important thing is that the default ratio is only 0.2%. In my opinion, it means that Flender has a decent scoring model in place.
Flender Review: Pros 👍 and Cons 👎
- Very low default rate – just 0.2% loans are defaulted or non-performing for more than 120 days
- Attractive average returns of 10.4%
- Fast and easy KYC – ID verification in less than 24 hours
- Fast convenient deposit options – SEPA and debit or credit card
- Simple and user-friendly interface – easy to use
- FCA regulated company in the UK – strictest financial regulator in the EU
- Loans are denominated in EUR – no currency risk for Eurozone investors
- Strong team – executive team and advisory board are quite experienced
- No fees for investors – completely fee-free for investors
- Ireland based – geographical and political diversification
- Loans to business – socially responsible lending creating jobs and supporting the economy
- Exposure to Irish business – loans to businesses in a well established European economy
- Small minimum investment – just €50 per loan
- Doesn’t withhold taxes – no deduction from loan returns
- AutoInvest option – very simple to set-up
- No safety net for investors – no buyback guarantee or provision fund
- No secondary market – investments are locked for full loan duration up to 36 months
- Very few investment opportunities – usually 1 to 3 per week
- Relatively young and small platform – about 4-year track record and about 7000 investors
Flender Review: My experience and first impressions
It took me only a few minutes to register and prove my identity to Flender. The user interface is clean and really simple and easy to use. I really like the option to deposit money with credit or debit card, so it gives an opportunity to invest almost instantly. I use my Revolut card for almost all my investments.
Flender offers very handy and easy to use AutoInvest tool called AutoFlend. Instead of checking every day if new investment options have been presented you can use AutoFlend tool that will do the work for you. It is a well-implemented and nice feature, but I actually don’t use it right now.
I prefer manual investing since there is a very limited amount of new loans (usually 1 or 2 per week). I receive an email for each new listed loan and prefer to study each opportunity and decided on the investment amount individually. Each loan is very well described and it usually took me about half an hour to decide how much to invest.
The investing process is very straight-forward and is implemented like a five-step wizard which is very convenient and user-friendly.
The number of loans is low since the Flender rejects about 80% of loan applications. This is very good news for investors. The company is required to have enough cash flow to cover at least 1.5 times the installment of the loan. Each company is assigned a credit rating which also determines the loan interest rate.
In addition to the rough credit check of businesses, all loans provided by Flender are secured with directors’ personal guarantees and a security deposit. So, in the event that a borrower declares bankruptcy, the owners are personally liable for repaying the debt.
Flender Review: The competitors
Most platforms featuring business loans are located in Baltic countries, and fund local businesses. The main competitors are Grupeer (recently registered in Ireland), Crowdestor, Kuetzal, Envestio. They provide higher returns, but are lending to riskier businesses and are not regulated.
Most investors will appreciate the opportunity to lend to Irish business through an Irish company, regulated by FCA UK. Flender’s loans are more conservative on the well-established European market. Combined with a very low default rate, I consider that this P2P platform an excellent choice for investors who want to invest in business loans with lower risk.
Flender provides investors with the opportunity to invest in the Irish loan market. Adding Ireland to your P2P lending portfolio will increase your geographic diversification into a politically and financially stable West European country with high credit rating, low corruption, and well regulated financial markets.
Invest and get 5% bonus for 30 days
As I said at the very beginning one of the reasons to make this review earlier than usual is that currently, Flender offers a very generous 5% signup bonus for the first 30 days of investing. I doubt this offer will last for long.
If you like the platform you may consider joining Flender via this link and get a 5% bonus on all investments for the first 30 days. The bonus is paid immediately after the loan is fully funded and there is no cap.
I really like Flender and I think it may become one of my favorite P2P platforms. If you have questions or already investing in Flender I will be happy to share your opinion in our Facebook group at http://bit.ly/P2PGroupEU.