Mid-February P2P Lending Platform News Round-up

Totals lent to date (13th February 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £716,700,000

Crowd2Fund - £26,060,000
Funding Circle - £4,600,000,000
FundingSecure - £298,990,009
Money & Co - £6 million approx
Rebuildingsociety - £13,200,000
ThinCats - £395,519,000
Invest and Fund - £3 million plus
LendingCrowd - £51,493,056
ArchOver - £91,573,000

PERSONAL P2P LENDING

RateSetter - £3,074,631,508

Lending Works - £153,082,148

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £716,700,000 - £13.8 million growth (1.96%) in the past fortnight.

When this blog was compiled, there were 81 loans in the pipeline with 2 imminently due to be drawndown.

Highlighted Loan: Listed last week, a Property Developer wished to refinance to the tune of <£178k the borrowing on an existing dwelling within his portfolio. Only £102k was outstanding on the old loan but this was to be increased to release equity to enable another property to be purchased. The LTV was 56.49% and, while the return was only 5% pa, I decided to invest as I had some funds on this platform that had not been allocated for some time.

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: £27.01 million – £950,000 growth (3.65%) in the past fortnight.

In since the last blog, I received 4 email notifications about new auctions launched on the site.

Highlighted Loan: Motorcycle dealers in the Midlands required £75k to expand their showroom into the recently purchased premises next door. Individually, the most recent annual profits and net asset figures were not much more than half the amount being borrowed. The loan was Director Guaranteed but as ever with this platform there was no indication of their net worth. A return of 11% pa was offered.

Funding Circle

Lent to Date: £4.6 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. Furthermore, in their latest update to Stock Market investors, Funding Circle have reported that it expected between 3 and 3.8 per cent of loans issued last year to default, higher than an estimate of between 2.5 percent and 3.5 per cent made three months ago.

On a positive note, the platform has been getting praise on forums for their dogged pursuit of recoveries – they have been getting success after 5 years in some cases. Whether they will have the resources to chase the increasing defaults that are currently occurring remains a concern.

Platform News: Funding Circle have updated investor's Summary page. They claim to have "streamlined" the design to make it more mobile-friendly but it takes more effort to dig down into detailed information.

FundingSecure

Lent to Date: £298,990,009 at end of January – monthly increase of £2,748,900 (0.93%).

This site remains somewhat in a state of flux with a reduction in new loans coming in, those that do take some time to fill and there is no sign of the new products that were due to be launched before the end of January although they're still being mentioned in the FundingSecure monthly newsletter.

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

Highlighted Loan: A borrower returned to FundingSecure as they required a £245k tranche of capital (out of a total facility £552.5k) to develop disused barns into a couple of properties. Exit is expected from the sale of these or another item in their portfolio which is currently on the market. Downsides to this were the fact that the properties were located in Northern Ireland, an area which could be thrown into some turmoil by the Brexit negotiations, a main road is due to be constructed half a kilometre from the site and a very high LTV of 70%. Surprisingly, investors were only offered a return of 12% pa instead of the usual 13% pa for this platform.

Defaults: Having appeared to have lost patience with the borrower, FundingSecure have defaulted a series of loans (of which I had invested in two) which were secured against "Park Homes" which are no doubt static caravans. In the months ahead I will find out how good the valuations of these items were.

Money & Co

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

When this blog was compiled there was 1 auction taking place which concerned a £250k loan to a German Property Developer but I couldn't find any further information as a "site maintenance" page appeared every time I clicked on it.

rebuildingsociety

Lent to Date: £13,200,000.

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

Highlighted Loan: Wholesalers of eyewear returned for their second tranche of funding having received a capital injection of £30k in the Autumn to launch a new high-end design. They returned for a further £35k to pay off existing borrowing. There is over £200k offered via various securities but these are quite low grade, comprising of Personal and Corporate Guarantees plus a Second Charge over a domestic property however this is much more than the usual cover offered for loans on this site. For that reason, the maximum bid rate was 12% pa instead of 20% pa.

ThinCats

Lent to Date: £395,519,000.

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

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Property Developers in the Home Counties have been granted a facility of £3.835 million to refinance existing borrowing from Invest & Fund because work on 6 flats they are constructing will not be completed before the current loan terminates on 1st March. Although there is only a couple of month's work left outstanding, the new funding will be for 9 months to allow time for the apartments to be sold to pay off the loan. The first tranche – just over £3 million – opened to investors yesterday. There was no indication of the current LTV but the LTGV was projected to be 63.5%. Investors were offered a return of 9.5% pa.

LendingCrowd

Lent to Date: £51,493,056 – increase of £1,121,060 (2.23%) in the past fortnight.

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

Highlighted Loan: Restaurateurs in London requested £33.2k to consolidate existing debt however there were no loans listed in the existing borrowing section of the financial information and there was no reply when this was pointed out in the Q&A. The most recent data was also very old – July 2017. The last London restaurant I lent to on this site only made 4 repayments before the borrower disappeared without a trace which made me wary of this one before I had even got into the nitty gritty. When I reviewed the loan there had been 569 bids made at an average rate of 11.35% pa.

ArchOver

Lent to Date: £91,573,000 - £1,133,000 growth (1.25%) in the past fortnight.

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

Highlighted Loan: Web developers who supply their products to car manufacturers' dealer networks returned to ArchOver to renew £250k of borrowing as they look to expand their portfolio of clients. With contracts lasting 2 or 3 years, they have a steady income to meet ArchOver's model of providing future revenue as security and, for this borrower, it is currently far more than double the capital being lent. Their income is in Euros but their costs are in GB Pounds therefore they may find themselves in trouble if the worst case Brexit scenario results in a collapse in the UK's currency. Unlike many loans on the platform, there was no insurance against non-payments and so I felt a return of 7.5% pa was on the low side.

Platform News: Although insolvencies are rising in the UK, ArchOver believe it will have little impact on those who invest via their platform due to their detailed credit checking on potential borrowers and the fact that they monitor businesses in some depth while loans are live.

CapitalRise

I have been re-assured over the sizeable investment (sizeable for me at any rate) that I had made in a Property Development in the heart of London via this site. Completion of the works is a few months away with repayment due following sales of the apartments in question however with the uncertainties surrounding Brexit, property prices are likely to be suppressed in the immediate term. I was therefore relieved to learn that the borrower is going to refinance the loan therefore I should not have to wait for sales to occur before receiving my capital and profits.

Platform News: CapitalRise have recently launched a Secondary Market – a Bulletin Board as they call it. They charge a 1.5% commission fee to sellers.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3,074,631,508 – an increase of £34,881,189 over the past 2 weeks – 1.15% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.3% pa to 5.8% 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.

Platform News: Ratesetter report that their IFISA has attracted £175 million since it was launched 12 months ago.

Lending Works

Lent to Date: £153,082,148 – an increase of £2,134,109 in the past fortnight – 1.41% growth.

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.