Mid-March P2P Lending Platform News Round-up

Totals lent to date (13th March 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £738,600,000

Crowd2Fund - £26,060,000
Funding Circle - £4,600,000,000
FundingSecure - £300,435,609
Money & Co - £6 million approx
Rebuildingsociety - £14,900,000
ThinCats - £395,519,000
Invest and Fund - £60 million
LendingCrowd - £53,908,736
ArchOver - £91,573,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3,134,046,478

Lending Works - £158,816,145

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £738,600,000 - £13.7 million growth (1.89%) in the past fortnight.

When this blog was compiled, there were 90 loans in the pipeline with 2 imminently due to be drawndown.

Highlighted Loan: Property Developers from the North West requested the first >£43k tranche of funding out of a total facility of <£350k to complete the purchase of a site on which they intend to construct 2 dormer bungalows – the rest of the loan will be put towards building costs. The initial LTV will be 36% rising to 58% on completion – the latter is expected to occur in 6 months. Investors were offered a return of 6.5% 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: Since Assetz Capital launched their 90 Day Access Account in the third week of February, £17 million has been invested. The latest addition to their portfolio has a target return of 5.75% pa plus a 1% introductory cashback offer.

Assetz Capital have also announced that they have received £110 million of institutional investment. This is from 3 sources in the UK and Europe. The platform advises that this is good news for retail investors as it will increase the fluidity of the Secondary Market enabling them to access their funds more easily.

Provision Fund to the Rescue: Assetz Capital have covered the capital losses for some of their investors following the bankruptcy of a borrower with whom I had a small exposure via three of the Provision Fund protected Managed Accounts. Fortunately, I hadn't attributed any manual lending to this loan therefore I was fully covered.

Crowd2Fund

Lent to Date: £27.01 million.

In since the last blog, I received 7 email notifications about new auctions launched on the site.

Highlighted Loan: Providers of equipment for people with disabilities returned to Crowd2Fund to raise £160k as they have recently taken over another company and wish to redesign their products so that they can be flat-packed for export. They also wish to pay off some expensive short-term borrowing. Their net profits are not much more than half the amount being borrowed however Net Assets are over £1.8 million although there is no indication as to how liquid these are – presumably they are tied up in quite specialist equipment. Investors were offered a return of 11% apr.

Platform News: Crowd2Fund are looking for partners to help them expand into international markets.

Funding Circle

Lent to Date: £4.6 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. These options are projected to offer returns in the ranges of 4.9% - 5.2% pa and 5.5% - 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 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.

Platform News: Over the past 12 months Funding Circle have seen a £50 million increase in revenue although losses have also increased from £36.3 million in 2017 to £50.7 million last year. The red ink on their balance sheet is claimed to result from their stock market launch and marketing costs.

FundingSecure

Lent to Date: £300,435,609 at end of February – monthly growth of £1,445,600 (0.48%).

When this blog was compiled there were 6 auctions taking place.

Throughput on this site remains subdued as staff focus on resolving the backlog of overdue loans that have built up – many of my borrowers have had final demands issued in the past fortnight. More employees have been taken on to assist with this process along with developing a new range of products.

Highlighted Loan: A borrower in Northern Ireland requested £65k to cover a legal settlement over a disputed land sale. Security was provided via a Second Charge over a property which was due to be sold and, indeed is under offer. The loan is required because the borrower is out of the country which is delaying the completion of the paperwork. The LTV was only 27.5% hence the return was 10% pa instead of the usual 13% pa however there was no indication of why the borrower was overseas and when they would return. Many "certain" property sales on this site have fallen through at the 11th hour.

Defaults: The proceeds of a property sale in Cumbria have been returned to the investors who were exposed to the associated loan, the amount recovered was 35% below the capital lent – very poor.

