June P2P Lending Platform News Round-up

Totals lent to date (5th June 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £794,400,000

Crowd2Fund - £29,430,000
Funding Circle - £5,000,000,000
FundingSecure - £305,796,810
Money & Co - £6 million approx
Rebuildingsociety - £15,500,000
ThinCats - £465,125,000
Invest and Fund - £60 million
LendingCrowd - £59,309,496
ArchOver - £99,654,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £176,430,295

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £794,400,000 - £4.5 million growth (0.57%) in the past fortnight.

When this blog was compiled, there were 101 loans in the pipeline with 1 imminently due to be drawndown.

Highlighted Loan: A Welsh Care Home requested £175k as their current lender no longer wishes to be involved in this business sector. The borrowers took over the operation in 2015 when the occupancy rate was only 25%. Since that time, they have turned things around. The loan was for 5 years but with an amortisation profile of 20. When the term ends, it is expected that the LTV will be below 50% which will provide access to more conventional funding. Investors were offered a return of 6% pa.

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: Towards the end of May, AssetzCapital reported a record amount of inflow – £13 million – into their IFISA product during April. This brought the total allocated to the tax-wrapper to £90 million which is 22% of the total invested via the platform.

Crowd2Fund

Lent to Date: £29.43 million.

Since the last blog, I have received 5 email notifications about new auctions launching on the site.

Highlighted Loan: Online retailers of second hand clothing – currently "on trend" in Green circles – were looking for £25k to buy additional stock. This was a very young company, only 2 years old, and the most recent Annual Profits were negative to a value that was almost double the amount being borrowed. Losses are not unusual with a fast-growing start-up, nonetheless, loans of this nature are high risk – especially in the cut throat field of fashion – and this was reflected by the 15% pa rate of return.

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 although these forecasts have been on a downward trend in recent months.

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.

At the moment, many posters on P2P Lending Forums are expressing concerns about the liquidity of this platform having been waiting a couple of months to sell their loan parts.

FundingSecure

Lent to Date: £305,796,810 at end of April – figure updated monthly.

When this blog was compiled there were 8 auctions taking place although some of these have been listed for 6 weeks without being fully funded.

Highlighted Loan: An entrepreneur has 2 loans listed at the moment as they look to raise a total of <£514k to purchase a petrol station in the North Midlands and refurbish another such site within their portfolio. One loan was secured against the business being bought and the other was backed by a First Charge over yet another fuel outlet. The LTV of each was well below 60% however it is notoriously difficult to get an accurate valuation of business premises such as these – and their valuation can plummet due to alternative routes being constructed or long-term roadworks. These scenarios would also impact on the exit strategy of obtaining a commercial mortgage. Therefore, I felt return of 11% pa was far too low to tempt me.

It is good that FundingSecure now highlight how loans relate to an individual borrower. I recently became aware of someone who had taken out 7 loans on the platform and I had invested in 4 of them. As some of these are secured against care homes, the platform has decided to treat the entire portfolio as one. There was no indication in the original descriptions of the connection.

Defaults: Restoring some hope in FundingSecure, one of my loans was settled 3 months early although another loan which was due to end last January repaid 100% of the capital but only part of the interest was paid meaning investors earnt 5.3% pa instead of 13% pa but at least they got a return. I still have 68 loans which have overrun their 6 month term – some by a few years!

Money & Co

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

There was 1 auction taking place when this blog was compiled. It was a familiar borrower in the shape of a Germany Property Developer who was requesting £250k in what was their twenty-third tranche of funding since last Summer. I have discovered that this is quite a large operation which raises funds across the Globe. They have invested over £1.6 Billion Euros in historic buildings which their business plan is to renovate. The German Government provides tax breaks to purchasers of the completed projects which the company undertakes.

rebuildingsociety

Lent to Date: £15,500,000.

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

Highlighted Loan: Father and son borrowers requested £55k to purchase a Post Office in Liverpool. They hope to improve profitability as they believe the shop has been neglected due to being part of a nationwide chain. Their plans include reducing staffing costs by serving time behind the counter themselves. Due to the experience in retail that the duo have, I felt it was worth contributing a small amount for a return of 20% pa especially as they currently own a Post Office which they intend to sell to pay off some of this loan.

ThinCats

Lent to Date: £465,125,000.

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

Invest & Fund

Lent to Date: £60 million – latest figures

There was 1 auction taking place when this blog was compiled.

Highlighted Loan: Property Developers in the Home Counties requested their third >£170k tranche of a £3.835 million facility. This had to be extended in February because the project to construct 6 apartments was running well behind schedule – it was supposed to complete last September. The Monitoring Surveyor now forecasts that the work will be finished in early July although this target has moved back several times in recent months. The term of the loan is for 9 months to allow time for sales to take place although this may need to be extended further if the delays continue. Investors who believed there would be a completion at some point were offered a return of 9.5% pa.

LendingCrowd

Lent to Date: £59,309,496 – increase of £621,800 (1.06%) in the past fortnight.

The throughput of loans on LendingCrowd has slowed down a little and no auctions were listed on the day this blog was compiled.

Highlighted Loan: Recruitment Agency was looking for £108k to hire additional staff however their balance sheet did not appear to support such levels of borrowing. The most recent Annual Profits were only £53k and Net Assets were negative by a similar amount. It was therefore surprising that LendingCrowd had given this an A rating so that, at the time I reviewed the loan, investors were only getting an average return of 8.52% pa.

ArchOver

Lent to Date: £99,654,000.

There were 4 auctions taking place when this blog was compiled.

Highlighted Loan: Providers of LiveChat services that are used to provide help to website visitors were looking to refinance their £300k of growth funding – this was to be broken down into two £150k tranches of which this was the first. Part of the previous capital injection was used to purchase another business which has already paid for itself. The refinance will be used to develop the products in its portfolio and strengthen its senior management team. Security was provided by future revenue although, unlike many others on this platform, this loan was not insured. Investors were offered a return of 9% pa.

CapitalRise

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

Last week CapitalRise advised investors of the opportunity to invest in the first tranche of a £1.7 million loan to a Property Developer who has bought an apartment in Central London which they intend to renovate and sell. The initial tranche was £1.4 million and covered the cost of purchasing the property – this was pre-funded by CapitalRise as will be the remaining £300k worth of development capital. The refurbishments are expected to take 6 months to complete with the remainder of the 14 month term being used to find a buyer. Investors were offered a return of 8% pa with security being provided by a First Charge over the property plus a Second Charge over a Development which the borrower has recently completed. These provide a combined LTV of just over 62%.

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 3.0% pa to 5.2% pa depending on the length of the investment. These figures are little changed from a fortnight ago.

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: £176,430,295 – an increase of £3,238,726 in the past fortnight – 1.87%.

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.