December P2P Lending Platform News Round-up

Totals lent to date (12th December 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £678,700,000

Crowd2Fund - £25,600,000
Funding Circle - £4,200,000,000
FundingSecure - £291,349,659
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £347,877,000
Invest and Fund - £3 million plus
LendingCrowd - £47,831,436
ArchOver - £84,551,000

PERSONAL P2P LENDING

RateSetter - £2,931,932,034

Lending Works - £143,193,260

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £678,700,000 - £11.5 million growth (1.72%) in the past fortnight.

When this blog was compiled, there were 89 loans in the pipeline with 4 imminently due to be drawndown.

Highlighted Loan: Property Developers from the North West requested the initial <£116k tranche of a <£375k facility to purchase land on which a couple of 3 or 4 bedroom homes will be constructed. There were a couple of negatives with this loan – LTV was not far away from 70% and there may be a right to light issue with an adjacent property. Although the borrower intends to construct the relevant roof in such a way as to avoid this problem, it is still a risk. With the LTV already so high, if this turns out to a deal breaker it could substantially devalue the land therefore the 7% pa return on offer was nowhere near enough to tempt me.

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)

Crowd2Fund

Lent to Date: £25.6 million – latest available figure.

In the past fortnight, I received 2 email notifications about new auctions launched on the site.

Highlighted Loan: Organisers of after-school sports clubs returned to Crowd2Fund to raise £27k to help them to realise their plans of adding 2 further venues to their portfolio. Their most recent Annual Profit and Net Asset figures both covered the amount being borrowed and so it was no surprise to see the loan fully funded very soon after receiving the email notification especially as the return on offer was 12% pa.

Funding Circle

Lent to Date: £4.2 million

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.

FundingSecure

Lent to Date: £291,349,659 at end of November – monthly growth of £2,988,750 (1.04%).

The site deliberately throttled back on the number of new loans listed during November as they increase staffing levels and make changes to their processes to support the planned introduction of a wider product range. They also advise that there has been a general slowdown in the market. This was reflected by there being only 4 auctions waiting to be filled when this blog was compiled compared to 11 a fortnight ago.

Highlighted Loan: Of the small number of loans that have been appearing, most are renewals that take ages to become fully funded. One of these was a £114k loan to convert a former pub in a North Western city into a hotel. It was listed a week last Friday but was only 84% funded today. I hope that target is reached as I have a sizeable amount tied up in this – it is one that I bought intending to sell when the Secondary Market was buoyant. If the renewal takes place, I intend to take the funds out of FundingSecure. Unless the new owners can turn things around, I fear for this site but at least they appear to have acknowledged there are problems.

Platform News: FundingSecure advise that they plan to offer loans that have terms longer than 6 months. Possibly this will reduce the number of late loans by giving developers more time to sell their completed projects.

Money & Co

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

When this blog was compiled there was 1 auction taking place which concerned a £250k loan to a German Property Developer. This was the fourteenth tranche of funding to this borrower who seems to have been the site's only customer since the Summer. Investors were offered a return of 8% although no financial information was provided and the amounts being borrowed are increasing… hopefully the latter is not a sign that the business is getting deeper into trouble.

rebuildingsociety

Lent to Date: £13,000,000.

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

Highlighted Loan: A haulage and self-storage company required >£30k to top-up a bridging loan that is enabling them to purchase the property from which they operate. They hope to switch to longer-term finance in the near future but cannot do so immediately because the premises are being purchased at a discount. There is office space within the premises that can be sub-let after the purchase has taken place. Because a Second Charge of the property was offered in addition to the Personal Guarantees, the maximum bid rate was reduced from 20% pa to 15% pa – nonetheless I was happy to invest for that sort of return in the hope that the rapid refinancing will materialise.

ThinCats

Lent to Date: £347,877,000.

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

Highlighted Loan: A loan of £517k was requested shortly after the last blog went to press to enable a director's shareholding in a Consultancy operating in the Oil and Gas sphere to be bought out by other members of the management team. Security was provided via charges over the company however with the price of oil falling due to increasing production from shale in the USA and with a target rate of 6.47% pa this looked like a high risk, low return scenario.

Platform News: ThinCats have announced that one of their institutional investors is the BAE Pension fund.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Property Developers returned for their ninth <£359k tranche of funding for a £5.6 million facility required to develop 12 four bedroom semi-detached properties on the site of a former stable block in the South East. The latest Monitoring Surveyor's report advises that although unplanned expenditure has occurred, the contingency amount that was forecast in the original budget has not been exceeded. Investors were offered a return of 9% pa although the project appears to be just a couple of months away from completion.

LendingCrowd

Lent to Date: £47,831,436 – fortnightly increase of £475,860 – 1.00% growth.

When this blog was compiled, 1 auction was waiting to be funded on the site.

Highlighted Loan: Commercial Flooring specialists were looking to raise >£151k to pay off costly short term borrowing and thereby improve their balance sheet which had been in a gradual decline over the past few years according to their financial figures which went up to 2017. However, LendingCrowd advised that things have turned around and improved over the past 12 months. I decided to take LendingCrowd's word and invested a small amount for a return of 10% pa, making my bid close to the end of the auction so that I could pitch it above the average rate.

ArchOver

Lent to Date: £84,551,000.

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

Highlighted Loan: Software Developers who have a product that manages the allocation of labour within the hospitality trade were seeking the second and final £150k tranche of their £250k facility that will provide Working Capital as they continue to grow their business. As they provide their products as a service, they have a predictable income stream which this loan is secured against. Unusually for this site there is no insurance cover, instead there is a charge over the business although this might not be worth much if difficulties are encountered. Investors were offered a return of 8% pa.

Platform News: ArchOver have relaunched their Lender Referral Scheme in which investors and their friends share £150 if the latter pledges £5k within 90 days. This seems a high threshold for such a small reward.

PERSONAL P2P LENDING

Zopa

Platform News: Zopa have been granted the authority to become a bank.

Ratesetter

Lent to Date: £2,931,932,034 – an increase of £33,276,602 over the past 2 weeks – 1.15% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.6% pa to 5.8% pa depending on the length of the investment. The former figure has reduced by 0.7% pa and the former has increased by 0.1% pa.

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: £143,193,260 – an increase of £2,395,028 over the past 2 weeks – 1.7% 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 both increased by half a percent in the past fortnight.

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.