May P2P Lending Platform News Round-up

Totals lent to date (8th May 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £782,700,000

Crowd2Fund - £29,430,000
Funding Circle - £5,000,000,000
FundingSecure - £305,796,810
Money & Co - £6 million approx
Rebuildingsociety - £15,300,000
ThinCats - £448,030,000
Invest and Fund - £60 million
LendingCrowd - £57,995,336
ArchOver - £97,749,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £169,889,931

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £782,700,000 - £7 million growth (0.9%) in the past fortnight.

When this blog was compiled, there were 95 loans in the pipeline with 4 imminently due to be drawndown.

Highlighted Loan: Borrowers in the East of England were looking to raise £650k to purchase a 23-bed care home from the current owners who were restructuring to focus their business on larger premises. Those purchasing the concern, although they had extensive business experience, were new to the care sector which was a risk which made me feel the 6% pa rate of return. The high LTV of 68.42% was also a concern although some reassurance was provided by the fact that the home was profitable and the intention was to retain the existing management team and staff.

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: Assetz Capital are offering 2% Cashback on all ISA's from previous years that are transferred to their platform before 31st May. They will also give 2% Cashback on new ISA deposits up to the £20k maximum allowance.

Assetz Capital have announced plans for a third round of equity funding via Seedrs as they look to develop products which will appeal to a broader range of institutional investors.

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: Firm of architects required £90k to finance contracts they have secured. In relation to the amount being borrowed, annual profits were a little on the low side at less than £30k although Net Assets were a more encouraging £237.6k. Weighing up these risks, I felt the return on offer of 10.5% pa was quite reasonable.  

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. Nonetheless, the official projected rates of return have been on a downward trend for some months – as underlined in the Platform News section.

FundingSecure

Lent to Date: £305,796,810 at end of April – monthly growth £2,226,600 (0.73%).

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

Highlighted Loan: Property Developer in Northern Ireland requested £700k to progress a project to construct 44 dwellings. The scheme has been down-scaled from 55 properties although formal permission for the revision is yet to be received from the planning department. It is a little surprising that agreement with the council was not in place as this was a 6 month renewal, there must have been a change of plan since the loan was originally drawndown and I wondered whether the borrower had actually settled on a plan. Therefore, I wasn't tempted by the 12% pa return that was on offer especially as the LTV was relatively high at 63.64%.

Defaults: News about the many late loans I have on this site has been very sparse with only a single update in the past month. At least that was a report of a property moving closer to being sold although there was no certainty that the price will cover the capital.

Money & Co

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

There were 2 auctions taking place when this blog was compiled. It does appear as though this platform is focussing on Property Developers both home and abroad with a borrower in Germany requesting £250k in what was their twenty-first tranche of funding since last Summer with another company from the North East of the UK looking for their second capital injection of £150k.

rebuildingsociety

Lent to Date: £15,300,000.

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

Highlighted Loan: Classic Car dealers required £110k to construct a professional photo booth that is large enough to accommodate vehicles. This will assist with online sales as a big part of their turnover sees buyers making decisions via the web without visiting the garage. The balance sheet looks good with Retained Profits of £205k and £780k of Net Assets. Presumably much of the latter was tied up in stock and equipment. The business is also diversifying into the conversion of VW vans. One small concern was that the borrower had a £9k default against his name from 4 years ago but this was claimed to be due to them being the victim of a credit card fraud and wasn't enough to deter me investing for a return of 13% pa.

ThinCats

Lent to Date: £448,030,000.

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 from the North West requested >£865k to extend by 2 months the bridging loan they already have with I&F as they await planning permission to convert a former office block into 21 apartments. The loan was due to be refinanced via development funding at the start of May but a request to add 3 further dwellings on the roof had been rejected by the planners hence the delay. Existing investors had the option to continue for a return of 7.5% pa although, rather than being paid out, the interest accrued so far has been added to the amount borrowed increasing the LTV from 63.5% to 65.6%.

LendingCrowd

Lent to Date: £57,995,336 – increase of £669,780 (1.17%) in the past fortnight.

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

Highlighted Loan: Online retailers of sporting goods requested £27k to upgrade their website and buy additional stock. The most recent financial information was from June 2018 when their Annual Profits were only £8k and Net Assets £3k. Although the loan had a Director Guarantee, there was no indication of their Net Worth. The return was high at an average of 13.78% pa half an hour before the auction was due to close but that wasn't high enough to tempt me to bid.

Platform News: LendingCrowd have launched their Spring Cashback promotion which has 4 tiers of benefits with £50, £100, £200 and £300 being the rewards when £5,000 to £9,999, £10,000 to £19,999, £20,000 to £49,999 and £50k & over respectively is invested. An additional £50 is available if £10k or more is transferred from another ISA provider.

ArchOver

Lent to Date: £97,749,000.

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

Highlighted Loan: A company that produces software to manage the printing of food and beverage packaging are currently raising £250k to renew their existing borrowing from ArchOver which has been used as Working Capital. The business has high hopes of expansion having announced a tie-up with a German manufacturer of production-line sensors. Security is provided via a charge over the order book however, unlike many loans on this site, this one is not insured therefore investors were offered a higher return of 9% pa.

Platform News: London-based ArchOver have opened a second satellite office in Hertfordshire joining their existing one in Birmingham.

An ArchOver loan secured against a R&D tax rebate is going to have repayment delayed by 8 weeks. During that time a penalty interest rate of 13% pa (instead of 10% pa) will be introduced.

CapitalRise

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

In the past fortnight, investors had the opportunity to contribute to the initial £1.87 million tranche of a £8.07 million facility to replace an existing house in the Home Counties with a development consisting of 10 luxury apartments. The estimated term was 2 years with the loan anticipated to be repaid from sales of the properties. Discussions are already underway to refinance with a Sales Loan if required. The GDV was 67% which made the return of 8% pa a little on the low side.

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 5.3% pa depending on the length of the investment. These figures have reduced by a few tenths of a percent in 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: £169,889,931 – an increase of £2,944,262 in the past fortnight – 1.76%.

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.