P2P lender Initiative Ireland aims to lend €60m in building loans
Peer to peer lender Initiative Ireland has plans to raise €60m ($70m) from its members in order to finance construction loans for 250 new family homes. Members, who will have a minimum investment size of €10,000, will have the ability to tailor their portfolio to match their risk appetite. Members will form part of a private lending syndicate in return for the issued loan and interest income, with returns of between 3.5% and 7.5% APR for committed funds.

Eoghan Murphy, Minister for Housing, Planning and Local Government, and Padraig Rushe, chief executive of Initiative Ireland. Photograph: Maxwell

Peer-to-peer lender Initiative Ireland hopes to raise €60 million from members with the aim of financing construction loans.

The fintech startup said on Wednesday that the platform, scheduled to launch in September, could facilitate the building of 250 new family homes over the next 18 months if it raises €60 million.

The firm also said it hopes to create 50 jobs over the next five years.

The way the company works is that members will become part of a private lending syndicate in return for the issued loan and interest income.

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According to the company, the members can tailor their loan portfolio in line with their own risk-reward appetite, choosing which pre-approved loans to fund and opting to finance senior or subordinate debt to achieve their financial goals. Private syndicate members can earn between 3.5 per cent and 7.5 per cent APR for their committed funds.

Minimum loan

All loans are professionally managed by the company and members must commit to a minimum loan of €10,000.

Welcoming the announcement, Eoghan Murphy, minister for Housing, Planning and Local Government, said: "Addressing the housing crisis requires innovation and initiative. It is great to see Irish firms, like Initiative Ireland, responding to the market need with new, sustainable solutions.

“I welcome their goal of making finance available at affordable rates to smaller developers, which is a necessary component if we want to see the activation of dormant sites.”

Padraig Rushe, the company's chief executive, said that the initiative will offer competitive returns to company members.

“We have designed our offering to support additional, small developments across the country, with the expectation of financing the construction of a further 250 to 500 new homes per annum starting in 2019.

‘Affordable pricing’

“Our affordable pricing is designed to activate dormant sites, and as such this additional lending is expected to deliver a further 600 to 1,200 additional construction jobs in 2019, in addition to 50 new jobs to be created in the company, over the next five years,” he said.

All loans are secured with a first lien, a form of debt that has priority in payment in the event of a company’s liquidation, and must have a clearly defined exit strategy.

In Initiative Ireland’s case, the company focuses on financing construction of quality family homes in high-demand residential areas across Ireland.