Borrower - Frequently Asked Questions
Capitalstackers Ltd is the company set up to create and manage the CapitalStackers platform. It is owned by people with a breadth of experience in real estate finance. A key shareholder is Hallidays Chartered Accountants and directors of Hallidays also sit on the board of CapitalStackers.
Capitalstackers Trustees Ltd ("CTL") acts as security trustee on all deals entered into by the investors. The board of CTL is controlled by Hallidays directors. The security you grant will be in favour of CTL as security trustee for your lending investors.
The purpose of CapitalStackers is to bring together borrowers (generally those seeking a higher level of funding than is offered by the banks) and investors seeking a better rate of return on their money than is available elsewhere.
Yes. CapitalStackers is authorised and regulated by the FCA to operate its loan-based crowdfunding platform.
The CapitalStackers team understand real estate lending and we fill an important gap in the real estate finance market. Whether or not you already have access to senior debt funding, we can help structure your proposal to ensure it has the best chance of attracting investors. Our fees are competitive and we have access to a wide range of contacts across the real estate industry.
You must be experienced in real estate and have a sensible funding requirement. Assuming you have equity available to support the deal, that the proposal meets our lending criteria and an appropriate pricing structure can be agreed, CapitalStackers will produce a report detailing the key elements of the transaction for inclusion on the website. Prior to you being accepted as a borrower, the usual Know Your Customer (KYC) checks will need to be concluded.
There are no minimum or maximum criteria although the pricing associated with listing a deal less than £250,000 may make the borrowing costs unattractive. We do not undertake any lending activity which is regulated under Consumer Credit legislation.
Yes. Individuals, partnerships, companies, LLPs and pension funds may seek funding through CapitalStackers subject to the funding request falling outside Consumer Credit legislation.
None. Investors remain anonymous throughout the process.
No. We have contacts within and are happy to work alongside all the major high street lenders. We can advise you on the most appropriate debt structures and can help source the senior debt funding on your behalf, advising you on the senior terms and conditions as appropriate. If your senior debt funding has already been arranged, we will work with your appointed lender in agreeing appropriate security and documentation arrangements.
Fees are negotiated on each deal appropriate to the risk and are covered in the Borrower Fees and Interest section of the CapitalStackers website.
The interest rate (coupon) you pay will be agreed with you at the outset and is fixed until maturity (assuming there are no subsequent variations to the deal). You pay a fixed rate and the lending investors receive a fixed rate for the duration of the loan.
These will be discussed and agreed with you at the outset. Other fees will include all third party costs (valuation, legal, etc) plus a fee for arranging and advising on the senior debt should you ask us to do that.
This will be discussed at the outset but will depend (amongst other things) upon the size and complexity of the transaction, whether senior debt has already been agreed, legal and valuation issues and the nature and extent of due diligence that will be required. As far as fund raising from investors through our Primary Market is concerned, we anticipate the process will take approximately two weeks. Quicker for smaller, lower risk deals and possibly longer for more complex larger deals.
Again something to be discussed at the outset. Whilst not prescriptive, it is anticipated that you will be contributing a minimum of 15% of total costs in advance of the drawing of any CapitalStackers funding. This could be by way of cash equity or the injection of land or property. It is important that the investor group see you injecting a meaningful stake into the deal.
You will have access to the deal room and full visibility of the auction process. We will keep you advised of key milestones.
Should demand for your deal fall short of your required target, we will discuss the position with you and explore an alternative strategy. For example, you might offer a slightly higher coupon to attract more investors or temporarily contribute additional equity. The additional equity could be injected as a loan participation and liquidated over a period in the secondary market.
Each scheme will be individually structured and all will have a set maturity date. Development loans will roll up interest. Investment loans will call for interest to be paid quarterly with, in some circumstances, capital repayments. The option to repay loans early is available but may be subject to an early redemption fee.
This would inevitably require detailed discussion between you, the senior lender and ourselves. Any remedial action or restructuring arising from a breach of loan covenant will require the consent of the CapitalStackers investors.
Professionals will be appointed by Capitalstackers Trustees Ltd (as security trustee). This appointment will be arranged through CapitalStackers under the service agreement. CapitalStackers' legal work is undertaken by Taylors, a highly regarded firm of Manchester lawyers who have agreed a service contract with CapitalStackers for the provision of legal documentation and advice. The CapitalStackers team have strong relationships with a wide range of property advisers and valuers. Other specialist advisers will be appointed as required. We will agree fee arrangements with you prior to instruction.
CapitalStackers will be required to provide regular reports to the investors (monthly for developments, quarterly for investment loans). This will necessitate frequent discussions with you and for you to provide information relevant to the deal. The type and frequency of this information will be deal specific and usually detailed at the outset.