August's P2P Lending Platform News Round-up

Totals lent to date (22nd August 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £587,200,000

Crowd2Fund - £20,200,000
Funding Circle - £3,800,000,000
FundingKnight - £31,485,000 ** No longer active
FundingSecure - £266,118,577
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £290,408,000
Invest and Fund - £3 million plus
LendingCrowd - £41,931,256
ArchOver - £76,516,000

PERSONAL P2P LENDING

Zopa - £3,560,000,000
RateSetter - £2,684,807,594

Lending Works - £125,344,099

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £587,200,000 - £4.6 million growth (0.79%) in the past fortnight.

When this blog was compiled, there were 80 loans in the pipeline with 5 imminently due to be drawndown.

Highlighted Loan: Property Developer required the first >£277k tranche of a >£885k facility to assist with the purchase of a site and fund the construction of 4 dwellings for which there is planning permission. It seems as though Assetz Capital had to get creative to find an adequate level of security for this loan as, in addition to a First Charge over the land, there is a Second Charge on the borrower's private residence. Even with this, the LTV is a close-to-maximum 67%. Investors were offered a return of 7% pa with the loan expected to be repaid in 18 months when the properties are sold.

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)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Platform News: Assetz Capital continue to press on with their ambitions to bring more loans to the platform and will be hosting events aimed at brokers in Newbury, London and Birmingham over the coming months.

Crowd2Fund

Lent to Date: £20.2 million – latest available figure.

Over the past 2 weeks, I received 3 notifications of new auctions being listed on the site.

Highlighted Loan: One of the highest rates of return I have seen on this site was the 15% pa offered to investors for contributing to the £50k required by a luxury car and van hire business to purchase more vehicles. Net Assets only just about covered the amount being borrowed while Turn Over was also worryingly low at 4x that amount. No wonder the interest rate was so high! At least assets were being purchased although depreciation on new prestige vehicles is eye-watering – 20% according to a reply from the borrower via the Q&A.

Funding Circle

Lent to Date: £3,800,000,000

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 5% - 5.5% pa and 6% - 7% 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 amid accusations that they are currently recklessly increasing the size of their Loan Book to boost the planned stock market launch

Despite these concerns, Funding Circle has lent the most so far in 2018 having seen its loan-book increase by £800 million. May be this high throughput approach is part of the problem.

FundingSecure

Lent to Date: £266,118,577 at end of July – monthly growth of £6,587,126 (2.54%).

The backlog of loans continues on this site with 21 waiting to be filled when this blog was compiled. FundingSecure claim it is due to the warm weather providing investors with other things to do. As Autumn draws near, we will find out whether that assumption is true. The number of late loans that have not had updates relating to their resolution is a concern for many.

Highlighted Loan: This week I invested in the renewal of the £715k loan to a Property Developer from the Midlands who had completed the conversion of a former train station to commercial units and was in the process of refinancing against cheaper borrowing. Hopefully, this will go to plan. With a LTV of 65% the return was 13% pa.

Defaults: More model trains have been sold while a buy to let property belonging to a borrower who has been declared bankrupt found a buyer however after the First Charge holder was repaid, FundingSecure investors only received 12% of their capital. Legal proceedings continue however a loss is very likely for us rate tarts attracted by the original return of 15% pa.

Wheeling & Dealing: The Secondary Market is still very quiet and brings into question my strategy of investing larger sums into specific loans with a view to selling them before maturity. So now I have to hope that none of the borrowers I am excessively exposed to will default.

Money & Co

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

When this blog was compiled there was 1 auction taking place which was the 7th tranche of funding to German Property Developers who have been mentioned in previous blogs. Rather scarily, no financial information was provided! Despite being listed for more than a fortnight, the capital requirements are only 30% met. Investors were offered a return of 8% pa on the £150k loan.

rebuildingsociety

Lent to Date: £13,000,000.

