P2P Lending Platform News Round-up (11th August)

Totals lent to date (11 th August 2016)

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

LOANS TO BUSINESSES

Assetz Capital – £129,681,275

Funding Circle - £1,408,455,680

FundingKnight - £31,105,000

FundingSecure - £53,186,818

Money & Co –  £6 million approx

Rebuildingsociety – £10,378,581

ThinCats - £186,388,000

Invest and Fund - £1 million plus

LendingCrowd - £4.5 million

ArchOver - £20,277,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000

RateSetter - £1,344,249,521

Lending Works - £32,119,864

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £129,681,275 – fortnightly increase of £440,000 – 0.34% growth.

Having funded £11 million worth of loans in the previous fortnight things have quietened down with the amount lent in the past 2 weeks standing at £440k. When this blog was compiled, there were 55 upcoming loans with 1 imminently due for drawdown.

Highlighted Loan: What appears to be a straight forward bridging loan for a former nursing home that has been converted into 7 flats was listed on the site this week. The loan is for £400k and will replace existing borrowing of a similar nature. A return of 8% pa is offered with an LTV of 68%. Slightly intriguingly the borrower shows no inclination to pay off their debt. I would prefer to invest in one of the Managed Accounts (below) that return 7% pa and are covered by a Provision Fund rather than invest directly for this 1% high amount of income.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across the platform's loans and are covered by a Provision Fund: Quick Access Account (3.75% pa return); 30 Day Access Account (4.25% pa return); Great British Business and Green Energy Income Accounts (both of these offer a return of 7% pa)

Funding Circle

Lent to Date: £1,408,455,680 – fortnightly increase of £25,223,060 – 1.82% growth. The fortnightly average has increased to £25 million - £4 million higher than in July. There were 16 auctions ongoing when this blog was compiled. 

Secret Investor's Activity: This remains the site which I have the most exposure to because they have the largest number of loans listed.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Expansion Loan of £44k to events company (C risk rating, 11.6% pa return). Must admit, there were no outstanding propositions that really caught my eye in the past 2 weeks but this is a profitable business with a good credit rating. Expansion plans can go wrong and, ideally, I would have liked a high rate of return.

Highlighted Rejected Loan: Expansion Loan of £50k to electricity infrastructure business (E risk rating, 18.1% return): The loan was required to meet the demands of a newly won contract however the borrower's credit rating was on the floor and they had recently made a loss.

Defaulted Loans Update: No defaults in the past fortnight.

FundingKnight

Lent to Date: £31,105,000 – average fortnightly increase of £150,000 – 0.48% growth.

There were 0 auctions ongoing when this blog was compiled.

Highlighted Loan: Last week an ornamental plant grower was looking to raise £150k to hire a sales executive. This was an unsecured loan with only personal guarantees offered by the husband and wife directors. In favour of the borrowers, the balance sheet was profitable and the last payment to the previous owner of the company has just been paid so, presumably, funds are available to service this new loan unless circumstances change. On balance, I felt a reserve return rate of 11.5% pa was a little on the low side give the lack of security.

FundingSecure

Lent to Date: £53,186,818 at the end of July. Monthly growth of £3,627,600 (7.32%). Total updated monthly. Due to the start of the holiday period, activity reduced in July but £3.6 million of funding was still distributed to borrowers taking the Total Lent above the £50 million mark.There were 2 auctions ongoing when this blog was compiled.

Highlighted Loan: The site listed quite a large bridging loan for £3/4 million secured by a first charge on a former day centre. The borrower has applied for planning permission to convert the site into supported living flats. They are confident of being granted this but if not, it is expected that the property will be renovated into conventional flats. This uncertainty over planning permissions does generate a degree of concern but at least the LTV is very low at 37% which gives plenty of room for manoeuvre should things go wrong. Given the size of the loan, bonuses of up to 4% pa above the 12% pa base rate were available to well-healed investors.

Defaults: My two unredeemed loans remain in limbo. Still waiting for the funds from the sale of the carpets to arrive while the saga of the Scottish boatyard continues.

Money & Co

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

When this blog was compiled there was 1 auction taking place.

Highlighted Loan: A franchise owner of a well-known fast food chain is looking to raise £310k to finance the first phase of an expansion project which will see them take-over a further 6 restaurants from someone who is selling up and retiring. The borrower has already built a portfolio of outlets. Security is provided by a debenture over assets plus a personal guarantee for the full amount. It does look at reasonably sound investment although the estimated return of 7% pa could be obtained over at AssetzCapital with the additional security of a provision fund.

rebuildingsociety

Lent to Date: £10,378,581 – fortnightly increase of £240,160 – 2.37% growth. There was 1 active auction when this blog was compiled.

