Investors are still considering the likely impact of Funding Circle's decision to introduce pre-determined interest rates later this month. Many are considering switching their funds to other platforms but, the fact remains, FC offer far more loans – and therefore a greater spread of risk – than anyone else.

Totals lent to date (17th September 2015)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £80,289,483
Funding Circle - £819,427,480
FundingKnight - £23,666,500
FundingSecure - £12,715,004
Money & Co –  £6 million approx
Rebuildingsociety - £7,659,885
ThinCats - £126,927,000
Invest and Fund - £1 million plus
LendingCrowd - £1.25 million plus
ArchOver - £7,050,000

PERSONAL P2P LENDING

Zopa - £1,050,000,000
RateSetter - £786,490,694

Lending Works - £13,945,446

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £80,289,483 – more than £80 million worth of loans have now been funded through the platform.

8 loans currently require funding with returns between 6.5% to 18%. A further 12 are upcoming.

3 managed accounts protected by provision funds with returns of 3.75% to 7% depending on accessibility.

Highlighted Loan: Since the last blog a fortnight ago, only one upcoming loan has been added to the site. This is disappointing, especially as it would be good to have alternative avenues available with the ongoing uncertainties over at Funding Circle.

Furthermore, I have some concerns about the single offering that has appeared which is to raise close to £1 million to finance a couple of housing developments in the Scottish Borders. According to the Credit Report, the borrower has a small CCJ against them and the loan will only be paid off when the final property is sold which is a deviation from the norm for Assetz Capital. A return of 11% pa therefore didn't tempt me although the LTV (after the final sale) is a little over 50% and security is provided by 3 propertiess/development projects, a piece of land plus a personal guarantee.

Platform News: It seems as though Assetz Capital are launching a new product every other week. Hot on the heels of the Great British Business Account comes the Quick Access Account (QAA) which does exactly what it says on the tin – it allows investors quick access to their funds. Under normal circumstances withdrawn cash will be available instantly thanks to a substantial cash balance that will be held as part of the account. From the comments Assetz Capital have made on various forums, "normal circumstances" is a legal term and it would take an extreme situation for this not to be the case.

This quick access comes at a price however and interest rates are 3.75% pa – this will be reviewed on a monthly basis. Currently the return is little more than half the rate of the other accounts the platform has available and well behind the potential returns of directly investing into loans listed on the site however the QAA does have a provision fund.

Ready availability of funds to this level within P2P lending is unheard of and, as I require cash to be readily at hand in case my Buy to Let properties require maintenance, this is something I will consider investing in beyond my regular P2P strategy.

Probably the best feature of the account is that the software has been designed to hold funds waiting to be assigned to loans thus resolving one of the biggest bug bears of P2P lending where capital is sitting idle waiting for loans to become active. My unallocated funds on this site have already been placed in the QAA.

Funding Circle

Lent to Date: £819,427,480 – since my last report on 2nd September Funding Circle have exceeded the £800 million lent landmark. £25 million has been allocated in the past fortnight which is surprising as the number of loans listed on the retail portal has been little more than half the usual levels. Presumably the additional capital has come through institutional investors funding whole loans.

Currently 39 loans are available across 6 risk bands (with minimum rates of 6% to 18.2% before fees and defaults)

With actual default rates being not too different across the 6 risk bands on this platform, I made the decision some time ago to only invest in loans offering returns of 12% pa or more (although I have occasionally dipped a little below that to bid on A+, A, and B rated businesses that had circa 11% pa available due to the amount of capital they wanted to raise).

There have not been many loans listed offering the sort of high returns that I am looking for in the past fortnight and I have had to resort to buying a few E rated loan parts from the secondary market but I resent having to pay a premium for these to the "flippers" – those who immediately flip their winning bids to the secondary market to make a quick buck.

I have cash from repayments building up in my Funding Circle account, I'm contemplating moving it elsewhere but things are a little in limbo at the moment on this platform and it may be best not to get too hasty and see how things develop. Hopefully the number of loans will increase once the pre-determined interest rates are introduced at the end of the month. No doubt borrowers are holding back posting their requests hoping to get better deals once the auction facility is decommissioned. What will happen when loans are not fully funded at the lower rates has not been explained.

Platform News: This evening (17th September) Funding Circle CEO, Samir Desai, meets investors face-to-face to discuss the forthcoming changes that will see the platform switching away from auctions to pre-determined interest rates. With 30% of lenders set to be worse off according to the site's own figures, he can expect a frosty reception.

FundingKnight

Lent to Date: £23,666,500 – growth of £955,000 (4.2%) since 2nd September. This increase is more than double that recorded during the previous fortnight which, again, is very surprising as offerings on the retail portal have been limited. It has to be assumed the rapid increase was due to institutional activity.

Just one loan was added to the site this week. This was to raise £50k to service the growing order book of a building materials supplier. The loan is backed by personal guarantees of the two directors. There is a reserve interest rate of 13% pa which is quite a good return, if only the site had more loans like this.

FundingSecure

Lent to Date: £12,715,004 – Figures are updated monthly. The last two months have been record breaking and the steady stream of loans appearing almost daily leads me to believe the September will follow that trend.

There is 1 active loan on the site at the moment but several are under review.

