August P2P Lending Platform News Round-up

Totals lent to date (7th August 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £849,100,000

Crowd2Fund - £31,480,000
Funding Circle - £5.4 billion
FundingSecure - £309,544,744
Money & Co - £6 million approx
Rebuildingsociety - £15,800,000
ThinCats - £503,183,000
Invest and Fund - £60 million
LendingCrowd - £63,594,316
ArchOver - £105,371,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.3 billion

Lending Works - £186,925,448

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £849,100,000 - £25.3 million (3.07%) since the last blog.

When this blog was compiled, there were 113 loans in the pipeline with 0 imminently due to be drawndown as Assetz Capital's pipeline continues to expand.

Highlighted Loan: Borrowers from the East Midlands requested £225k to purchase the premises from which their e-Cigarette business operates. Security was provided by the shop plus two buy to let properties which gave a combined LTV of just under 60%. The term was for 5 years, amortised over 20, with the expectation that refinance would occur at the end of the AC loan when the LTV would be around 50%. A return of 6% pa was offered which is about the norm for this site.

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)

Platform News: For a limited time period, Assetz Capital are offering £100 to those who refer a friend to the platform – an increase of £75. The friend has to invest a minimum of £1,000 within 60 days and, if they keep it invested for at least 12 months, they also get a bonus of £50.

Crowd2Fund

Lent to Date: £31.48 million.

Since the last blog, I have received 11 email notifications about new auctions launching on the site.

Highlighted Loan: Independent retailers of items for babies were looking for £75k to provide funds to open a new showroom and launch their own range of toys. They have doubled their profits in the past 12 months and they are now slightly more than the amount being borrowed, the most recent Net Assets were also well over £200k. This looked like a good deal for a return of 11.5% pa although there was a risk that the toys would fail to sell.

Funding Circle

Lent to Date: £5.4 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. At the moment, these options are projected to offer returns in the ranges of 4.3% - 4.7% pa and 4.5% - 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 have expressed concerns over the apparent lack of due diligence that is undertaken however in its latest update to shareholders, Funding Circle advise that they are lowering their growth forecast due to them tightening their criteria for accepting higher risk loans – as a resulted of this, the projected rates of return were maintained at the same level in their most recent quarterly review.

Further concerns are being expressed about the liquidity of the site as the amount of time required to sell loans has been increasing according to those posting on forums.

FundingSecure

Lent to Date: £309,544,744 at end of June – figure updated monthly.

When this blog was compiled there were 5 auctions taking place.

Highlighted Loan: An International Businessman requested £80k to provide cash-flow for a project that is due to complete in 3 or 4 months at which point the loan is expected to be repaid. The loan was secured against a house in Essex but only via a Second Charge. The LTV for the 2 charges combined was 54.49%. The strange thing about this loan was that the proposal described the borrower as someone who was involved in many multi-million pound projects so it seems strange that they needed a comparatively small amount and were paying a high rate of return – investors were offered 12% pa.

Defaults: Another fortnight without much news... a few reports of buyers expressing interest in properties held as security but updates relating to other loans advised of potential purchasers drifting away.

Money & Co

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

There were 0 auctions taking place when this blog was compiled. The twenty-third tranche of funding (for £250k) to a Germany Property Developer was finally funded a week last Friday after more than 7 weeks.

rebuildingsociety

Lent to Date: £15,800,000 latest figure available.

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

Highlighted Loan: A Construction and Building Maintenance Company from Yorkshire requested £52.5k. They are quite a large operation with 92 employees who have skills that cover a wide range of trades. The business has got into difficulties recently after it branched out into investment properties. This was initially done in conjunction with their bank but when they withdrew support, far more expensive borrowing had to be employed which impacted on profits. Something didn't add up here, the amount being borrowed is a small fraction of their £9 million turnover and ReBS offer the highest returns of any P2P site so this is not the place to come for cheap loans – investors were offered a return of just under 20% pa. The company also had £184k of debt outstanding over at FundingCircle. This borrower just looked to be digging themselves deeper into trouble.

