End-March P2P Lending Platform News Round-up

Totals lent to date (27th March 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £742,600,000

Crowd2Fund - £26,060,000
Funding Circle - £4,600,000,000
FundingSecure - £300,435,609
Money & Co - £6 million approx
Rebuildingsociety - £15,000,000
ThinCats - £395,519,000
Invest and Fund - £60 million
LendingCrowd - £55,474,136
ArchOver - £94,753,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £161,366,247

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £742,600,000 - £4 million growth (0.54%) in the past fortnight.

Although growth has been lower in the past fortnight the future looks promising as, when this blog was compiled, there were 100 loans in the pipeline with 2 imminently due to be drawndown.

Highlighted Loan: Borrowers requested £173k on a 5 year loan with an amortisation profile of 20 years to enable them to buy a guest house in Scotland. The funds were being raised by a retired couple but they have introduced another 2 people to their business to provide succession planning. The current LTV is 54% but it is expected that enough capital will have been repaid in 5 years to bring this figure well below 50% to facilitate refinancing. Investors were offered a return of 5% pa which seemed a little on the low side.

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: To attract those using their ISA Allowance for the current Financial Year, Assetz Capital have extended the 1% Cashback offer on their recently launched 90 Day Access Account until 5th April.

Assetz Capital have launched a new product aimed at Property Developers to give them rapid access to finance. Known as the Express Commercial Mortgage, it aims to provide funding within 6 weeks of an initial enquiry. Hopefully this will not reduce their levels of due diligence and put investors' funds at risk.

Crowd2Fund

Lent to Date: £27.01 million.

In since the last blog, I haven't received any email notifications about new auctions launching on the site. This could be due to the major changes the platform is undergoing behind the scenes which will provide a wider range of options for money transfers due to payments being handled in the UK rather than in the EU.

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.

FundingSecure

Lent to Date: £300,435,609 at end of February – figure updated monthly.

Earlier today there were 6 auctions taking place although 3 smaller loans were listed this evening and were quickly filled.

Highlighted Loan: There was a simpler time at FundingSecure when the site was essentially an online pawn broker – defaults were very rare and there was no backlog of long overdue property loans. A return to those days occurred recently when a borrower raised £1,500 with security provided by a gentlemen's Rolex watch however with a maximum loan part of £25 per investor and as these sort of offers are few and far between no one is going to make much of a return.

Defaults: Not much news on the default front. The site continues to wait for the funds to repay the loan secured against a power boat, it has been ongoing for so long the borrower must be Noah!

Platform News: Expect throughput to reduce as this site strives to list less risky offerings with the goal of zero defaults. Institutional funds will be used to underwrite loans before they are made available to retail investors meaning there will be no delays on drawdowns.

Money & Co

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

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

rebuildingsociety

Lent to Date: £15,000,000.

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

Highlighted Loan: Wine merchants requested £31.5k to buy more stock as they expand their online presence however this looked quite a risky loan as the annual profits were less than £14k and Net Assets were minus to the tune of £60k. The latter was a key metric as the only security was in the shape of an All Assets Debenture. Even though the maximum bid rate was 18% pa, I had no interest in investing in this loan.

Default: A firm of electricians were unable to meet their repayments. The wife of the owner had arranged the loan (and she had taken out other borrowing elsewhere) to cover her gambling debts – not that she put that in the original application... Just over 60% of the capital was repaid following a final settlement lump sum.

ThinCats

Lent to Date: £413,769,000.

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 <£107k tranche from a £998.5k facility to convert offices into 14 apartments. This loan offered investors two levels of risk. The bulk of the financing was via Tranche A which benefits from a First Charge for which a return of 7.5% pa is available while the second smaller Tranche B which ranks behind the first offers double that at 15% pa. The LTGV is 64.8% for the former and 72.5% for the latter. It appears as though the borrower didn't quite have enough security to borrow all the capital they needed at the lower rate.

LendingCrowd

Lent to Date: £55,474,136 – increase of £1,565,400 (2.9%) in the past fortnight.

On the morning this blog was compiled, 1 auction was listed.

Highlighted Loan: A provider of publishing services was looking to raise >£30k to refinance short term borrowing and lower their monthly overheads. Although Net Assets were less than £10k, the most recent profits before tax were more than double the amount being borrowed so I was happy to invest for a return of 10.55% pa. This was a very popular offering being 44% oversubscribed with 90 minutes of the auction remaining.

Platform News: LendingCrowd report that 36% of those who have invested in their IFISA product have transferred their holdings from another ISA provider.

The site has also added a new member of staff who will provide more timely updates about loans in arrears.

ArchOver

Lent to Date: £94,753,000.

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

Highlighted Loan: Marketing Agency requested £300k to pay off existing borrowing, recruit new staff and also to provide working capital. The company has an impressive list of Blue Chip clients although with the consumption of media switching to the internet rather than newspapers and TV, this is a rapidly changing industry which introduces risks however the loan was insured by Nexus. As a result, 7.7% pa seemed to be a fair return.

CapitalRise

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

Platform News: CapitalRise's round of equity funding via the Seedrs platform has proved to be very successful. They wished to raised £1.5 million but earlier this month they had exceeded that target by £250k.

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 3.1% pa to 6.1% pa depending on the length of the investment. These figures are little changed from a fortnight ago – 0.1% high in each case.

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

Platform News: To tie in with their recent rebranding and website update, RateSetter is currently offering an incentive to new investors. People who lend £500 or more for a year will receive a £50 bonus, while those contributing over £10,000 for the same time period earn £150.

Lending Works

Lent to Date: £161,366,247 – an increase of £2,550,102 in the past fortnight – 1.61% 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.

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.