Based on my own lending experience with a smaller UK Peer to Peer Lender offering pawn-shop style loans to consumers and businesses.
– Review Updated December 2018
Unbolted is a smaller size UK Peer to Peer Lender. Providing pawn shop-style loans on everything from gold to Rolex watches and imported art. Offering returns upwards of 9% return on investment. Unbolted have a unique spin on Peer to Peer lending. Capital is loaned against various Items which are sent to Unbolted and stored at their premises as asset security. Generally smaller, valuable items such as gold or diamonds which are easy to sell. This means when loans default, capital can be recovered quickly. They do also lend against larger, more valuable items such as collector cars, however these types of items tend to be the exception rather than the rule. They have also started providing bridging and small business loans secured by business assets and Director guarantees.
My experience with Unbolted has been mixed so far. Although they are a viable investment option for very reasonable returns, lending out larger amounts of capital can take a long time, and cash drag can really eat into returns. My Unbolted account is currently very small. I had sent over 5 times my current balance, however after a couple of months I withdrew and redistributed elsewhere as it most of it was still in my holding account earning nothing.
My Actual Account Growth & Income
See consolidated returns for all lenders here
The Obvious Investor – Easy-Info Table
Overall Rating*: (3.4 / 5) Who can invest: Estimated Return: 6% to 9.8% My Actual Return (Per Lender): 8.40% My Calculated XIRR: 6.83% Risk Rating*: 5/10 - Low to Medium Early Exit: No. Min. Investment: £5 Deposit Funds: By bank transfer. Usually takes 24 - 48 hours for BACS.
Can be same day for Faster payments.
Auto Invest: Yes Manual Invest: Yes Lending To: Agreements directly with borrowers Loan Types: Pawn Shop Loans. Bridging Loans.
Pre-Auction Financing. Small Business Loans.
Default Rates: Not Published. Loans Amortize: No. Loan Security: Yes, some. Pawn Shop Items with Good LTV's (<75%).
Business loans secured by assets or
Provision Fund: Yes. Discretionary Gold Provision Fund and Provision Trust.
Time to Invest: Long, Very Slow. Time to Mange: None (Auto-Invest).
Lender Fees: No. Payments Received: Interest and Capital Received Monthly. Amount Lent: Not Published. Number of Investors: Not Published. Loan/Dflt Stats: Not Published. Regulated: Yes: FCA Location: London, UK Launched: November 2014 Website: www.unbolted.com Email: [email protected] Telephone: 0203 5671300 (UK) IFISA/IRA: No Cashback**: No How to Sign Up**: Sign Up Here!
Unbolted’s Peer to Peer business was launched in November 2014 in London UK. Unbolted do not publish their lending figures as far as amounts lent out so I am unable to publish that information for this lender. Their last filed financial accounts are publicly available from Companies House. Balance sheet for 2017 below.
Unbolted (AKA Open Access Finance Ltd.) are regulated by the UK’s Financial Conduct Authority (FCA) with full permissions under FCA number 741896. They gained FCA permissions in June, 2017. It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme), so capital is not protected as it would be in a bank.
Opening an account with Unbolted is fairly easy. Just the usual ID and anti-money laundering checks. If they can verify you though one of the UK’s credit agencies, you may be approved immediately. If not, you may need to send them a copy of your passport or driving license, and a utility bill or bank statement. Any resident of the UK who is 18 years old or over can signup with Unbolted if they can pass the ID checks & anti-money laundering checks. A UK bank account is also required to signup.
Deposits & Withdrawals
Deposits and withdrawals are made by bank transfer from a UK bank. Deposits usually show up in your account the same or next working day. Withdrawals can typically take 1 – 2 business days.
The deposit and withdrawal screens are very simple. Just Unbolted bank details for transfer in, and amount for transfer out. Note: there is no confirmation after the withdrawal screen. Hit submit and it’s happening.
Time to Become Invested
Unbolted has both auto-invest and manual-invest accounts. In the manual-invest accounts, it’s very difficult to get good diversification as the loans are taken very quickly by manual investors, and there are not many of them. Auto-lend is what most investors do I believe, so I just get in line with everyone else and let the auto-invest do it’s job. Unfortunately as mentioned previously, lending out capital can take time with Unbolted, weeks or even months for larger amounts. This is one of the reasons my lending account with them remains very small. I may increase it a little moving forward but it will be in small chunks to see how much I can keep invested at one time.
Who are we lending to?
Unbolted is a true Peer to Peer Platform. Lenders are lending directly to borrowers who are typically consumers or small to medium size British businesses (bridging loans against business assets are available). Loan agreements are directly between the lender and the borrower. Unbolted just acts as a middle man, managing loans, payments and debt collection etc.
Unbolted provide pawn shop-style loans secured with assets, typically with LTV’s of less than 75%. Gold, jewelry, art, antiques, pretty much anything that would historically have been taken to a pawn shop. They also provide Sale Advance Loans, where they loan up to 50% of an items reserve auction value, Bid Now – Pay Later Loans, and business loans secured by company stock and/or Director personal guarantees:
Here is a list of a few of my current loans:
As you drill down into the loan information, it is easy to see the details on each individual loans.
