A Verto Homes development has defaulted yet again on its overdue Funding Circle loans - you were warned.

Funding Circle loans to develop Towan Heights in Newquay - a development featured in the recent Crowdcube £1.6m equity raise by Verto Homes, are looking decidedly dodgy

Yet another ultimatum deadline has passed and still the loans are unpaid. As we have reported before here, investors who loaned to this development are up in arms at the way this company has stretched the truth about when payment would be made. The stretching continues.

Whilst the loans were not taken out by Verto Homes directly, Towan Heights LLP is the borrower and it was set up by the same two directors as Verto Homes and has them as members. The Towan Heights development was the main image used to sell the Verto Homes equity on the Crowdcube pitch. Verto Homes claimed in this Crowdcube pitch that they were Funding Circle's main client. 

Join the dots. 

Also, as we have said here before, we are simply amazed that Crowdcube did not think it necessary to flag up this connection and the late repayment - which was due back in May, so before the Verto Homes Crowdcube pitch went public. 

If we had not mentioned it here and pushed for it to be brought to the Crowdcube forum - no one would be any the wiser. When asked about it on the Crowdcube pitch, the VH directors brushed it aside as irrelevant - not their loan they said. Really?

There is at least one other Verto Homes' development which has FC loans and the talk amongst those who are owed money via these loans, is of legal action. It also seems highly likely, given the bad PR this has created, that VH have seen the end of their FC relationship.  Now how can that not be entirely relevant for people investing in VH?

Crowdcube investors have a few more days to decide if they really want to give their money to Verto Homes - so we hope to god they read this beforehand. Fine if you then are happy but you should really have this information in front of you.  

Smoke and Mirrors at Funding Circle should ring alarm bells for deal on Crowdcube

The Towan Heigths development in Newquay, which was at least part owned by Verto Homes until May 2016, has received a lot of flack from investors on Funding Circle.

The various loans were due for repayment several months ago and Funding Circle have been working very hard to bat away questions from increasingly irritated.investors. These investors were told all 14 units had been sold, but a post just yesterday states that only 9 have completed the 'legal stage'. A promise of a repayment of almost £1m yesterday seems to have come and gone without any money changing hands. 

Meanwhile over on Crowdcube, Verto Homes, who were partners in Towan Heights, have raised £1.5m via equity sales - the amount almost to the letter that Towan Heights owes FC investors. None of this information is mentioned in the Crowdcube pitch.

A description of Verto Homes and its borrowing from Funding Circle (their words not ours) is here on the FC site. This also refers to a new development at Hilgrove Mews - another Verto Homes development. According to Hilgrove Mews Ltd, they have two outstanding charges with FC. Hilgrove Mew's only two directors are the same two founders raising money on Crowdcube for Verto Homes. 

Investors on FC are now referring to the guys behind the Towan Heights development in less than glowing terms. These are the same guys behind Crowdcube's Verto Homes. The forum on this topic is now on page 8 and shows no sign of slowing down - its well worth a read here. In what seems a confusing trail of paperwork Verto Homes ceased being a member of Towan Heights LLP two months ago but the two main directors of Verto Homes signed up as members on the same date. The main picture used to promote Verto Homes Ltd on the Crowdcube pitch is of the Towan Heights development.

Meanwhile in an equally confusing move, Verto Homes have applied for EIS tax relief on the basis that they are not developers. Kevin McCloud's HAB Housing managed to obtain EIS way back in 2014 when they raised money on Crowdcube, again by claiming the developments were not theirs directly. Verto's opening line in their pitch adds to the confusion -

''Verto Homes designs, builds and sells intelligent, sustainable homes,.............''

The problem being that if these companies transgress any of the EIS rules before they give investors a ROI, HMRC will pounce and the tax relief and all interest will be due back in full.  At the date of writing EIS had not been granted to Verto Homes. It maybe that HMRC are beginning to wake up to the holes the policy suffers from. 

The new new deadline for the loan repayments by Towan Heights is the 12 August, which is 2 days after the Crowdcube pitch has closed. Towan have said that an undisclosed third party will fund the shortfall if the properties are not paid for by the 12th. The Crowdcube money would not be available until sometime later so there is no suggestion this is being used directly.

The same crew that are late with Towan Heights were also late with repaying another property related loan via FC. Investors on the forum are now talking about boycotting this company in the future. FC have as yet declined to comment when asked if they would take more business from them. According to the Crowdcube pitch, this company, in whichever guise they appear, is FC's largest client - so you can see why FC are being so cautious about the way this is all handled. Caution, in this case, is not working. 

Just imagine if FC decided not to continue doing business with these guys or when they tried to launch new loans, FC investors refused to fund them. This could have a material impact on the way the company Verto Homes develops and therefore on the shareholders currently oblivious to the Towan Heights saga.

Well now they know. Happy to be doing Crowdcube's job for them.