P2P Lending Platform News Round-up (6th October 2016)

Totals lent to date (6th October 2016)

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

LOANS TO BUSINESSES

Assetz Capital – £152,662,256

Funding Circle - £1,535,278,420

FundingKnight - £31,220,000

FundingSecure - £65,180,968

Money & Co – £6 million approx

Rebuildingsociety – £10,478,701

ThinCats - £198,050,000

Invest and Fund - £1 million plus

LendingCrowd - £6.5 million

ArchOver - £20,277,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000

RateSetter - £1,464,833,220

Lending Works – £35,246,596

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £152,662,256 – fortnightly increase of £3,981,500 – 2.68% growth.

When this blog was compiled, there were 60 upcoming loans with 3 imminently due to be drawndown.

Highlighted Loan: Property developer required £255k to build 3 terraced houses in Wales. However, the company to whom the money is being lent to has been set up in the name of the wife of the developer as he is currently declared bankrupt due to non-payment of VAT. This is blamed on the death of his book-keeper. No mention is made of any accounting procedures that have been put in place since that issue arose. While the project seems viable, the uncertainty over the borrower's husband's financial acumen caused me to believe that a return of 8% pa is too low.

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 Quick Access Account had its first birthday in mid-September.

A Less FIT World: As the Government is withdrawing the "FIT" subsidies to Wind Turbine projects Assetz Capital are having to review their Green Energy Income Account product. They still have over £6 million of loans for Wind Turbine initiatives in the pipeline which will benefit from the FIT programme but in the medium term the Green Energy Income Account seems doomed.

Funding Circle

Lent to Date: £1,535,278,420 – fortnightly increase of £43,754,680 – 2.93% growth.

A record smashing increase of £43 million in the past fortnight. There seems to have been more bridging loans listed on the site which may account for the growth. As they usually offer returns of 10% pa I do not tend to invest in them, I seek returns of circa 12% and above.

There were 9 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 £52k+ to a construction and home improvement business (C risk rating, 11.9% pa return). Loan is required to service a newly won contract and the balance sheet suggested that the loan could easily be serviced. Would have liked more detail with regards to the contract but that rarely happens on FundingCircle.

Highlighted Rejected Loan:

Loan to buy stock of >£250k requested by a drinks wholesaler (C risk rating, 11.6% return): Despite wishing to borrow over a quarter of a million pound the rational for the loan amounted to no more than "We want to buy more stock". For that amount of money, I would want far more detail. The company's website was also very poor with minimal information. Many investors seemed to have the same reservations as me because, for a C banded loan, this took a long time to become fully funded.

Defaulted Loans Update: One of my borrowers was declared insolvent in the past fortnight. The good news is that they intend to repay the loan when payments are received from debtors in the next few months. Hope that happens.

FundingKnight

Lent to Date: £31,220,000 – no change.

There were 0 auctions ongoing when this blog was compiled.

FundingSecure

Lent to Date: £65,180,968 at the end of September. Monthly growth of £6,357,950 (10.8%)

Total updated monthly and has increased by over 10% for the second month in succession.

There were 12 auctions ongoing when this blog was compiled.

Highlighted Loan: Having funded previous growth via Saving Stream, a borrower recently looked to raise £600k on this site to fund the expansion of their holiday park. This bridging loan had a LTV of just over 50% and the plan is to seek refinancing when the 25 additional static caravans are in place. Sounded like a very straight forward arrangement – the weak pound following Brexit should encourage people to holiday in the UK so the caravans can be expected to find occupants. The base rate of return was 13% pa but those with plenty of capital to spare could get up to 17% pa when bonuses are taken into account.

Defaults: Good news! Some of the carpets secured against a defaulted loan have been sold. Given the length of time taken to resolve this issue, FundingSecure generously decided to pay investors the balance of the capital and interest out of their own funds… but as one loan gets recovered, another defaults. The latest was secured against a high-end car. A similar scenario arose earlier in the year and the vehicle in question was sold within weeks so I am hoping for a quicker resolution than that which occurred with the carpets.

I am still waiting for the domain names to be sold and 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 – no growth.

There was 1 active auction when this blog was compiled.

Highlighted Loan: Flooring company was looking for £100k to fund their expansion into the American market. Reports are that demand for their product in the States is very high so things are looking good. The big concern was a lack of security. There were a couple of Personal Guarantees from the Directors plus a Company Debenture although in the case of the latter this seemed of limited value as much of the business' equipment has been bought via Hire Purchase. The loan was ending today and had only raised 22% of the total.

ThinCats

Lent to Date: £198,050,000 – fortnightly increase of £2,693,000 – 1.38% growth.

There were 8 active auctions when this blog was compiled.

Highlighted Loan: A borrower returned to ThinCats to raise further funds for the development of a pub in Yorkshire. This latest injection of capital brings the total to £1.2 million but, once all works are completed, the site is expected to be worth in the region of £2 million. The pub is aiming to be open for business in time for the busy Christmas period. The loan is for 6 months and is interest only with a return of 13% pa which is similar to the deals available over at FundingSecure.

Invest & Fund

Lent to Date: Over £1 million

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

LendingCrowd

Lent to Date: Over £6.5 million as of the end of September.

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

Highlighted Loan: A linen hire business serving the hospitality industry returned to LendingCrowd to raise a further £50k to acquire larger premises. From their responses to investors' questions it was clear how hard they work to meet the needs of their customer. They appeared to be a good company to invest in… so I did.

Saved by the Bell: Before the auction for the linen hire business completed, it was cancelled when LendingCrowd received notification of a winding up order from the HMRC… phew! That was a close call. It is quite scary to think that borrowers are willing to with-hold crucial information such as this and underlines why I am not interest in single digit returns.

To Default or not to Default: Although my LendingCrowd dashboard tells me I have no loans defaulted on this site, the platform is taking legal action against two of my borrowers. I think other sites would have classed these as bad debts.

ArchOver

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

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

Highlighted Loan: Ventilation engineers returned to ArchOver to refinance a £300k loan that they took out in December '14. They require the funds to assist in their continued expansion. A return of 6.75% pa is 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 4 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: £1,464,833,220 – fortnightly increase of £35,446,160 – 2.48% growth.

The £35 million in the past fortnight is a new record for this platform.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% to 5.4% 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: £35,246,596 – fortnightly increase of £816,094 – 2.37% 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.