July P2P Lending Platform News Round-up

Totals lent to date (3rd July 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £819,600,000

Crowd2Fund - £29,430,000
Funding Circle - £5,000,000,000
FundingSecure - £308,062,994
Money & Co - £6 million approx
Rebuildingsociety - £15,600,000
ThinCats - £491,727,000
Invest and Fund - £60 million
LendingCrowd - £61,129,616
ArchOver - £100,519,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £181,571,370

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £819,600,000 - £21.3 million growth (2.67%) in the past fortnight.

The past 2 weeks have been the busiest for Assetz Capital since April.

When this blog was compiled, there were 96 loans in the pipeline with 1 imminently due to be drawndown.

Highlighted Loan: A husband and wife requested £480k to enable them to purchase a Guest House in the North East of England. Security was provided by the property in question and also a beauty salon that had a flat above it. Despite being covered by these two buildings, LTV was still very high at over 71% furthermore, the wife is in arrears with the HMRC following a mix up with payments for her work as a foster carer. I therefore thought a return of 5.5% pa was too low for this 5 year loan which had an amortisation profile of 20 years.

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)

Crowd2Fund

Lent to Date: £29.43 million.

Since the last blog, I have received 4 email notifications about new auctions launching on the site.

Highlighted Loan: A Jazz Club in London requested £50k. The blurb indicated this was to be used on marketing and the creation of a streaming portal so that their gigs can be watched from the web however the detailed information reported that £32k of the amount was to be used for debt consolidation. The business had negative Net Assets however the owner claimed to have enough personal wealth to cover the loan, although this was not detailed. All in all this seemed riskier than the 11% pa rate of return that was offered.

Funding Circle

Lent to Date: £5 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 – they also blame worsening economic conditions for them getting fewer requests for borrowing from SMEs. The improved credit checking is good news for investors as they should experience fewer defaults while being bad news for shareholders as FC make profit from each loan they list.

FundingSecure

Lent to Date: £308,062,994 at end of May – figures updated monthly.

When this blog was compiled there were 4 auctions taking place.

Highlighted Loan: This afternoon the fifth £54k tranche of a £505k facility to continue the conversion of farm buildings into holiday flats was listed. Although the development was 9 months away from being completed this loan had a standard FundingSecure 6 month term. So this was likely to become another late loan as I can't imagine the borrower having much incentive to pay the interest to renew for the sake of 3 months when there are already so many much later loans on the platform. The exit strategy was to refinance on a long term mortgage on completion. The LTV and GDV were not too bad at 60.9% and 50.5% respectively, assuming the valuation is accurate, while a return of 12% pa was offered.

Defaults: The loan secured against a number of mobile homes proved to be something of a disaster. Because the borrower who had manufactured them had been declared bankrupt, buyers would be unable to purchase any replacement parts in the future and so the homes went for a very low price at auction. Investors only received 15% of their capital back.

Money & Co

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

There was 1 auction taking place when this blog was compiled. This was a familiar borrower in the shape of a Germany Property Developer who, in more than 4 weeks, had been unable to hit the £250k target for their twenty-third tranche of funding since last Summer.

rebuildingsociety

Lent to Date: £15,600,000.

There was 1 auction taking place when this blog was compiled and this was for the Domiciliary Care Agency from Yorkshire discussed in the last blog.

ThinCats

Lent to Date: £491,727,000. This figure, from the site's home page, has increased by over £26 million in the past fortnight. The funding must have come from institutional investors, and the platform's owners – ESF Capital, as I have not seen any loans listed for retail investors for some months. A reported £700 million has been raised from institutional investors on this platform over the past 2 years compared to £100 million from individuals so it does seem to be orientated towards the City.

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

Invest & Fund

Lent to Date: £60 million – latest figures

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

Highlighted Loan: Property Developers requested their twelfth >£50k tranche of a £2.18 million facility that was being used to construct six 4-bedroom houses in the North West. The build is well on the way to completion with some properties already sold and the facility has been paid down to £300k which has reduced the GDV to 32.9%. A return of 8% pa seemed like a good deal.

LendingCrowd

Lent to Date: £61,129,616 – increase of £1,017,060 (1.69%) in the past fortnight.

On the morning this blog was compiled, 1 auction was taking place.

Highlighted Loan: Recruitment Agency requested <£83k to replenish their Working Capital following the payment of a large VAT bill. Borrowing for this sort of scenario always seems like the management has got into a situation that they should have planned to avoid. Furthermore, in the most recent Financial Information, Net Assets were only half the amount being borrowed while Annual Profits were just £10k. So this loan offered no temptation to me. The average return on the 197 bids that had been made when I reviewed the loan was 10.62% pa.

ArchOver

Lent to Date: £100,519,000.

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

Highlighted Loan: On the site at the moment is a new type of loan to a company that offers rapid resolution to legal disputes between SMEs. They cover all legal costs, which are often a barrier to businesses taking disputes to court, and have insurance to cover losing larger cases. Their initial loan on the ArchOver platform is for £250k which will be used to take on more cases and expand the business. Security is provided by fees from cases or insurance cover where they don't win. Investors were offered a return of 9% pa but this sounds almost too good to be true so I will sit this out and see how things go.

CapitalRise

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

CapitalRise have not listed any new lending opportunities in the past fortnight.

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 3.5% pa to 5.3% pa depending on the length of the investment. These figures are little changed 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: £181,571,370 – an increase of £2,125,841 (1.18%) in the past fortnight.

Returns: 5.0% pa and 6.5% 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.