End of October P2P Lending Platform News Round-up

Totals lent to date (31st October 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £648,700,000

Crowd2Fund - £25.200,000
Funding Circle - £4,200,000,000
FundingSecure - £280,088,459
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £293,779,000
Invest and Fund - £3 million plus
LendingCrowd - £45,330,476
ArchOver - £82,608,000

PERSONAL P2P LENDING

Zopa - £3,760,000,000
RateSetter - £2,837,452,350

Lending Works - £136,507,070

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £648,700,000 - £18.9 million growth (3%) in the past fortnight.

When this blog was compiled, there were 83 loans in the pipeline with 1 imminently due to be drawndown.

Highlighted Loan: Property Developers from the Midlands were looking for >£2.1 million out of a total facility of £4.5 million to refinance existing borrowing from Assetz Capital as they continue to convert a former office block into apartments. Floors 1 to 5 are nearing completion and so this facility will finance Floors 6 to 9. There are a further 3 Floors but their development has not yet begun, that work will be undertaken in a separate Phase. Each apartment finished to date has been let within a month. With a return of 9% pa available and a LTV below 60%, I was happy to invest.  

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: £25.2 million – latest available figure.

In the past fortnight, I received 5 email notifications about new auctions launched on the site.

Highlighted Loan: An office partition company requested £80k to support their expanding business however profit margins have been very low over the past few years. This was explained via the Q&A as being due to incorrect pricing and is claimed to have been corrected but will orders still come in when charges go up? The business was only formed in 2015 and the learning process appears to be continuing therefore this seemed to be very high risk with no more than a director guarantee at the back of it. A return of 11% pa wasn't enough to tempt me.

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.

Platform News: Funding Circle have reduced the minimum value of a loan part (formerly Minimum Bid but investors are no longer allowed to place bids!) from £20 to £10. This will increase the diversity for smaller investors and should also give more consistent returns for a wider number of people.

FundingSecure

Lent to Date: £280,088,459 at end of September – figure updated monthly.

There were 13 loans waiting to be filled when this blog was compiled – up from 8 a fortnight ago.

Highlighted Loan: Property Developer from the Midlands requested their first £235k tranche of a £505k facility secured against a former farm which has planning permission for a housing development. The construction is expected to take 9 months and, as is standard practice on this site, the borrower will have to pay the accrued interest to renew after 6 months. Funds will be released such that the LTV will never be allowed to exceed 60%. I invested for a return of 12% pa with the intention of not renewing.

Defaults: Good and bad news – one property secured against a loan of £100k has been sold for £30k. FundingSecure are now considering legal action on the valuers and pursuing the borrower for bankruptcy. Properties that are backing a handful of other loans are close to being sold although one other borrower is about to be served a Formal Demand.

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 10th tranche of funding to German Property Developers who have been mentioned in previous blogs. As ever for this borrower, no financial information was provided but, despite this, the £100k loan was 92% funded. It offered a return of 8% pa.

rebuildingsociety

Lent to Date: £13,000,000.

There were 2 auctions taking place when this blog was compiled but both had been on the system for some weeks and have been discussed in previous blogs. They are now 100% funded and due to end this evening.

ThinCats

Lent to Date: £293,779,000 – fortnightly increase of £3,371,000 – 1.16% growth.

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

Highlighted Loan: Property Developers were looking to raise £843k to repay existing borrowing that had been used to construct 5 dwellings. One of these has already been sold. The capital injection will be used to purchase the next development plot, being repaid (hopefully) in the next 12 months when the remaining 4 properties are sold. Promisingly, one of them is already under offer. Investors were offered a return of 8.75% pa which seemed quite reasonable.

Platform News: Having made their IFISA product available to existing customers just over a month ago, ThinCats have opened it up to new investors and plan to accept transfers from existing ISAs early in the New Year.

Invest & Fund

Lent to Date: Over £3 million

There have been no emails announcing auctions on this site for more than 2 weeks.

LendingCrowd

Lent to Date: £45,330,476 – fortnightly increase of £517,020 – 1.15% growth.

When this blog was compiled, 2 auctions were waiting to be funded on the site.

Highlighted Loan: Makers of promotional videos were looking to raise £130k of expansion capital to enlarge their office space and then staff & furnish it. The output on their website looked very slick and their most recent annual profits more than covered the capital being borrowed so I was happy to invest for a return of 9% pa.

Defaults: A printers were classified as defaulted just after the last blog went to press. The company had gone into liquidation and they were more than 120 days behind with their repayments. I only had £40 invested in this loan.

ArchOver

Lent to Date: £82,608,000 – fortnightly increase of £977,000 – 1.2% growth.

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

Highlighted Loan: Providers of news content for law firms required £105k last week. This was an advance against the tax R&D rebate they had applied for. They current use IBM's Watson language processor to automatically extract content from the internet which is of interest to their clients but are developing their own software to undertake this task. I invested for a return of 10% pa.

Short and Sweet: In August I invested in one of ArchOver's loans which was secured against a future R&D rebate from the HMRC. These have the highest returns on the ArchOver platform at 10% pa so I thought I might be taking a risk however little more the 2 months later the tax refund has materialised and the loan repaid. I was keen to invest in the next loan of this nature (see above).

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.76 billion – an increase of £50 million over the past 2 weeks – 1.35% growth.

Returns: Zopa's 2 accounts offer returns of 4.5% and 5.2% pa with the latter allocating some funds to riskier loans that offer higher returns.

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

Ratesetter

Lent to Date: £2,837,452,350 – an increase of £26,587,631 over the past 2 weeks – 0.95% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 4.1% pa to 6.4% pa depending on the length of the investment. These figures have increased by 0.4% and decreased by 0.3% respectively over the past fortnight.

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: £136,507,070 – an increase of £1,763,866 over the past 2 weeks – 1.31% 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.