Crowd Bonds

With conventional bond yields at record lows, more people are looking at alternative sources of income. Crowd Bonds pay a fixed rate of interest and are repaid on a predetermined date. They are typically issued by smaller, unquoted companies but are secured against specific assets.

What are Crowd Bonds?

These bonds pay a fixed rate of interest and are repaid on a predetermined date (usually after 1-3 years). They are made available via crowdfunding platforms. There is no secondary market and so the bonds are not readily realisable.

To date, the bond issuing companies have ranged from country pubs and care homes to sustainable energy projects, such as solar farms, hydro power and anaerobic digestion plants.

What are the risks?

These bonds are not covered by the Financial Services Compensation Scheme (FSCS). They are typically issued by smaller, unquoted companies but are secured against specific assets, often by property.

The loan-to-value rate (LTV) is an important indicator – the lower the LTV, the better. Higher yields should usually be taken as an indicator of higher risks. We recommend that investors diversify their risk by spreading their commitment across at least 8 issues.

The EQ introducer service

EQ is offering an introducer service, initially to bonds issued by Downing via its crowdfunding platform, Downing Crowd. Downing is a long-established investment manager, regulated by the FCA. Downing acts as the arranger and security trustee for the bonds, and brings more than 20 years’ investment management experience to these crowdfunding opportunities.

We have chosen to launch our service with Downing based on their track record, and because their fee is contingent on investors’ capital and interest being paid in full. This means they have an incentive to carry out rigorous due diligence and ensure that the bonds are repaid when due.

Current offers available for investment

Project Asset backed Term Annual interest Expected closing date Minimum investment Raising Further details
Downing Data Centre (Birmingham) Bond Yes 23 months 5.00% p.a. Closed £100 £2.8 million Register for full information

How to invest

Please click on the link below to create an account and start investing with Downing. We will receive a small commission for these investments paid to us by Downing (which does not affect your return).

Please note: we are not offering advice on the selection of the bonds and the decision as to whether they are suitable is entirely down to you.