Mid-September P2P Lending Platform News Round-up

LOANS TO BUSINESSES

Assetz Capital - £616,100,000

Crowd2Fund - £24,500,000
Funding Circle - £3,800,000,000
FundingSecure - £272,734,609
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £290,408,000
Invest and Fund - £3 million plus
LendingCrowd - £43,420,276
ArchOver - £80,210,000

PERSONAL P2P LENDING

Zopa - £3,620,000,000
RateSetter - £ 2,743,911,723

Lending Works - £130,140,044

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £616,100,000 - £9.3 million growth (1.53%) in the past fortnight.

When this blog was compiled, there were 68 loans in the pipeline with 0 imminently due to be drawndown.

Highlighted Loan: Last week a Property Developer in the South West requested the first £45k tranche of a £475k facility to fund the construction of 2 properties that are designed to be student flats which will then be sold or refinanced at the end of the 18 month term. The LTGDV was 56% with a First Charge over the site plus a Personal Guarantee that covered a quarter of the amount being borrowed. With strong demand for properties of this nature in the area, 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)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Platform News: Assetz Capital have launched a "Refer a Friend" scheme. When the friend has invested £1k, they will receive £50 while the introducer earns £75.

Crowd2Fund

Lent to Date: £24.5 million – latest available figure.

When this blog was compiled, 6 loans were waiting to be filled.

Highlighted Loan: Financial advisors required £128k to upgrade their website. They seemed to big themselves up a fair amount in their pitch. Firstly, they claimed to have 5 million customers but when questioned via the Q&A this turned out to be the number they have access to via a joint venture. Also, the website upgrade reputedly included some sort of Artificial Intelligence but many felt this would be some form of advanced logic rather than a system that had the ability to learn.

Funding Circle

Lent to Date: £3,800,000,000

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 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 amid accusations that they are currently recklessly increasing the size of their Loan Book to boost the planned stock market launch through which they hope to raise £300 million to enable expansion into new areas.

Platform News: Funding Circle's Refer a Friend scheme doesn't seem as attractive as Assetz Capital's similar promotion as it is not invoked until the newcomer has invested £2k – twice the amount AC requires – at which point the referrer and their friend each receive a gift voucher from Amazon worth £50.

FundingSecure

Lent to Date: £272,734,609 at end of August – monthly growth of £6,616,032 (2.49%).

The backlog of loans on this site has reduced from 17 a fortnight ago to 9 today. This could be at least partly due to a reduction in throughput on the site as the number of email notifications I have received for new offerings seems to have reduced.

Highlighted Loan: A renewal of a £1.25 million loan secured against development land in the South West came to the site a couple of weeks ago. This has made regular appearances on the platform as interest was paid every 6 months to keep the facility open as the borrower prepared the site for development. A sale has now been agreed in principal with the buyer now seeking funding. It would have been good to know a little more about the potential purchaser and the likelihood of them being able to raise finance. With a return of 13% pa and LTV below 60% I decided to invest a small amount as if this sale falls through my gut feeling was that a buyer will be found at some point.

A Happy Ending: Like all the best movies, the loan secured against a former cinema had a happy ending. It was due to complete in January but the site has only just been sold. Hopefully, this will boost confidence in FundingSecure as a number of investors have expressed their concerns on internet forums about the amount of overdue loans this site has.

Defaults: Another property sale saw one of my defaulted loans repaid – it has been a good couple of weeks and hopefully FundingSecure can keep the run going.

Wheeling & Dealing: The Secondary Market is still very quiet and I am starting to lose hope of finding buyers...

Money & Co

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

When this blog was compiled there were 0 auctions taking place.

rebuildingsociety

Lent to Date: £13,000,000.

There were 4 auctions taking place when this blog was compiled although the loan to a children's play centre was originally due to end in July!

Highlighted Loan: A company in Northern Ireland required >£67k to refinance existing borrowing. They provide technical services to butchers and also organise trade shows. In the case of the latter, an event staged last year made a loss which has put the business in difficulties. The plans for expansion seemed very ambitious with little substance. A Second Charge over a residential property provided an LTV of 75% and was probably the reason why ReBS set a risk rating of "B" with a maximum bid rate of 14%. With such a poor business case and Second Charges being so difficult to recover, I had no inclination to invest.

ThinCats

Lent to Date: £290,408,000 – no change.

There was 1 auction taking place when this blog was compiled and this was the loan to convert a former pub into a House of Multiple Occupation that was featured in the previous blog.

Platform News: ThinCats have announced a new deal with global asset managers, Insight Investments, which will see this institutional body have exclusive access to lower risk/return loans. In their announcement, ThinCats imply that retail investors are only interested in high return offerings however my opinion is that the throughput on this platform is too low to allow adequate diversification with their riskier borrowers. Insight Investments have agreed to provide up to £300 million of capital and will double the amount lent by the site if it can be fully utilised.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: A Property Developer who is converting a former care home into 13 apartments returned for their fourth >£83k tranche of funding from a £1.089 million facility. Three months into the project, the building works are progressing on schedule. Investors were offered a return of 8.5% pa with the LTGDV expected to be less than 50% at completion.

LendingCrowd

Lent to Date: £43,420,276 – fortnightly increase of £347,340 – 0.81% growth.

This site usually adds loans in the afternoon with the auctions ending at around 11 am the next day however, on the morning this blog was compiled, no such auctions were on the site.

Highlighted Loan: A restaurateur from the South West required £65k to open their second outlet by taking over the tenancy of a public house. The most recent financial figures reported profits that were two-thirds of the amount being raised but, as the borrower was a sole trader, there was no balance sheet to indicate net assets. There was however a hefty amount of other lending to the tune of £288k – far too much to tempt me. When I checked it out, other investors had been bidding at an average return of 9.55% pa on this proposition for which LendingCrowd surprisingly gave an A rating.

Platform News: Although LendingCrowd's Summer Cashback ended on 31st August, eleven days later I received an email about their Autumn Cashback deal… and what a deal it is! The £100 reward now starts for those who invest £2k instead of the previous minimum of £5k. When lending from £5k to £9,999 investors benefit to the tune of £250, this then doubles to £500 at £10k and above. In comparison, the highest amount handed out in the Summer Cashback promotion was £400 which was only available to those who provided £20k or more to borrowers.

Because this is the most generous promotion in LendingCrowd's history, they are only making it available to the first 1,000 investors who are eligible.

ArchOver

Lent to Date: £80,210,000 – fortnightly increase of £1,264,000 – 1.6% growth.

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

Highlighted Loan: A Mechanical, Electrical and Plumbing company that provides services to Property Developers in London's residential sector was looking to raise £300k last week. This is the first loan in a total facility of £800k. The funding will refinance existing borrowing, provide capital to allow their business to grow and also enable plant to be purchased. Security was provided by a charge against future income and the loan was insured by Atradius. Investors were offered a return of 7% pa.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.62 billion – an increase of £30 million over the past 2 weeks – 0.84% growth.

Returns: Zopa's 2 accounts offer returns of 4.5% and 5.2% pa with the latter allocating some funds to riskier loans that offer higher returns. These rates have increased by 0.5% and 0.6% respectively in the past fortnight.

Zopa distribute investor's money mostly to unsecured consumer loans.

Ratesetter

Lent to Date: £2,743,911,723 – an increase of £29,099,414 over the past 2 weeks – 1.07% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.2 % pa to 5.9% pa depending on the length of the investment. These are little changed over 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: £130,140,044 – an increase of £2,046,967 over the past 2 weeks – 1.6% growth.

Returns: 4.5% pa and 6.0% 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.