Highlighted Loan: The one problem with this site is that the loans for smaller capital amounts fill up very quickly making it difficult to spread my capital over as many loans as I feel prudent. Recently a car owner wished to raise £10,000 secured again a Maserati saloon valued at £14,000. The borrower had previously paid back a loan of the same amount which increased confidence and a return of 13% pa was available. I was ready and waiting when the loan went live one afternoon at 5 pm. It was already a few percent funded when it appeared as I refreshed my browser and by the time I had opened up the loan's page the funded proportion had shot up to 41%. After my investment had been confirmed the figure was 91% and reached 100% shortly afterwards. The capital had been raised in little more than a minute! Good news for the borrower but frustrating for investors who were unable to access the site at that time.

Platform News: Like many other sites, FundingSecure have introduced a referral scheme where both referrer and the new lender earn £25 when the person who was introduced has loaned out a minimum of £1,000. This is very welcome but the rewards on offer are only half as good as those currently received from Funding Circle.

Money & Co

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

Two loans are available for investment on this site.

Highlighted loan: A light aircraft engine refurbisher is looking to raise £317,000 to refinance existing debt. Security is provided by a debenture and returns over 9% pa can be expected.

rebuildingsociety

Lent to Date: £7,659,885 – increase of £95,000 since 2nd September.

Highlighted Loan: A training services provider is refinancing a loan to improve their hospitality facilities to attract further business. Their proposal was very well written with great honesty. They are looking to raise £150,000 and offer investors a return of just under 20% pa. Personally, rebuildingsociety is not a platform I have invested in but if they keep attracting loans of this nature I may be tempted.

ThinCats

Lent to Date: £126,927,000 – statistics were last updated on 1st September. 

14 loans are available to invest in.

Highlighted Loans: The management team of an East Anglian coach operator have reached agreement to buy out the current owners. They are looking to raise almost £1 million via Thin Cats across 4 loans with varying repayment schedules of up to 3 years. Returns from 9% to 14% pa are available with security from a debenture from the business, personal director guarantees and first charges over vehicles & property.

Platform News: As part of the software upgrade that Thin Cats expect to implement at the end of September they plan to change the fee structure on their secondary market to a simpler system. Currently the seller pays a fee of 1% of the transaction value on a successful sale. There is a minimum fee of £25 and a maximum of £75. They intend to change to a simple 1% flat fee with no minimum or maximum. This will make it cheaper to sell small loans but more expensive to sell large ones.

They have also issued a statement that makes reference to "another site" switching to pre-determined interest rates – we all know who they are! – and re-affirmed the Thin Cats commitment to allowing investors to determine their own returns. There has been speculation on a number of forums that the reason Funding Circle are ditching the auction system was because their IT infrastructure couldn't handle the number of small £20 bids being made (although Funding Circle themselves have never used this as an explanation). Thin Cats pointedly mention that having a high minimum bid rate of £1,000 prevents their auctions from causing system capacity issues however, as I am a particularly "Skinny Cat", that minimum is about 10 times more than I would wish to investment in any single loan. Using the rule of thumb which recommends assigning no more than 1% of capital to a single borrower, the not so Thin Cat platform bars shrewd investors with portfolios below the £100,000 mark.

Invest & Fund

Lent to Date: Over £1 million

3 very similar loans to property developers are available with returns ranging from 10.5% to 11% pa.

LendingCrowd

Lent to Date: Over £1.25 million in total

There are currently 4 loans available.

Highlighted Loan: An online boiler replacement business in Scotland is looking for £40k of expansion capital. After 24 bids the average interest rate is a promising 13% pa.

ArchOver

Lent to Date: £7,050,000 – an increase of £795,000 since 2nd September.

Highlighted Loan: A company providing finance to legal aid businesses is looking to raise between £75k and £150k. Interest rate is low compared to other sites at 6.5% but in addition to security via a first, floating charge on the borrower's Accounts Receivable, the loan is also insured. This is the only platform we report on which offers insurance on loans hence the lower return due to the lower risk.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.05 Billion – an increase of £30 million (2.94%) since 2nd September.

Returns: Interest rates are 3.8% to 5% depending on the length of the investment.

Capital is covered by a Provision Fund

Ratesetter

Lent to Date: £786,490,694 – an increase of almost £21 million since 2nd September.

Returns: Interest rates are set according to supply and demand. They currently range from 2.9% to 6.1% depending on the length of the investment. The rates on shorter term investments are down when compared to 2 weeks ago but the returns on 5 year loans are higher.

Capital is covered by a Provision Fund. Ratesetter proudly boast that no investor has lost a penny since they launched in 2010.

Because rates are set according to supply and demand certain cycles have been identified by sharp-eyed investors. The monthly cycle sees the best returns around the 25th of the month. Within this trend, rates also vary on a weekly basis. They rise during the weekend and into Mondays and tend to be at their lowest ebb on Wednesdays and Thursdays.

Lending Works

Lent to Date: £13,945,446 – an increase of £0.75 million since 2nd September.

Returns: 4.8% and 6.1% for 3 and 5 year investments respectively – returns on the longer investments have reduced slightly in the past fortnight.

As well as a Provision Fund to cover investor's funds, 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.