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Managing the risks

Peer-to-peer investments involve taking on risk. While we can’t
eliminate the risks, we’ve taken steps to mitigate them.

Understand the risks here.

Conservative loans, secured against property

All loans are secured against property. They are sourced and underwritten by Octopus Real Estate, an experienced lending team.

The maximum loan to value (LTV) ratio, which is a measure of lending risk, is 76%. We feel this gives enough headroom should a property fall in value and there is a need to take charge of it before the loan is repaid.

We do our homework

As you’d expect, Octopus Real Estate only make loans where they’re confident a borrower can repay. They look at three key areas:

1. The asset: conducting thorough due diligence on properties and, where necessary, seeking an independent professional valuation.

2. The borrower: assessing each borrower’s financial health, their credit history and undertaking comprehensive identity and fraud checks.

3. The structure: lending at conservative loan to values and ensuring that the borrower can service the loan based on the income from the property.

We aim to spread your money across many loans

The platform will spread your investment across a number of available loans. Through this diversification we aim to minimise the impact of any one loan on the overall performance of your investment. That’s why we might decide to place your money in a queue if there aren’t enough loans open at a point in time.

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First Loss

The first 5% of every Octopus Choice loan is covered by First Loss, consisting of Octopus and an institutional investor.
You'll get your money back before First Loss and earn your interest first too.

Although non-performing loans typically recover, here’s how it works if the
borrower can’t make their repayments and the capital is recovered by another means:

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1

Your initial investment

We repay as much of your initial investment as we can.

2

First Loss investment

Then as much of the First Loss investment is repaid as possible.

3

Your interest

We then pay as much of your owed interest as we can.

4

First Loss interest

Finally, First Loss will receive any interest owed.

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