Loan Notes are fast becoming the solution to investing in the buoyant UK Property Market. They present a solution
for developers, allowing them to raise the necessary capital, and investors, allowing them to earn high returns in exchange.
Fixed Income Assets have a wide range of Loan Note investment opportunities available to certified investors which offer returns of up to 15% per year. It is important to note that whilst generous returns are offered, Loan Notes are still an affordable way for developers to finance their development projects compared to loans from mainstream banks.
Bank loans are typically harder to obtain due to stricter lending criteria and they would cost between 12% and 18% in interest per year with often only 50% of the required capital provided. In comparison, issuing a Loan Note provides the opportunity
to obtain 100% of the capital required along with the freedom, flexibility and the purchasing power which allow them to stay ahead in a very competitive market.
Additionally, there are plenty of advantages for developers who issue Loan Notes. Loan Note capital can be introduced
when needed and withdrawn which is much simpler than raising equity capital by issuing shares.
For investors, there are big advantages to holding Loan Notes rather than shares, as Loan Note holders rank as creditors
therefore they take some form of security over a Company’s assets, unlike shareholders.
A recent article in The Times dubbed Loan Notes “an easy way to invest in UK property without the hassle of buying a house.”