Highlighted Loan: A health club & spa was looking raise £50k to fund their expansion plans. The borrower has quite a large amount of debt already with loans from FundingKnight and a private investor. The former loan has first charges over the borrower's assets while investors on ReBS are offered little more than an insured Personal Guarantee although they will be getting returns in the high teens. Apparently, the FundingKnight risk model prevented them from lending the full amount. While the borrower gave assurances that business is booming, I felt this investment was too high risk even with the high rate of returns on offer.

ThinCats

Lent to Date: £186,388,000 – fortnightly increase of £530,000 – 0.29% growth. There were 9 active auctions when this blog was compiled.

Highlighted Loan: One of the highest returns offered on ThinCats this week – but one of the riskiest – was the fourth loan to a property developer who is converting a former hotel into 15 apartments. While this loan has good security in the shape of a first charge over the development site, a company debenture and a personal guarantee, it ranks behind 3 other loans. Furthermore, total borrowing for this project will be permitted to climb as high as 75% of the Gross Development Value. A return of 13% pa doesn't compare well with the 12% pa available on FundingSecure where the current LTV is never allowed to exceed 70%.

Platform News: Due to the ongoing growth of this platform, tomorrow (12 th August)

ThinCats are moving to larger offices in Ashby de la Zouch. As a limited amount of support will be available and a software upgrade is also scheduled for the weekend all auctions have been scheduled to end on Friday so that the website can be "rebooted".

Invest & Fund

Lent to Date: Over £1 million 

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

Highlighted Loan: The latest tranche of a loan to a property developer who is constructing student flats in Wales was listed on the Invest & Fund site today. This is for £64k and is the third drawdown from the £1,006,500 development facility. There appears to be adequate security in the shape of a first charge over the development site plus charges over other properties in the borrower's portfolio. A return of 9.5% pa is offered.

Platform News: Invest & Fund are having a busy summer as they now have 30 loans in their pipeline, up from 6 a few weeks ago.

LendingCrowd

Lent to Date: Over £4.5 million as of the end of January.

This site continues to grow with 5 auctions taking place when this blog was compiled. Loans have quite detailed propositions and most are to SMEs that I wish to invest in.

Highlighted Loan: Subsea cable engineers were looking to raise £210k to purchase equipment to service an upcoming contract. Balance sheet looked good and it is always reassuring to invest in an asset secured loan – this was reflected in the average rate of return at the point when I invested which was 9.5% pa.

ArchOver

Lent to Date: £20,277,000 – fortnightly increase of £600,000 – 3.05% growth.

The site has broken through the £20 million lent mark in the past 2 weeks. There were 0 auctions taking place when this blog was compiled.

Highlighted Loan: The most frequent borrower on the site – a company providing credit to SMEs – recently raised a further £300k with at an interest rate to investors of 6.25%. This will add to the £5 million plus that investors have already lent to the organisation. The return is less than loans on many other sites in this section of the blog but the risks are also much lower as in addition to security via a first, floating charge on the borrower's Accounts Receivable, the loan is also insured.

INVESTUP PORTFOLIO

Despite listing loans from numerous platforms, there were only 9 auctions taking place today. Many were from sites covered elsewhere in this blog – reBuildingSociety, ThinCats and ArchOver.

PERSONAL P2P LENDING

Zopa

Lent to Date: £1.42 Billion – latest figure available.

Returns: Zopa's 3 accounts offer 3.5%, 4.3% and 6.7% pa depending on the levels of access and whether or not they are covered by the Provision Fund. Zopa distribute investor's money mostly to unsecured consumer loans.

Ratesetter

Lent to Date: £1,344,249,521 – fortnightly increase of £24,011,300 – 1.82% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.9% to 5.3% depending on the length of the investment. The latter figure has fallen by 0.4% in the past fortnight and, with Ratesetter charging a 10% fee on income, this pushes actual returns before tax below 5%.  Capital is covered by a Provision Fund. Ratesetter proudly boast that no investor has lost a penny since they launched in 2010.

Platform News: Ratesetter currently offer 4 investment terms – 1 month and 1, 3 and 5 years. The 3 year term is not very popular and so, to simplify their product range, the platform is removing this option from their portfolio in October.

Lending Works

Lent to Date: £32,119,864 – fortnightly increase of £668,619 – 2.13% growth.

Returns: 4.7% and 5.7% for 3 and 5 year investments respectively and are unchanged compared to a fortnight ago. As well as a Provision Fund to cover investor's finances, 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.