Mid-May's P2P Lending Platform News Round-up

Totals lent to date (16th May 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £516,800,000

Crowd2Fund - £17,120,000
Funding Circle - £3,400,000,000
FundingKnight - £31,485,000
FundingSecure - £246,359,280
Money & Co - £6 million approx
Rebuildingsociety - £12,400,000
ThinCats - £285,889,000
Invest and Fund - £3 million plus
LendingCrowd - £33,232,596
ArchOver - £66,176,000

PERSONAL P2P LENDING

Zopa - £3,290,000,000
RateSetter - £2,482,409,965

Lending Works - £107,979,354

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £516,800,000 - £7.7 million growth (1.51%) in the past fortnight.

When this blog was compiled there were 62 loans in the pipeline with 1 imminently due to be drawndown.

Highlighted Loan: A mixed-use property in London was offered as security when its owner looked to raise £220k to clear the tax bill that their former accountant had allowed to build up. They also required funds to pay off a loan and to have cash available to purchase a holiday home overseas. The property in the UK's capital is the borrower's only source of income however the loan repayments will still leave a sizeable amount for them to live off. The main risk would be the loss of tenants however the occupant of the commercial unit has been in place for a considerable time while the residential flats are let to an agency that provides emergency accommodation to the housing department of the local council. Another positive factor was the very low LTV of 31.4%. Taking all this into account, it was no surprise that investors were offered a return of 6% pa – still much better than a High Street bank however.

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 (3.75% pa – increased to 4.1% pa from 1st May)

30 Day Access Account (4.25% pa – increased to 5.1% pa from 1st May)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Platform News: Having temporarily halted new capital coming into the Green Energy Account towards the end of last year, Assetz Capital have decided to close it all together as, since the withdrawal of government subsidies for wind farms, the platform has been unable to find loans that meet the eligibility criteria for this account. Existing investments will be allowed to run their course but repayments will not be reinvested.

Crowd2Fund

Lent to Date: £17.12 million – figure not updated in the past fortnight.

Over the past 2 weeks, 3 auctions were listed on the site.

Highlighted Loan: An Italian Restaurant in Scotland required >£53k to refurbish their premises. It had good reviews on Trip Advisor and the most recent profits were not far off double the amount being borrowed. Investors were offered a return of 10.5% 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 return 4.8% pa and 7.2% pa.

As an active rather than passive investor, I am no longer involved with this site however posters on forums report that the number of defaults early in the repayment cycle continues to increase possibly due to the proportion of higher risk loans increasing.

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: £246,359,280 at end of April – monthly increase of £10,623,772 (4.51%).

Today 2 auctions were launched on the site.

Highlighted Loan: A property developer required £145k to complete the construction of a house. They had previously borrowed from the platform to initiate the project but since then funds have come in from another transaction that have enabled the first charge over the site to be paid off therefore the LTV has reduced from 58% to 16%. With that level of security, a return of 10% pa seemed almost to good to be true but I took my chances.

Defaults: No new defaults. Some items of security still appear close being sold but things are moving very slowly.

Wheeling & Dealing: I continue to sell loans where I have invested larger sums (albeit at a discount) suggesting this site's Secondary Market continues to have a fair amount of liquidity.

Money & Co

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

When this blog was compiled there were 3 auctions taking place.

Highlighted Loan: Steel fabricators required £210k to refinance existing debt. Their financial information suggested that, currenttly, the loan could be covered however they indicated that they relied on 3 long-standing customers for the majority of their business. What would happen if one of these relationships broke down? An "indicative" return of 8% pa was offered.

rebuildingsociety

Lent to Date: £12,400,000 – most recent figure.

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

Highlighted Loan: Property Developers required <£256k of Working Capital to undertake maintenance on their rental portfolio. Investors had lots of questions relating to the financial information that had been provided but no answers have been given. As a result, the loan was struggling to reach 30% of the funding requirement. Security was provided by 2 second charges and Personal Guarantees. The maximum bid rate was set at 16% pa.

ThinCats

Lent to Date: £285,889,000 – no change in this figure reported by the platform.

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

Highlighted Loan: Property Developer from the North East required £250k to convert former offices into 6 private residences. The current LTV is just over 70% but presumably the GDV will be much lower. One thing that appealed is that a fixed price contract has been agreed with the builders so, in theory, there should be no unexpected cost overruns. A return of 11% pa was offered to investors.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: An existing I&F borrower requested the first <£298k tranche of a £557k facility. The initial capital advance is to assist in the purchase of a former shoe factory which will be converted into no less than 10 apartments. With a first charge over the property, at the outset the LTV will be just under 65% while additional security was provided in the shape of Corporate and Personal Guarantees. Investors were offered a return of 8% pa and 23 of them had filled the borrower's requirements within 30 minutes of it being listed.

LendingCrowd

Lent to Date: £33,232,596 – fortnightly increase of £1,180,840 – 3.68% growth.

4 auctions came to the site on the day this blog was compiled.

Highlighted Loan: Electrical contractors were looking for £106k to cover cash flow shortages when buying materials ahead of work being undertaken. I have previously bought into loans that had an identical proposition to this, especially when I was active on FundingCircle, and when the work doesn't materialise the borrower cannot pay back the loan. Furthermore, the annual profits were only half the value of the loan and the net assets were little more than that so this was one I avoided. Those who did take a gamble will receive an average return of 10.5% pa.

Default: The loan to a transport company in Scotland was defaulted because the business has ceased trading. It was not unexpected as repayments have been received in fits and starts for sometime plus the borrower attempted to raise additional funding via ReBuildingSociety roughly 6 months ago. On a positive note, over half the capital has been repaid and I only have £30 outstanding. Furthermore, the first instalment of a payment plan has been received.

ArchOver

Lent to Date: £66,176,000 – no change in this figure reported by the platform.

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

Highlighted Loan: Suppliers of CCTV and the associated storage systems required £250k to buy their way out of a factoring contract and also to provide additional buying power when it comes to negotiating the purchase of stock. Security was provided by a charge over the Accounts Receivable and the loan was also insured by Coface. As a result of these safety nets, investors were offered a return of 6.5% pa.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.29 billion – an increase of £40 million over the past 2 weeks – 1.23% 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: £2,482,409,965 – an increase of £25,095,853 over the past 2 weeks – 1.02% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% pa to 5.0% pa depending on the length of the investment. These numbers are little changed from a couple of weeks 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: £107,979,354 – an increase of £3,357,800 over the past 2 weeks – 3.21% growth.

Lending Works have passed the £100 million lent mark.

Returns: 4.5% pa and 6.0% pa via an IFISA or standard account for 3 and 5 year investments respectively. These have not changed over the past month.

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.