Money & Co

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

There was one auction taking place when this blog was compiled, this was a £250k loan to a German Property Developer. This was the nineteenth tranche of funding to this borrower who seems to have been the site's only customer since the Summer of 2018. Investors were offered a return of 8% pa even though no financial information was provided.

News reports suggest that this borrower is planning to set up their own IFISA with the help of Money & Co.

rebuildingsociety

Lent to Date: £14,900,000.

There were 5 auctions taking place when this blog was compiled.

Highlighted Loan: A company which supplies technology relating to the management of catering in institutions (schools, hospitals, colleges, etc) returned to ReBS to raise >£53k so that they have the Working Capital to fund NHS contracts which have recently changed resulting in an extension in payment terms of 60 days – they are also looking to increase their sales and marketing campaign. The good news was that the Net Assets of the business were worth well over £1 million, the bad news is that the owner has a default outstanding from a disputed credit card debt which is claimed to be in the process of being resolved. With a Funding Circle loan not scheduled to be repaid until 2021, I thought there were more negatives than positives and so I passed on the 20% rate of return that was offered.

ThinCats

Lent to Date: £413,769,000.

There were 0 auctions taking place when this blog was compiled – it seems to have been a very quiet start to the year on this platform, for retail investors at least.

Invest & Fund

Lent to Date: £60 million – latest figures

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

Highlighted Loan: Property Developers from the South West requested their second >£80k tranche from a >£1.007 million facility as they develop 4 bungalows. The Monitoring Surveyors report that a good start has been made to the project. The Loan to Gross Development Value was 65% and investors were offered a return of 8.5% pa.

LendingCrowd

Lent to Date: £53,908,736 – increase of £1,177,560 (2.23%) in the past fortnight.

On the morning this blog was compiled, 0 auctions were listed.

Highlighted Loan: Estate Agents from the South East requested >£44k to provide Working Capital. Annual Profits more than covered the capital being borrowed however Net Assets were slightly below that level. I invested for a return of 10% pa.

Default: An events management company has a good into liquidation. This is the tenth default I have suffered out of the 149 businesses that make up my portfolio on this platform.

ArchOver

Lent to Date: £91,573,000.

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

Highlighted Loan: A loan with by far the highest rate of return for the platform was recently listed on ArchOver. It would pay 20% pa for the first 6 months of the 2 year term before reverting to a rate of 15% pa although investors wouldn't receive any payments in that initial phase. The £300k of Working Capital was being raised by a company that holds the Intellectual Property to technology related to the railway industry which then sells them across the world. Security was provided by the IP rights to 162 products that have been independently valued for use in the UK alone at c£1.2m and at a replacement value of c£6m. This would obviously reduce if rival companies developed competing items however the proposal advises that the barriers to entering the rail sphere are very high. A big concern was that the business is a subsidiary of the holding company to which the ArchOver platform belongs making me wonder whether there was any pressure to list this loan which doesn't align with the site's usual offerings.

CapitalRise

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

Highlighted Loan: Property Developers requested their first £400k tranche of a £1.3 million facility to enable them to develop 8 apartments in a town to the North West of London. Part of the initial capital injection will be used to pay off the existing debt. The loan has an 18 month term with repayment due to occur after sales have been completed. The borrower will be able to repay the capital and interest after 6 of the 8 apartments have been sold.

Good News: The loan in which I had invested a significant sum a couple of years ago because this was one of the few sites offering an IFISA at that time has been repaid after the development in Central London was refinanced.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3,134,046,478 – an increase of £27,981,707 over the past 2 weeks – 0.9% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.0% pa to 6.0% 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 has been included in the Financial Times' list of fastest growing companies.

Lending Works

Lent to Date: £158,816,145 – an increase of £3,374,754 in the past fortnight – 2.17% growth.

Returns: 5.0% pa and 6.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. These rates have been locked until 5th May.

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.

Platform News: To reduce the number of transactions their systems have to deal with, Lending Works are increasing their minimum investment from £10 to £100.

****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.