October P2P Lending Platform News Round-up

Totals lent to date (3rd October 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £624,100,000

Crowd2Fund - £24,500,000
Funding Circle - £3,800,000,000
FundingSecure - £272,734,609
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £293,779,000
Invest and Fund - £3 million plus
LendingCrowd - £43,782,556
ArchOver - £80,742,000

PERSONAL P2P LENDING

Zopa - £3,670,000,000
RateSetter - £2,775,500,415

Lending Works - £132,714,277

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £624,100,000 - £8 million growth (1.3%) 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: Recently a Property Developer from South Wales required £682.5k to refinance existing borrowing. The prime security was a First Charge on an industrial unit which has a lease in place for the 2 year duration of the loan with a major parcel delivery company. This rental income more than covers the repayments and Assetz Capital were obviously very comfortable with the arrangement as a return of 5.5% pa was offered to investors, one of the lowest rates on their platform. In my eyes, the deal was far riskier than that as it seemed to hinge on the tenant remaining in place – what if they went bust? There was talk that the site would easily be re-let but as the LTV figure was nothing exceptional at 65%, I wasn't tempted.

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 Cashback scheme. All funds invested before 31st October will receive a 1% bonus if they remain on the platform until 20th December. This will double if the capital is still there on 20th June 2019.

Crowd2Fund

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

In the past fortnight, I received 3 email notifications about new auctions launched on the site.

Highlighted Loan: Restorers of high-end Scandinavian furniture required £45k to fund their marketing campaign, upgrade their website and consolidate existing borrowing. Their most recent annual profit and net asset figures, when combined, represented almost two thirds of the amount being borrowed however turnover had more than doubled in the most recent set of accounts to 438k and it was this which clinched my investment for a return of 10% pa. There was a Director Guarantee but no indication of their net worth. This is the usual situation for this site and is the reason this was only the third C2F loan I've invested in.

Platform News: Although little information is provided in relation to the security that backs the loans on this site, Crowd2Fund have increased transparency in other areas by publishing their loan book. This reveals a very low default rate of 1.42% however this is still a very young platform and defaults have only began to be registered in March of this year.

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.

Platform News: Shares in Funding Circle have begun trading on the London Stock Exchange this week.

FundingSecure

Lent to Date: £272,734,609 at end of August.

There were 14 loans waiting to be filled when this blog was compiled. Supply seems to be outstripping demand.

Highlighted Loan: A rare unsecured loan was up for renewal last week. It is 2 years old but I believe there were fewer details in the description compared to when it was originally listed. If it is the person I am thinking of, they are a TV sports commentator who was going to pay off the capital when they won a lucrative contract however the latest updates explain that particular job offer failed to materialise although they have used other income to pay down the amount outstanding from £125k to £91k. Despite the high return of 15% pa, I wasn't tempted to invest as the history tab featured a number of threats from FundingSecure to take legal action in recent months.

Defaults: No new defaults and no recoveries in the past fortnight.

Money & Co

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

When this blog was compiled there was 1 auction taking place which was the 9th tranche of funding to German Property Developers who have been mentioned in previous blogs. Once again, no financial information was provided! Investors who fancied a shot in the dark were offered a return of 8% pa on the £100k loan which was £50k less than their usual capital requirements.

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 and is still waiting to be fully funded!

Highlighted Loan: Eyewear retailer's requirement of >£32k to avoid the need for short-term borrowing was fully funded today. Unusually for ReBS, there didn't appear to be any skeletons in the cupboard. The most recent profits were almost double the amount being borrowed and, while there was no asset-backed security, the director who offered the Personal Guarantee had equity in property of £125k. I invested for a return of 11% pa.

ThinCats

Lent to Date: £293,779,000 – fortnightly increase of £3,371,000 – 1.16% growth.

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

Highlighted Loan: A London-based health food business was looking to raise £312k last week to fund the opening of their 24th outlet having started from scratch in 2004. They have exceeded the criteria set by ThinCats to take out their second loan of the current calendar year from the platform. Nonetheless, their negative net worth was a concern to me and I felt a return of 7% pa was on the low side.

Invest & Fund

Lent to Date: Over £3 million

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

LendingCrowd

Lent to Date: £43,782,556 – fortnightly increase of £362,280 – 0.83% growth.

When this blog was compiled, 8 auctions were waiting be funded on the site. Loans are now listed for a week in most instances instead of 24 hours as was the case in the past. This gives more time for investors to ask questions and allows more opportunity for bids to be made hence bringing down rates for the borrowers.

Highlighted Loan: Installers of artificial grass at domestic properties required £91k to expand its product range. This is the second loan they have taken out via LendingCrowd. Profits were a fifth of the amount being borrowed while Net Assets were half the capital requirements. The loan was both Director Guaranteed and Asset Backed although there was no indication of the value of these (always a negative of this site). As I think artificial grass is going to be a growth area in the future (not literally obviously!) I decided to invest a small amount into this loan for a return of 11.4% pa.

ArchOver

Lent to Date: £80,742,000 – fortnightly increase of £532,000 – 0.66% growth.

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

Highlighted Loan: Providers of Accountancy Software returned to Archover for their third £150k tranche of a £750k facility to fund their expansion plans which includes the provision of Cloud-based solutions. As this involves recurring income through rental of remote I.T. facilities, their business model is ideal for lending via the ArchOver platform which uses future income streams as security with customer payments going into a bank account controlled by them. Investors were offered a return of 8.5% pa.

Platform News: To celebrate the 4th anniversary of the opening of the site, ArchOver are offering £300 of Cashback to those who invest £5k or more during October.

CapitalRise

One of CapitalRise's infrequent offerings recently appeared. This was to provide a £1.5 million bridging facility that refinanced an earlier development loan that had been funded by the site. 6 of the 9 properties in London had been sold and the repayment would occur when all sales had completed. Security was provided via a second charge with a LTV of just over 60%. A return of 9.5% pa was available for the estimated 15 month term.

As I have a large exposure to a similar Development Loan on this site which is due to mature next Summer, I was pleased to see this had filled within two days. Hopefully, my loan will be refinanced in similar fashion when the time comes if necessary.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.67 billion – an increase of £50 million over the past 2 weeks – 1.38% 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.

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

Ratesetter

Lent to Date: £2,775,500,415 – an increase of £31,588,692 over the past 2 weeks – 1.15% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.2 % pa to 6.4% pa depending on the length of the investment. The latter has increased by 0.5% 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.

Platform News: Leaving aside advertising expenditure, Ratesetter expects to break even in 2019 although it may elect instead to make further investments that will pay dividends in the longer term.

Lending Works

Lent to Date: £132,714,277 – an increase of £2,574,233 over the past 2 weeks – 1.98% 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.