July's P2P Lending Platform News Round-up

Totals lent to date (25th July 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £567,400,000

Crowd2Fund - £20,200,000
Funding Circle - £3,400,000,000
FundingKnight - £31,485,000
FundingSecure - £259,531,451
Money & Co - £6 million approx
Rebuildingsociety - £12,900,000
ThinCats - £288,398,000
Invest and Fund - £3 million plus
LendingCrowd - £39,630,456
ArchOver - £74,695,000

PERSONAL P2P LENDING

Zopa - £3,480,000,000
RateSetter - £2,628,373,354

Lending Works - £120,275,553

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £567,400,000 - £8.7 million growth (1.56%) in the past fortnight.

The steady throughput of loans continues at Assetz Capital.

Highlighted Loan: Property Developers in the South East required >£458k to refinance a Funding Circle loan as that platform has withdrawn from this sector of the market. This was the first tranche of a <£888k facility which will see 3 former dwellings constructed on former farmland. The intention is to repay the loan when the properties are sold. The LTV was 62% and I was happy to invest for a return of 8% pa with the intention of selling before maturity.

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 could well be listing more loans from borrowers in Scotland having opened their new office is Edinburgh which can accommodate up to 9 members of staff.

Crowd2Fund

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

Over the past 2 weeks, I received 6 notifications of new auctions being listed on the site.

Highlighted Loan: Contractors working in the Electricity Networks sector required £213k of expansion capital to obtain new vehicles and take on additional staff. Net Assets were less than the amount being borrowed while the most recent profits were <£88k. Most importantly, the client base seemed very small and as the electricity sector is so cost sensitive there are risks that this business could get wiped out by a rival. Investors were offered a return of 11% pa.

Funding Circle

Lent to Date: £3,400,000,000

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.

Platform News: Funding Circle has reduced its exposure to the US P2P market after the costs of hedging against the value of the Dollar proved prohibitive and caused it to warn that it is likely to reduce the dividend of the Funding Circle Investment Fund.

FundingKnight

Lent to Date: £31,485,000 – no change.

There were 0 auctions ongoing when this blog was compiled – only 1 loan appeared on this site during 2017. The platform is planning a relaunch at some point in 2018 but there have been no signs of life so far.

FundingSecure

Lent to Date: £259,531,451 at end of June – figure updated monthly.

Loans have been taking much longer to fill on this site recently and there are no less than 18 auctions waiting to reach the required amount of capital.

Highlighted Loan: Possibly the reason for the lack of enthusiasm for the currently active loans is because many of them are either renewals or additional tranches required by Property Developers. Very few are new offerings. One example of the former is the renewal of £102k worth of borrowing secured against a very large collection of memorabilia relating to one of the biggest pop groups of the '80s (including the exhibition stands). The LTV was only 34% but as a result the return was 10% pa instead of the 13% pa offered for many loans on this site.

Defaults: It has been a good fortnight for asset sales although that is a relative term. After months of inactivity, 1 yacht out 6 has been sold and along with 3 items of model railway rolling stock. There are 11 of the latter still waiting for buyers.

Wheeling & Dealing: I have two loans waiting to be sold, the Secondary Market seems as lacklustre as the Primary one – hopefully everyone is out enjoying the good weather and things will soon pick up.

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 6th tranche of funding to German Property Developers who have been mentioned in previous blogs.

rebuildingsociety

Lent to Date: £12,900,000 – no change.

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

Highlighted Loan: A packaging company from the North East required >£67k to refinance existing borrowing and fund their continued growth. They had raised £50k a couple of years ago via ReBS and I had invested in this business at the first time of asking therefore it was good to hear that it had helped them to increase their turnover by £1/2 million. I was happy to renew my support for a return of 16% pa as the refinancing would reduce their monthly payments.

ThinCats

Lent to Date: £288,398,000 – no change reported.

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

Highlighted Loan: ThinCats listed one of their "Community Chest" loans last week, this was to an organisation that provides finance to individuals and companies who find it difficult to raise funding via conventional means. They required £300k but this was totally unsecured. The target rate of return was 10% pa although individual tax payers would be eligible for 30% Social Investment Tax Relief (SITR) on their investment nonetheless with funds going to such high risk borrowers, with little detail as to who they are, there is a good chance of losing far more than that.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Property Developers returned to I&F to finance their latest project which will convert a former shoe factory into 10 apartments. Last week they requested the first >£274k of their £720k facility to purchase the site prior to redevelopment. Neither the capital nor interest will be paid until the development is completed and sold which in my view is a risk that makes the 8% pa return too low.

LendingCrowd

Lent to Date: £39,630,456 – fortnightly increase of £834,520 – 2.15% growth.

2 new auctions were listed on this site on the evening this blog was compiled.

Highlighted Loan: A construction company who had a wide portfolio of work was looking to raise >£159k to purchase material and vehicles plus hire more staff to support their growing business. The financials comfortably covered the borrowing but were well over 12 months out of date. Having had my fingers burnt when businesses' balance sheets have gone sour in the space of a year, I decided to pass on this. Those that had invested were getting an average return of 9.4% pa when I reviewed this loan.

ArchOver

Lent to Date: £74,695,000 – fortnightly increase of £725,000 – 0.89% growth.

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

Highlighted Loan: The Money Transfer Operator that featured in last blog who were expanding their business into the online arena were today raising another £100k having already had £850k from ArchOver's borrowers. Security is provided via a charge over payments due although, with this being a highly liquid operation, a fortnight ago I wondered how effectively this could be monitored and now I am perplexed that the amount required has increased from £300k to over £850k. Has turnover increased by so much in such a short space of time that ArchOver have enough security to lend 3 times the original amount? They certainly appear to believe this is a riskier proposition because the return on offer has increased from 8% to 9% pa.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.48 billion – an increase of £40 million over the past 2 weeks – 1.16% 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.

Ratesetter

Lent to Date: £2,628,373,354 – an increase of £33,011,223 over the past 2 weeks – 1.27% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% pa to 5.6% pa depending on the length of the investment. These figures are little changed when compared to a fortnight ago although last week Ratesetter were so excited when the lower figure reached 3.4% pa that they sent an email to investors.

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: £120,275,553 – an increase of £3,070,942 over the past 2 weeks – 2.62% 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.