How auctions work
All auctions are operated on a ‘reverse auction’ basis. This means that those bids with the lowest interest rates are those which form the final loan to the borrower.
Before you bid
You will be able to read about each business or project, the background of the people behind the borrower, the purpose of the loan and relevant financial information. You can also put questions directly to the borrower – the Q&As are available for all registered investors to see.
Every borrower commits in advance to accepting a filled loan – providing that the collective average interest rate does not exceed an agreed maximum (known as the Reserve Rate).
During the auction
As an investor, you can place bids during the auction period – choosing how much to invest and at what interest rate. You can place as many different bids as you wish. Please note: you cannot withdraw a bid. When you place a bid, you are asked to confirm your intention to purchase the loan part if your bid is successful.
Each auction typically runs for 7 days – though this can vary. For example, it could be extended to accommodate a bank holiday, or closed early if the borrower has already fully funded their loan at a rate they are happy with. These auctions will be clearly highlighted.
It is usually in the borrower’s best interest to let the auction run for its full period, to ensure they will get the lowest rate.
During the auction, you may be outbid by other investors prepared to accept a lower interest rate. If this happens, we can send you an email to let you know and give you the opportunity to improve your bid if you should wish to. You will need to adjust your communications preferences to allow these email notifications.
Please note: you can invest in any live auction, even if it is fully funded. The “100% funded” statement simply shows that investor interest covers the whole amount of the loan. To invest in this loan successfully, you will need to offer an interest rate lower than the highest existing bid.
After the auction
When the auction ends, the funds are paid to the borrower and the auction then becomes a live loan. This will be indicated on your statement and you will also receive an email confirmation for each successful bid. Once the auction becomes a live loan, you are free to offer loan parts for sale through our Marketplace.