Unfortunately, that is all of the information available on the asset. No pictures or further information, so even if you were an expert on asset valuation, it would be difficult to make educated lending decisions in the manual lending account. Personally I just use the auto-invest account and make sure the capital is well diversified.
Most of Unbolted loans do not amortize, as the loan terms are short (3 – 12 months typically), capital and interest are paid back at the end of the loan term, or the loans are sometimes renewed for another period. You can see on the screenshot below, both principle and interest are being repaid at the end of the loans.
Selling Loans and Withdrawing Capital
There is no early exit available with Unbolted loans, so once you make an investment, you are in for the duration. Loans are typically 3 to 12 months though so you should be able to get most of your capital out within that time period if you set your auto-reinvest option to “off”.
Auto-Invest loans are diversified automatically when you initially invest with Unbolted. Capital is spread between available loans in each loan portfolio. In the auto-invest section of the website, you can set the amounts you want to invest in any single loan, and loan type. As you can see from the screenshot below, I have my investment set to £25. That doesn’t mean £25 is the amount that will be lent, it is the maximum. I find that typically just £5 per loan gets allocated out, so here you can see why it’s difficult to get much money lent.
As you can see in the screenshot above, there are 2 types of provision fund with Unbolted. The first is a gold trust fund which protects lenders against a possible fall in the price of a gold-based asset such as jewelry or gold watches. The second provision fund is called the “Provision Trust” and typically covers regular non-gold pawn type items. Bespoke loans are typically business type bridging loans, or auction financing loans are these are not covered by a provision fund but are usually secured by assets with a reasonable LTV. On the downside, it’s important to note that both of these provision funds are discretionary, meaning it is Unbolted’s decision as to if the funds should pay out or not, so getting your capital back from a default is not guaranteed, even if it is covered by the funds.
No retirement account options with Unbolted yet.
Unbolted’s website is very basic and easy to use. It really only gives a few options. Buy manual loans, or set auto-lend options. Add or withdraw funds. Frankly it’s one of the less-impressive interfaces, but I guess it does the job. The screenshots shown previously in the review, plus the one below are pretty much all that there are, so at least you won’t get lost 🙂
Overall I think Unbolted are a good option for diversification with small amounts of capital. Lending on pawn items that are easy to sell upon default has its place when you have loans on property that can take months or years to sell if defaulted. I do intend to add more capital to my Unbolted account to see how the lending goes, however it will only be in small chunks for now and will unlikely ever become a significant part of my portfolio.
Thumbs Up Points for Unbolted
Good Returns – returns of 6% – 10% on secured, easily salable assets with provision funds is certainly nothing to sniff at. Considering some larger lenders are offering only 4% on non-secured assets, with no provision fund.
Easily Salable Assets – secured with good loan-to-value numbers, which means that in the event of a default investors should be able to recover most of their investment relativity quickly.
Auto-Invest – I really don’t see any other way to invest with Unbolted, and once you’re invested, it really is a hands-off investment.
Diversification – with the auto-invest account, Unbolted does a good job of spreading your investment over as many loans as possible based on your lending settings.
Low minimum investment – The minimum investment and you can put in to any loan type is £5, so if you don’t have a lot of money to lend, you can still invest with Unbolted.
Good Default Recovery – Unbolted have a good history of recovering on defaults, which is good to know when things go bad.
Provision funds – Gold & Provision Trust funds cover many of the loans, so when defaults occur, it shouldn’t affect your account too much, however they are discretionary.
Financial Conduct Authority (FCA) Regulated.
Thumbs Down Points for Unbolted
Smaller Company – with shorter track record, launched in 2014, Unbolted haven’t had to deal with a financial crisis yet, so we won’t know how they fair until the next one. They do seem to be sticking with what they know though so hopefully they will prevail.
No Early Exit – No secondary market to sell loans, so once you invest, you’re in for the duration. Most loans are for 6 months or less though, so it’s not too long to wait to get your capital back.
Cash Drag – larger sums can take a long time to become invested, so cash can sit un-lent making no returns for weeks or months.
Smaller Loan Book – This is really just a function of the last bullet point, not many loans with too many investors trying to get them.
Manual Investing – really not an option unless you’re willing to put a lot of your eggs in very few baskets
Asset Information – not much information at all on the assets you’re lending on, making manual investing even more difficult.
Discretionary Provision Funds – which means there is no guarantee of a payout when default occurs. Management decides when the funds pay out.
Basic Website – although easy to use, the Unbolted website doesn’t give much versatility for choosing loans and automating investments.
Risk Factor – 5/10 – Medium
I consider Unbolted to be in the middle area of the risk scale. Even taking in to consideration that loans are asset secured, they are still a small company with minimal trading history.
Who Can Invest with Unbolted
UK residents with a U.K. bank account can invest with Unbolted. Contact Unbolted for further information.
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* My opinions on ratings and risk rating factors refer to my personal experiences with a company or account. Including factual data such as interest rates, loan types, security, platform history, default numbers etc.
** I may be an investor with any company on this site (I only review companies I invest with so I can provide an honest evaluation based on my own experience & actual returns). If you click on an affiliate link, I may receive a small commission, at absolutely no cost to you. It helps me to run this website and continue to offer new reviews and updates.
Please read my Disclaimer before making investment decisions.