Publication, Alternative Credit Investor, has reported on Somo's latest achievement granted by 4thWay. Read the full article on their website or below:
"Bridging lender Somo has received a 3/3 Plus rating from 4thWay, a score reserved for those that the lending research agency considers to be 'exceptional.
It is 4thWay's highest possible rating and was awarded after Somo released extensive data to the research firm for the first time.
In the review, 4thWay head of research Neil Faulkner said Somo's approach to mitigating risks when assessing borrowers was "beyond what I'm used to seeing in bridging lending".
4thWay added that the firm's lending processes are "high quality, professional and appropriate for these kinds of loans" and that "its processes centre around looking for a margin of safety in worst-case scenarios and - very important for this kind of lending - a strong and realistic exit strategy for repaying the loan".
Commenting on Somo's key people, Faulkner's review said, "my assessment is that this family business has all of the relevant skills and experience we'd expect to see in property lending and bad-debt recovery. It also has complementary skills, such as relevant legal backgrounds."
The review points out that Somo has a high minimum lending amount, at £5,000 per loan.
Lenders also have to have either invested in more than one unlisted company in the prior two years, have an income of at least £100,000, or savings and assets excluding their home worth £250,000, or have an up-to-date certificate from a regulated financial firm declaring competence to invest.
"The investment in our people and processes has certainly paid off and we're delighted 4thWay considers us an 'exceptional calculated risk-reward balance', Somo founder and chief executive Louis Alexander said."
Read the full 4thWay review here: https://www.4thway.co.uk/candid-opinion/somo-review/
Read more from ACI: Alternative Credit Investor reports on 4thWay Awarding Somo "No. 1 for Financial Health"
About the 4thWay® PLUS ratings
The 4thWay® PLUS Ratings of peer-to-peer lending accounts and IFISAs are intended to be an easy way for individuals who are looking to start lending today to estimate at a glance whether the interest they earn, combined with any safeguards against losses, are sufficient to protect the average lender from losing money from bad debts in recession and property crash scenarios, provided they lend across a basket of rated lending accounts.
The 4thWay® PLUS Ratings are calculated cautiously and have an in-built margin of safety to further increase the chances that lenders will be satisfied with their results.
The 4thWay PLUS Ratings are calculated to tell you under what scenarios the average lender might expect to lose money in a given peer-to-peer lending product, account or IFISA, provided you have spread your money across a lot of loans and P2P lending sites, and you are willing and able to hold onto the loans until they are all repaid.
The 4thWay PLUS Ratings take both the risk and reward into account. This means, on the positive side, it takes into account the interest you have earned (the reward). On the negative side, it looks at the risk of losses after loans go bad, after attempts are made to recover that bad debt, and after payouts from any reserve funds or other protections (so-called “credit enhancements”) that the P2P lending site or IFISA provider offers you.
The 4thWay PLUS Ratings are based on the international Basel tests that banks are required to do, but to a tougher standard. More on the methodology below.
The 4thWay PLUS Ratings are indicators, not guarantees or promises, so please don’t use them without supplementary research.
Categories: Investor News, 4thWay
