TAB currently has two products available for investment, TAB Lending and TAB Property; both have their own risks and rewards.
With TAB Lending there is a risk that the borrower might not repay the loan, and with TAB Property there is a risk that the tenant might not pay their rent. Payment of capital may be delayed, for example if a borrower repays late. It may also be difficult to sell the property (or your interest in it) at the end of the investment term or if we have to enforce a security. You may receive back less than you invested where the sale takes place at a lower price than was paid initially.
If you are unsure of the risks and whether TAB investments are right for you we recommend that you seek professional advice tailored to your personal circumstances.
Your personal decision to invest
We do not provide investment or tax advice. It is your responsibility to decide whether to make a TAB investment. You must do so solely based on the investment details together with any independent knowledge that you may have and professional advice that you may have received.
The need for diversification
Diversification helps reduce overall risk. Investing in property should only be considered as part of a diverse investment portfolio which contains investments of different kinds and where you do not put too great a proportion of your capital into one particular type of investment.
Your capital is at risk
Your TAB account is an investment account and not a bank or savings account. Returns are not guaranteed and your capital is not protected by the Financial Services Compensation Scheme.
You may not get back any or all or your initial investment. You should not invest any more than you can afford to lose.
TAB Lending and TAB Property investments are linked to real estate and so are influenced by the performance and value of the underlying asset. Property values can fall over the life of the investment. While TAB’s due diligence processes seek to mitigate risks, net proceeds may be insufficient to repay your initial investment where a TAB Lending borrower defaults or TAB Property investment performs poorly. In exceptional circumstances, TAB may consider it in the best interests of TAB Lending investors not to enforce the security, for example where costs outweigh proceeds Should this occur, you will lose all your initial investment.
Interest and income is not guaranteed and payments may vary
TAB Lending: The rate of interest is fixed over the life of the investment but not guaranteed. Borrowers may experience cash flow problems or default. Consequently, there may be periods when your monthly interest will not be paid or will cease completely. Interest will accrue (to be paid at a later date) but may not be recoverable if a borrower defaults. Borrowers may redeem early. This means that you will not receive the anticipated interest for the full term.
TAB Property: The rate of income is fixed each year by the property manager but is not guaranteed. Income streams are based on rent and could be affected by void periods, adverse market conditions and other unforeseen circumstances. Any shortfall will accrue (to be paid at a later date). In such cases, the property manager may adjust the following years’ fixed income rate to pay the previous year’s obligation. Consequently, your overall income return may be lower than expected.
Differing risk profiles
TAB aims to give investors the choice of terms and risk profiles that suit their investment goals and needs. Consequently, individual investments contain different and specific risk factors, which you should consider in full by reading the investment details. These risks relate specifically to the type of investment product and the individual loan or property in which you are investing.
Past performance and forecasts are not reliable indicators
Past performance and forecasts are not reliable indicators of future results and should not be relied on. Any projections of future performance are based on the internal calculations and opinions of TAB and are subject to change at any time without notice.
TAB Lending: Repayment of loans is not certain and borrowers may default. TAB’s due diligence process seeks to mitigate the risks but it can never be eliminated. After consideration of the options, TAB may repossess and sell the secured property. However, the net proceeds after the costs of recovery may be insufficient to repay any or all of your initial investment. The process to repossess and sell a property could be lengthy and so alter the time your money is tied in.
Lack of liquidity and control of exit
Unlike cash held in a bank account or investing in listed securities, TAB investments are highly illiquid. There is currently no active secondary market, you cannot transfer your investment to a third party or otherwise exit your investment early. Once you have invested you are committed for the full term and this means your money is not readily accessible. You should not invest any money that you may need at short notice.
TAB Lending: Loan extensions up to a maximum of 12 months may be granted to borrowers after additional underwriting. You will receive interest during this period. If a loan is in default, the process to repossess and sell a property could be lengthy and so alter the time your money is tied in.
TAB Property: The manager reserves the right to dispose of the property and return net proceeds to investors before the end of the term. This may result in the crystallisation of gains or losses sooner than anticipated. Final distributions may be delayed by the sale or refinancing process. However, you will continue to receive income where net rental income is received by the property manager.
Investments not covered by the Financial Services Compensation Scheme or Financial Ombudsman Service
TAB is not authorised or regulated by the Financial Conduct Authority.
TAB Lending and TAB Property investments are not covered by the Financial Services Compensation Scheme (FSCS). This means that should your investment fail for any reason or should TAB become insolvent, you will not be able to claim compensation. If you have a complaint, you will not be able to refer it to the Financial Ombudsman Service (FOS).
As with any company, there is a risk that TAB may run into operational and/or financial difficulties and cease trading.
A benefit of investing through TAB is that as an investor you never have to deal with borrowers or tenants directly. We do all that for you. TAB holds the security/property in a trust on your behalf. Should TAB cease trading or become insolvent, the trust arrangements mean your interest will be ring-fenced and not applied towards TAB’s creditors. TAB would assist with ensuring an orderly wind-down to minimise any impact on investors.
Payment of additional sums
In exceptional circumstances, TAB may ask investors to provide further funds to assist with the costs of enforcing a loan or support a TAB Property SPV. This would depend on the specific circumstances of the individual investment and with TAB acting in the best interests of all investors.
Please note: as of 14 February 2021 TAB has never required this of investors.
You are responsible for the payment of your own taxes from investing via our platform. Tax treatment is dependent on your individual circumstances and may be subject to change in the future. We do not provide tax advice and you should seek professional advice before investing.
Borrowers or persons acting for borrowers including solicitors and other professional advisors on who TAB and/or its solicitors rely may act fraudulently. TAB and its solicitors will take commercially reasonable steps consistent with industry practice to mitigate the risk of fraud but the risk cannot be completely eliminated.
Funds advanced to us prior to investment are treated by TAB as segregated from money belonging to other TAB entities. We have put the bank on notice of the trust status of these funds. Please note: You will not earn interest on these funds.