P2P Lending Platform News Round-up (22nd September)

Totals lent to date (22nd September 2016)

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

LOANS TO BUSINESSES

Assetz Capital – £148,680,756

Funding Circle - £1,491,523,740

FundingKnight - £31,220,000

FundingSecure - £58,823,018

Money & Co – £6 million approx

Rebuildingsociety – £10,478,701

ThinCats - £195,357,000

Invest and Fund - £1 million plus

LendingCrowd - £6.5 million

ArchOver - £20,277,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000

RateSetter - £1,429,387,060

Lending Works – £34,430,502

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £148,680,756 – fortnightly increase of £6,560,000 – 4.62% growth.

When this blog was compiled, there were 58 upcoming loans.

Highlighted Loan: It's not too often that loans on Assetz Capital offer returns as high as 12% pa but one such proposition was listed on the site this week. This was the first tranche of a bridging loan eventually totalling £2.7 million that will enable a property developer to convert farm buildings into 5 high-end residential dwellings. Although the borrower has worked in the construction industry, this is the first time he has undertaken a project of this nature which means the Gross Development Value of 63% is a little on the high side given the risk of things not going to plan however a Personal Guarantee backed by the family home is also offered. It was good to hear that 3 of the 5 plots have already been sold and the initial groundworks have not found any major issues. I feel there is a good chance that the project will be a success and would have invested if I had the funds available.

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)

The Shape of Things to Come? I have received notification from Assetz Capital that one of their borrowers has appointed liquidators. Most of the stock for their business was imported from abroad and, with the fall in the value of the pound following Brexit, their balance sheet is no longer viable. I had not "knowingly" invested in this loan but when I queried receiving the notification I was advised that £161 of my funds in the Great British Business Account (GBBA) were allocated to this enterprise. It was interesting to see how much of my investment is dished out to any single borrower – this represents just over 1% of my holding in the GBBA and the amount is double my limit when distributing funds manually.

The loan was secured via a second charge over the trading premises and the GBBA is covered by a Provision Fund which hopefully won't be exhausted by too many companies failing post-Brexit.

Funding Circle

Lent to Date: £1,491,523,740 – fortnightly increase of £29,931,640 – 2.05% growth.

A fortnightly average of very close to £30 million makes this one of the busiest periods for Funding Circle however they were trumped in the lending stakes by Ratesetter.

There were 49 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 manually selectable loans.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Expansion Loan of £265k+ to a printing business (C risk rating, 11.9% pa return). A rapidly expanding business with growing profits to match was looking to obtain greater floor space and buy more stock to speed up turnover. Hope their success story continues.

Highlighted Rejected Loan:

Expansion Loan of >£21k to a corporate advisor (C risk rating, 11.9% return): Borrower advises banks and building societies with regards to PPI claims. They have been working from home but wish to set up a pukka office and purchase a car. This seems a very small operation and am surprised it was not given a D or E rating. Also, I would imagine that the banks know how to handle PPI claims by now.

Defaulted Loans Update: I've had one loan default this month. It was one of my earliest, dating back to 2013 although the borrower, who operated in the technology field, had been in financial difficulties for the past 12 months. I had £45 of capital outstanding.

FundingKnight

Lent to Date: £31,220,000 – fortnightly increase of £115,000 – 0.37% growth.

There were 0 auctions ongoing when this blog was compiled.

Highlighted Loan: Engineering company was looking to raise £40k to fund an upgrade of premises and processes. A reserve rate of 11% pa was offered. It is a profitable business although only a personal Guarantee was offered as security and there was no indication of the net worth of the individual. The throughput of loans on this site is too low for me to achieve an acceptable level of diversity but if I was active on FundingKnight, I'd consider a small investment in this loan.

Platform News: Due to a problem with their website, FundingKnight had to take down their secondary market on 26th August. It was only recently restored.

FundingSecure

Lent to Date: £58,823,018 at the end of August.

Total updated monthly.

There were 8 auctions ongoing when this blog was compiled.

Highlighted Loan: Interesting how times have changed at FundingSecure. Their loans used to be for around £20k and secured against assets such as cars or jewellery. They would be fully funded in minutes meaning I would have to ensure I was logged on to the site at the appointed hour to avoid missing out – more often than not the auctions would begin at a time inconvenient to me. Nowadays you can log on to their site at any time and there'll be several bridging loans looking to raise amounts in the high 6 figures and offering returns of at least 13% pa. An example of these is the loan I invested in last week to help with the purchase of waterfront land on Merseyside on which the borrower intends to build a block of flats.