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

Highlighted Loan: Midlands based Career Advisors in the medical sphere required £54k of expansion capital to establish satellite operations in the North West and South East of England. Three years ago the company had gone into liquidation due to non-payment of taxes however the borrower gave a very detailed description of how they had improved their financial practices and this encouraged me to invest a small amount for a return of 19% pa. The return was so high because the only security was a Personal Guarantee and a Debenture over the business.

ThinCats

Lent to Date: £290,408,000 – fortnightly increase of £2,010,000 – 0.70% growth.

There were 2 auctions taking place when this blog was compiled although both were to the same borrower.

Highlighted Loan: To purchase a company that produces conference merchandise, £621k was required. Unusually, although the loan was split with capital being repaid monthly on £466k and interest only on the remaining £155k, the rate of return was 7.5% pa on both despite the non-payment of capital until the end of the term being riskier in the latter instance. In any case, I felt the offer of 7.5% pa was too low as the only security was a debenture over the company and unsupported Personal Guarantees. When a new management team comes in they have so much to learn there is always the chance of failure.

Invest & Fund

Lent to Date: Over £3 million

There were 2 auctions taking place when this blog was compiled.

Highlighted Loan: A Property Developer from the West Midlands requested the first <£65k tranche of a £2.2 million facility that will fund the construction of 14 semi-detached houses on the site of a former public house. The initial drawdown will cover the Net Arrangement Fees and no further financing will be released until the Borrower has funded the Development up to the minimum amount they have agreed to invest. A First Charge provided a LTGV of 58.5% and investors were offered a return of 8.25% pa.

LendingCrowd

Lent to Date: £41,931,256 – fortnightly increase of £727,540 – 1.77% growth.

This site usually adds loans in the afternoon with the auctions ending at 11 am the next day. On the morning this blog was compiled 2 such auctions completed.

Highlighted Loan: Electrical Contractors required >£23k to be paid back over the next 5 years to fund the growth of their business. The most recent profit figure was £14k and Net Assets were £10k. The length of the loan plus the fact that there was no other borrowing tempted me to invest a small amount for a return of 9.5% pa.

Default or not: A couple of the companies I am lending to via this site have gone into liquidation however as the borrowers continue to make repayments, the loans have not been defaulted.

Platform News: Of the sites monitored by this blog, LendingCrowd is the platform that has seen proportionally greatest increase in the size of its loan-book – 78%. This may be due to it picking up business from Ratesetter after its withdrawal from the businesses lending market. ArchOver and LendingWorks have been the next most successful using this measure. The amount borrowers have received from them is around 50% of the capital they had raised up to December.

ArchOver

Lent to Date: £76,516,000 – fortnightly increase of £1,401,000 – 1.87% growth.

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

Highlighted Loan: Localised mobile network providers were looking to raise £400k to develop SaaS (Software as a Service) products which will generate regular income. The loan was secured against future revenues from contracts already in place and these repayments were insured by Coface. Investors were offered a return of 7% and the capital requirements had been fully-funded by the end of the day on which the email notification was received.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.56 billion – an increase of £40 million over the past 2 weeks – 1.14% growth.

Returns: Zopa's 2 accounts offer returns of 4.0% and 4.6% pa with the latter allocating some funds to riskier loans that offer higher returns.

Zopa distribute investor's money mostly to unsecured consumer loans.

Platform News: Summer is traditionally a slow time for news and Zopa have underlined that fact by reporting a larger proportion of their investors hate Marmite than the national average!

Ratesetter

Lent to Date: £2,684,807,594 – an increase of £14,219,749 over the past 2 weeks – 0.54% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.7% pa to 5.7% pa depending on the length of the investment. The first figure is half a percent higher when compared to a fortnight ago while the latter has remained the same.

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: £125,344,099 – an increase of £2,737,056 over the past 2 weeks – 2.28% growth.

Returns: 4.5% pa and 6.0% pa 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.

****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.