Crowdstacker
FCA-regulated P2P lending platform offering business lending and property development mezzanine loans with higher-yield, subordinated structures.
General Information
Crowdstacker markets itself as an FCA-regulated peer-to-peer lending platform and has expanded its Property Development Loans (PDLs) line, which has historically been described in industry press as mezzanine lending with second-charge security behind a senior lender.
The mezzanine positioning means Crowdstacker's loans are structurally subordinated to the senior lender, carrying higher risk but also higher potential returns for investors.
How does it work?
Property Development Loans typically "fill the gap" above senior debt, which means higher headline interest rates but structurally subordinated security. Crowdstacker's own blog examples show mezzanine funding at high rates, with examples citing returns of approximately 16% per annum in recent updates.
What do they offer?
Crowdstacker offers a mix of business lending and property development mezzanine loans. Investors should expect higher volatility of outcomes than first-charge senior loans, and recoveries that depend on residual value after the senior lender has been repaid.
The higher headline returns reflect the additional risk inherent in subordinated structures. While the potential yield is attractive, the loss profile in adverse scenarios can be significantly worse than first-charge lending.
Who is it for?
Crowdstacker is designed for sophisticated investors comfortable with mezzanine and second-charge risk and the potential for capital loss. The subordinated nature of the security means that loss severity can be higher than on senior-secured platforms.
Investors considering Crowdstacker should have a clear understanding of capital stack dynamics and be prepared for scenarios where recovery may be limited or zero on individual loans.
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Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice and should not be considered as such. In particular, it does not constitute personal advice — please consult a qualified financial adviser to address your particular personal requirements. Other is not regulated by the Financial Conduct Authority (FCA), its authors are not financial advisers and it is therefore not authorised to offer financial advice. This article is not intended as an offer, invitation or solicitation for the purchase or sale of any investment, nor is its issuance intended to give rise to any other legal relations whatsoever and must not be relied upon for the purposes of any investment decision. The information contained in this article is subject to updating, revision and amendment.
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