Defaults: There has been no progress on my 3 unredeemed loans. Still waiting for the carpets and domain names to be sold and for the loan to the Scottish Boatyard to be refinanced.

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: £10,478,701 – fortnightly increase of £100,120 – 0.96% growth.

There was 1 active auction when this blog was compiled.

Highlighted Loan: An attractive looking loan for expansion to a commercial interior design business was on the platform this week. The funding of £50k was required to support contracts already in place.

It also seemed to be a well-established business and there were 3 Personal Guarantees, a Company Guarantee plus a Cross Company Guarantee offered as security. I invested for a return of 17% pa with my fingers firmly crossed! (see below)

Loans in Trouble: Due to ill health, one of my borrowers, a newsagent, has not been making repayments. It does appear this loan is on course for a default. Half of the loans I have invested on this site are behind with their repayments which doesn't bode well. Fortunately, my exposure to this platform is less than £1,000 although that is still a fair sum of money to lose.

ThinCats

Lent to Date: £195,357,000 – fortnightly increase of £6,855,000 – 3.64% growth.

There were 12 active auctions when this blog was compiled.

Highlighted Loan: Property developers in Northern Ireland returned to ThinCats to obtain a further £155k to complete the build of 3 bungalows and 2 houses. This brought the total lent to the project by ThinCats investors to £605k which represents 55% of GDV. The development is expected to be completed shortly and then the properties will be sold over the next 9 months with repayment made at that point. Should anything go wrong then this loan ranks behind the earlier funding. Representing this higher risk, investors were offered a return of 14%.

Platform News: Since ESF Finance took over and injected a large amount of capital into ThinCats, resources have been available to review the Sponsors who bring loans to the site. A couple were found not to be performing enough due diligence and got axed. In some cases, ESF have become Sponsors themselves although ThinCats provide assurances that there is no conflict of interest as the team who undertake this role are separate from the ThinCats employees who are concerned with the welfare of lenders.

Invest & Fund

Lent to Date: Over £1 million

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

Highlighted Loan: The first tranche of a loan to a property developer who is converting a former farm to several residential units is listed on the site at the moment. This £1.6 million drawdown (out of a total of £2.4 million) will refinance the project as it currently stands. The current lender no longer wishes to be involved which is something of a concern as no explanation was provided. Given this doubt, I thought the interest rate of 9.5% pa was on the low side although security was provided by a first charge over the development plus a Personal Guarantee. A small cost overrun/completion guarantee of £100k is also in place.

Platform News: Invest & Fund have once again emailed investors to advise that they have 30 loans in the pipeline.

LendingCrowd

Lent to Date: Over £6.5 million as of the end of September – this represent £2 million-worth of growth since January.

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

Highlighted Loan: The owners of an industrial estate were looking to raise £104.5k to undertake refurbishment work. The units have a high occupancy rate – this was confirmed by having a quick "virtual drive" around the site via Google Streetview – and the business appeared to be very stable therefore I decided to invest for a return of just over 11% pa. This was some 2% above the average for this loan but, even using that strategy on this site, my bids usually are accepted.

ArchOver

Lent to Date: £20,277,000 – latest available figure.

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

Highlighted Loan: What appeared to be a riskier than usual proposition for this site is listed at the moment. This was to fund the marketing of a piece of software that will analyse big data. Although the business appears to have a reasonable amount of diversification, this particular product seems to be in direct competition to huge conglomerates such as IBM. I would have expected a higher rate of interest than 6.75% pa to be offered. As is usually the case for this platform, security is provided via a first, floating charge on the borrower's Accounts Receivable and the loan is also insured.

INVESTUP PORTFOLIO

Despite listing loans from numerous platforms, there were only 10 auctions taking place today. All of these 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 3.3%, 4.1% and 6.5% 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: £1,429,387,060 – fortnightly increase of £31,995,828 – 2.29% growth.

This fortnight Ratesetter has outstripped FundingCircle for growth by a significant margin.

Returns: Interest rates are set according to supply and demand. They currently range from 3.0% to 5.1% depending on the length of the investment.

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: £34,430,502 – fortnightly increase of £942,794 – 2.82% growth.

Returns: 4.2% and 5.2% for 3 and 5 year investments respectively. These returns have both reduced by 0.1% over the past fortnight.

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.