Platform News: The ReBuildingSociety website has been given a fresh new look. It is far easier on the eye. The content is not much different although there is one important change to the Secondary Market. High Net Worth individuals can offer buy back guarantees on the loans they offer for sale so that they will repay the buyers if the borrower falls more than 60 days in arrears. This seems to be a good deal for those making purchases although those offering loan parts under this scenario, quite understandably, request a high premium nonetheless the stated return for buyers is still usually 5% pa.

ThinCats

Lent to Date: £503,183,000.

The platform has passed the £500 million lent milestone having channelled more than £200 million into SMEs over the past 12 months. This seems to have been done using institutional funding as the retail portal has been quite quiet during this period.

There were 2 auctions taking place when this blog was compiled but these were parts A and B of the same loan to the Scottish Night Club owners that were featured in my previous blog.

Invest & Fund

Lent to Date: £60 million – latest figure available.

There were 0 auctions taking place when this blog was compiled.

Highlighted Loan: Property Developers requested their initial >£1.3 million tranche of a >£3.7 million facility. This drawdown refinances an existing I&F bridging loan used to purchase an office complex which was formerly a large country house in the South East while the remainder of the capital will be used to convert the site back to residential usage in the shape of 5 townhouses and 17 apartments. The borrowers reportedly had plenty of experience with this type of project. Both the current LTV and future GDV were in the region of 65% while investors had the opportunity to earn interest at the rate of 7.5% pa if all went to plan.

LendingCrowd

Lent to Date: £63,594,316 – increase of £1,769,100 (2.86%) since the last blog.

On the morning this blog was compiled, 0 auctions were taking place.

Highlighted Loan: A Business which supplies Fitted Furniture required £95k to refinance short-term borrowing and to refurbish their premises. The most recent Annual Profits were £71.5k although Net Assets were a healthy £346k, furthermore the loan was classed as Asset Backed although, frustratingly, this site never provides details of the security in question. I decided to invest a small amount for a return of 9.5% pa.

ArchOver

Lent to Date: £105,371,000.

There were 3 auctions taking place when this blog was compiled.

Highlighted Loan: The first of a new type of loan for ArchOver secured against R&D Grants from the EU and/or the UK Government was listed in 2 tranches yesterday and today. A manufacturer of technology that detects concealed weapons requested a total facility of £275k which will be repaid via two grants of £165k and £110k. The grant for the former tranche is expected to be received in the next month and that section of the funding earnt investors 9% pa pa. The payment which will cover the remaining balance of the loan is not expected until February. As this is regarded as a higher risk, this portion of the loan offered a return of 10% pa. In this instance, the grant is due to be received from the EU and Brexit does not pose a risk to this as the UK Government has agreed to underwrite the funding. The grant is the only security.

CapitalRise

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

CapitalRise have listed 2 loans since the last blog.

Highlighted Loan: ArchOver launched a new type of loan yesterday when a company that provides hardware that can detect concealed weapons requested the first £110k tranche of a £275k that is secured against the future payment of a grant from the EU. This loan should be unaffected by Brexit as the UK have agreed to underwrite the funding. A return of 10% pa was offered and the capital requirement was fully funded within 30 minutes of the notification email arriving in my inbox.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.3 billion – latest figure available.

Returns: Interest rates are set according to supply and demand. They currently range from 3.5% pa to 5.5% pa depending on the length of the investment. These figures are similar to what they were when they previous blog was compiled.

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

Lending Works

Lent to Date: £186,925,448 – an increase of £2,525,644 (1.37%) in the past fortnight.

Returns: 5.0% pa and 6.5% pa depending on whether or not investors require quick access to their funds via an IFISA or standard account for 3 and 5 year investments respectively

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.

Platform News: Lending Works have introduced quite a major overhaul of their offerings. Gone are the fixed 3 and 5 year terms instead investors can choose between a Growth Product which offers a return of 6.5% but has an early withdrawal fee of 0.5% or a Flexible Product with no withdrawal fees although the return is lower at 5% pa. In both cases, the expectation is that an investor's loans would be sold within 48 hours should they wish to access their funds however this is subject to the availability of other accounts that are in a position to buy them.

****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.