April P2P Lending Platform News Round-up

Totals lent to date (10th April 2019)

*All data correct at the time this blog was compiled.

LOANS TO BUSINESSES

Assetz Capital - £769,500,000

Crowd2Fund - £27,010,000
Funding Circle - £4,600,000,000
FundingSecure - £303,570,210
Money & Co - £6 million approx
Rebuildingsociety - £15,200,000
ThinCats - £443,539,000
Invest and Fund - £60 million
LendingCrowd - £56,520,716
ArchOver - £95,986,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £164,038,945

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £769,500,000 - £4 million growth (0.54%) in the past fortnight.

When this blog was compiled, there were 97 loans in the pipeline with 2 imminently due to be drawndown.

Highlighted Loan: Borrowers requested £125k to help fund the purchase of a Buy to Let flat in the South East. Although currently vacant, the rental income is expected to cover the interest only repayments with the borrower and his wife having enough disposable income to cover these commitments if there are delays in finding tenants. My concern was that there appeared to be no firm plan of action for the conclusion of the 2 year term. The loan might be refinanced, the property could be sold or the borrower may repay the capital from their own funds. I suppose this gives lots of options but I would prefer a definitive strategy especially as the LTV was quite high at 67.8%.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across different sections of the platform's portfolio and are covered by a discretionary Provision Fund (the target rates of return are in brackets):

Quick Access Account (4.1% pa)

30 Day Access Account (5.1% pa)

90 Day Access Account (5.75% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Crowd2Fund

Lent to Date: £27.01 million.

Since the last blog, I have received 4 email notifications about new auctions launching on the site.

Highlighted Loan: Providers of training in the healthcare sphere requested £96k as they look to finance the development of distance e-Learning products. The most recent Profit and Net Assets figures more than covered the amount being borrowed. Investors were offered a healthy 12% apr return for this 2 year loan.

Funding Circle

Lent to Date: £4.6 billion

Funding Circle are unique amongst the major P2P platforms that lend to SMEs in not allowing investors to choose who they lend to. Instead two managed accounts are offered which distribute funds across differing risk profiles of loans within their portfolio. These options are projected to offer returns in the ranges of 4.9% - 5.2% pa and 5.5% - 6.5% pa.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site express concerns over the apparent lack of due diligence that is undertaken although Funding Circle's pursuit of bad debt is reportedly better than any other platform.

Platform News: Funding Circle has decided to close down its Investment Trust ahead of announcing other ways in which institutions can invest in its portfolio of loans to SMEs. These are likely to include a private direct lending fund and bonds.

FundingSecure

Lent to Date: £303,570,210 at end of March – monthly increase of £3,134,601 (1.04%).

When this blog was compiled there were 3 auctions taking place.

Highlighted Loan: A request to renew a £20k loan secured against a Dutch Barge was listed recently. This seems to be something of an "old friend" as it was first listed 4 years ago when the amount raised was only £15k leading me to wonder will the borrower ever be able to pay off the capital. The barge was valued at £30k providing an LTV of 66.7% however the description advises that the vessel was last surveyed in May 2014 so I would be very wary of the accuracy of that valuation. Although the maximum loan part available for the first 24 hours was £25 with a return of 12% pa, I had no inclination to get involved.

Defaults: The loan secured against a power boat still has not been paid. There are now threats of court action being taken.

Platform News: On its larger loans, FundingSecure will introduce a minimum bid amount because it wants to increase investors' cautiousness and encourage them to undertake detailed due diligence. Clearly, the platform believes these loans to be riskier thus it seems odd that people are being "forced" to allocate larger sums than they would wish to.

Money & Co

Lent to Date: £6 million approx. (latest available figure)

There was 1 auction taking place when this blog was compiled, this was a £250k loan to a German Property Developer. This was the twentieth tranche of funding to this borrower who appears to have been the site's only customer since the Summer of 2018. Investors were offered a return of 8% pa even though no financial information was provided.

rebuildingsociety

Lent to Date: £15,200,000.

There were 5 auctions taking place when this blog was compiled.

Highlighted Loan: Construction company requested £106.2k to provide Working Capital for a project to convert residential apartments into an office complex. ReBS loans are often at the risky end of the spectrum however, in this case, the borrower's home was valued at £600k with no other charges. With such a low LTV the return of 10% pa looked very good and I was happy to invest.

ThinCats

Lent to Date: £443,539,000.

Once again there were 0 auctions taking place when this blog was compiled – it seems to have been a very quiet start to the year on this platform, for retail investors at least.

Invest & Fund

Lent to Date: £60 million – latest figures

There was 1 auction taking place when this blog was compiled.

Highlighted Loan: Property Developers from the Midlands requested their second <£96k tranche from a £1.343 million facility to convert offices into 11 apartments. This was the first opportunity retail investors had to get involved in this offering because the first tranche had been fully funded by an institution. The initial LTV was 51% rising to 61% on completion of the project. Investors were offered a return of 7% pa.

LendingCrowd

Lent to Date: £56,520,716 – increase of £1,046,580 (1.89%) in the past fortnight.

On the morning this blog was compiled, 3 auctions were listed.

Highlighted Loan: Undertakers requested >£16k to cover an upcoming tax bill. Although they had the funds to cover it, they wished to maintain their current levels of Working Capital. There was no indication that the HMRC payment was a one-off situation and, with the loan having a 36 month term, if that is not the case I wondered how they intended to cover this outgoing over the next few years. The financial information suggested this was a business on a downward spiral and so the average rate of return of 11.16% pa was not enough to tempt me when I reviewed this offering.

ArchOver

Lent to Date: £95,986,000.

There were 4 auctions taking place when this blog was compiled.

Highlighted Loan: A construction company were looking to refinance £350k of their £1.7 million facility with ArchOver which has been used as Working Capital to facilitate a number of multi-million pound projects. Security was provided by a charge over future income and the loan was insured by HCC who are A1 rated by Moody's. As a result, 7.7% pa seemed to be a fair return.

CapitalRise

Lent to Date: £25 million approx. (latest available figure)

Highlighted Loan: The first £0.89 million tranche of a £2.1 million facility to build a 5-bedroom luxury home west of London is 95% funded at the time of writing. Construction work is due to complete part-way through the 21 month term giving time for the sales process to complete and repay the loan. Should this not take place then refinancing will take place via bridging capital. The LTV was 66% and a return of 8.5% pa was offered.

Platform News: CapitalRise's round of equity funding via the Seedrs platform has now closed. Their goal was to raise £1.5 million but that target was exceeded by £700k.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.1 billion – latest figure available.

Returns: Interest rates are set according to supply and demand. They currently range from 3.7% pa to 5.0% pa depending on the length of the investment. These figures have converged in the past fortnight as the lower rate has increased by 0.6% and the higher one reduced by 1.1%.

Capital is covered by a Provision Fund. Ratesetter proudly boast that no investor has lost a penny since they launched in 2010.

Platform News: In just over a year more than £200 million has been invested in the Ratesetter IFISA making it the most popular tax free investment of this nature on the market (the platform claims).

Lending Works

Lent to Date: £164,038,945 – an increase of £2,672,698 in the past fortnight – 1.66% growth.

Returns: 5.0% pa and 6.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. These rates have been locked until 5th May to avoid volatility during the busiest time for IFISAs.

As well as a Provision Fund to cover investor's risks, this site also insures borrowers against redundancy, fraud, illness and accidents making this a very fair site for all concerned.

****Disclaimer: This blog contains the views of the Secret Investor. Your capital is at risk when lending via all P2P Platforms. You're recommended to speak to a qualified Independent Financial Advisor.