October 2019 P2P Lending Platform News Round-up

Totals lent to date (9th October 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £895,200,000

Crowd2Fund - £31,480,000
Funding Circle - £5.4 billion
FundingSecure - £315,581,236
Money & Co - £6 million approx
Rebuildingsociety - £15,800,000
ThinCats - £521,113,000
Invest and Fund - £60 million
LendingCrowd - £66,524,836
ArchOver - £109,904,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.5 billion

Lending Works - £196,130,037

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £895,200,000 - £8.2 million (0.92%) since the last blog.

When this blog was compiled, there were 96 loans in the pipeline with 0 imminently due to be drawndown.

Highlighted Loans: Borrower in Scotland recently raised a total of <£650k across 2 loans as they refinanced bridging loans on 2 convenience stores and one commercial property that they intend to convert into a café. The loan was for 5 years and will be covered by rental income. The plan is to refinance to cheaper borrowing at the end of that period with a proportion of the capital having been paid off via this loan. 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)

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: Following a number of loans for Wind Turbines which have gone bad, Assetz Capital have agreed to refund those who manually invested (ie those not protected by the site's Provision Fund) the full amount of capital plus 2% pa of interest – equivalent to what would have been earnt in a bank account. The payments will come from the Provision Fund although this won't cause it to reduce below the level it was at in March 2019 which is advertised on their website. As one of the affected investors, this seems to be a very generous gesture to me.

Crowd2Fund

Lent to Date: £31.48 million.

Since the last blog, I have received 3 email notifications about new auctions launching on the site.

Highlighted Loan: Interior Designers requested £50k to put toward a marketing campaign. The financials looked good with Annual Profits just under £180k and Net Assets well over £300k. I just wondered what the catch was as the return on offer was very high at 13.5% pa. The only issue I could see was that the business was quite young at only 2 years old and so didn't have much of a track record nonetheless those profits were very high considering customers had only been acquired to date via word of mouth.

Funding Circle

Lent to Date: £5.4 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.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site have expressed concerns over the apparent lack of due diligence that is undertaken. Matters may improve as in its latest update to shareholders, Funding Circle advise that they are lowering their growth forecast due to them tightening their criteria for accepting higher risk loans.

Further concerns are being expressed about the liquidity of the site as the amount of time required to sell loans has been increasing according to those posting on forums – over 100 days seems to be the norm.

FundingSecure

Lent to Date: £315,581,236 at end of August – September figures not yet available.

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

Highlighted Loan: Another pawn broking type loan was listing this week, it was a renewal on £3k that a borrow had drawn down with security provided by a diamond ring. Assuming the valuation was correct, the LTV was low at 37% but the return was high at 13% pa and surprisingly there was no maximum bid limit so I imagine it would have been filled in the blink of an eye.

Defaults: Two of the 6 yachts offered as security against one of my oldest loans (it went live in June 2016) have been sold enabling part of the capital to be repaid. Discussions are ongoing with potential buyers for the remaining vessels. Meanwhile, a claim will be issued against valuers on a property that is being sold for less than the amount lent to the borrower.

Money & Co

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

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

Highlighted Loan: Renowned music producers requested £200k of Working Capital. The Balance Sheet didn't look too encouraging, it was 14 months out of date with Annual Profits and Net Assets much lower than the amount being borrowed at £18k and <£54k respectively. Money&Co will hold a charge over rights to the music that the business has produced although there was no indication of the value of that security. A return of 8% pa was offered.

rebuildingsociety

Lent to Date: £15,800,000 latest figure available.

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

Highlighted Loan: House builders from the South West requested <£80k to provide Working Capital to enable them to go through the required processes to begin their latest development. Both Annual Profits and Net Assets were well in excess of the amount being borrowed while a development loan of £9.2 million from another provider will be drawn down once planning permission is in place. The development will be worth £15.3 million on completion – if all goes well. Due to the range of security on offer, ReBS reduced the maximum rate of return from 20% pa to 17% pa. While this is a high-risk platform, I felt this was quite an attractive loan.

ThinCats

Lent to Date: £521,113,000.

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

Invest & Fund

Lent to Date: £60 million – latest figure available.

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

Highlighted Loan: Property Developers from Yorkshire requested the sixth <£50k tranche of a >£1.3 million loan that is enabling them to convert former offices into 11 apartments. There have been delays to the project due to structural adjustments required to the existing building, some of which required planning permission, and design issues relating to setting up a living space in the loft. As a result, the borrower expects the project to complete some 3 weeks behind schedule but the Monitoring Surveyor thinks 3 months is a more accurate forecast. This seems to be quite a big disparity which is slightly concerning. At least the GDV is not too bad at 61%. Investors were offered a return of 7% pa.

LendingCrowd

Lent to Date: £66,524,836 – increase of £1,076,880 (1.65%) since the last blog.

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

Highlighted Loan: Manufacturers of Cleaning Products required £88k to obtain an international patent and also to refinance an existing LendingCrowd loan. The most recent Financial Information showed an annual loss of <£33k but at least that had improved by £40k over the previous 12 months while Net Assets were also negative to the tune of almost £90k – a deterioration of £30k. Certainly, this is a business that is borrowing to grow as turnover has increased by over £100k so the risk is whether or not the expansion will ultimately return profits. Those willing to take that gamble were offered a return of 11.25% pa.

ArchOver

Lent to Date: £109,904,000.

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

Highlighted Loan: Providers of 1-to-1 maths tuition via the internet to primary school children requested £275k to aid cash flow as their R&D rebate of £395k is taking longer than expected to be processed and schools are only invoiced at the end of each term. These type of loans are very popular as they offer a return of 10% pa and (so far) the rebates have always been paid by the HMRC. Indeed, this loan was fully funded before I had chance to log in.

CapitalRise

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

CapitalRise have listed 2 loans since the last blog.

Highlighted Loan: Property Developer requested the second £15k tranche of a £1.3 million facility to construct 8 apartments in the Home Counties. The latest drawdown is to fund construction work that has already taken place. Repayment will occur when the properties are sold or via refinancing. The LTV is a little high at 69% but the borrower is also providing a Personal Guarantee up to 25% of the total value of the loan. Investors were offered a return of 8.5% pa.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.5 billion – latest figure available.

Returns: The big change at Ratesetter has arrived, interest rates are no longer set according to supply and demand instead the platform determines the going rates according to fees charged when funds are withdrawn – respectively these are 3%/zero fees, 4%/30 days of interest charged and 5%/90 days of interest charged.

There is supposed to be still a way for investors to set their own rates either by going lower to get their funds allocated faster or high to earn more once they reach the front of the queue but I was unable to find it during a brief look around the site today.

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: £196,130,037 – an increase of £2,030,211 (1.05%) in the past fortnight.

Returns: 5.0% pa and 6.5% pa depending on whether or not investors require quick access to their funds 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.