P2P Lending Platform News Round-up (8th September 2016)

Totals lent to date (8th September 2016)

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

LOANS TO BUSINESSES

Assetz Capital – £142,120,756
Funding Circle - £1,461,592,100
FundingKnight - £31,105,000
FundingSecure - £58,823,018
Money & Co –  £6 million approx
Rebuildingsociety – £10,378,581
ThinCats - £188,502,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £20,277,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000
RateSetter - £1,397,391,232

Lending Works - £33,487,708

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £142,120,756 – fortnightly increase of £11,259,481 – 8.6% growth.

When this blog was compiled, there were 58 upcoming loans with 5 imminently due for drawdown.

Highlighted Loan: A young entrepreneur from the Midlands was looking to raise £90k to purchase a pub. The borrower already has a number of businesses in the local area and, while the LTV for the loan to buy the pub is at the top end of the scale at 70%, Assetz Capital have taken income from the borrower's entire empire to determine whether the repayments could be afforded. This analysis was very detailed and gave me the confidence to invest for a return of 8% pa.

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: £1,461,592,100 – fortnightly increase of £23,638,540 – 1.64% growth.

The fortnightly average of £29.5 million is almost £6 million lower than the previous fortnight.

There were 18 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 £21k+ to a local retailer (C risk rating, 11.9% pa return). A convenience store is looking to raise funds for refurbishments having won a contract to become a newsagent. I am quite fond of smaller loans of this nature as the sums involved could reasonably be paid over time if the borrower found employment should their business fail.

Highlighted Rejected Loan:

Cash Flow Loan of >£47k to design agency in the music and fashion industries (C risk rating, 11.9% return): Borrower states that they have cash flow problems due to Brexit issues but does not explain what they are. If it is due to the pound's loss in value causing reduced income from international trade then this situation could last some time so things could go from bad to worse for the business. I did wonder if they were jumping on the Brexit bandwagon and the root of the problem was elsewhere.

Defaulted Loans Update: As I forecasted in the last blog, the borrower that had ceased trading has now been set to a Default by FundingCircle. They only owe me £13 however. This has been the only default in the past fortnight.

FundingKnight

Lent to Date: £31,105,000 – no loans completed in the past fortnight.

There was 1 auction ongoing when this blog was compiled.

Highlighted Loan: Suppliers of personalised clothing returned to FundingKnight to raise £75k. This will be used to market and buy stock for an ecommerce website that the company is about to launch. The risk is that the website will not be as popular as anticipated but at least the business is profitable and should be able to service the repayments. The reserve rate was a not unreasonable 10.75% pa.

Platform News: Due to a problem with their website, FundingKnight had to take down their secondary market on 26th August and it still hasn't been restored.

FundingSecure

Lent to Date: £58,823,018 at the end of August. Monthly growth of £5,636,200 (10.6%).

Total updated monthly. During August, activity returned to the level it was at prior to the Brexit vote and the site has recorded its third busiest month on record. As many of the transactions on this site are to fund bridging loans, reports that the weak pound has made the UK property markets more buoyant thanks to incoming capital from abroad may have boosted confidence.

All this good news has tempted me to switch funds over from Ratesetter to this site.

There were 10 auctions ongoing when this blog was compiled.

Highlighted Loan: There were a few property developers in a hurry to obtain funding last week so a number of loans offered bonus interest rates to those able to commit large amounts of capital and even the base rates were increased from 12% pa to 13% pa. One such deal was a bridging loan to the owner of a commercial property in Bradford who was looking to undertake a programme of renovation. The loan was for £80k but a bank had a first charge of £200k however, as the building was valued at £450k, this still provided an LTV of 62.2%. The borrower expected to repay the loan through the sale of other properties – ideally I would've liked there to have been details of these properties with information as to when they are likely to be put on the market if they weren't already. Nonetheless, a return of 13% pa on a secured loan was too tempting to turn down.

Defaults: My two unredeemed loans remain in limbo. FundingSecure have offered the carpets to another potential buyer and the saga of the Scottish boatyard continues with renewed optimism for a refinancing package to be agreed. Meanwhile a third loan has defaulted and the internet domain names held as security put up for sale.

Money & Co

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

When this blog was compiled there were 0 auction taking place.

rebuildingsociety

Lent to Date: £10,378,581 – no loans completed in the past fortnight.

There was 1 active auction when this blog was compiled.

Highlighted Loan: Accountancy practice was looking to raise £50k to pay off an existing short term loan and to fund a marketing campaign. The alleged USP of the business was that they have low labour costs due to employing staff in India but I find it difficult to believe they are the only business in this field to employ such a strategy. Furthermore, although Personal and Cross Company Guarantees were offered, the companies concerned were all very closely linked. The borrower also didn't appear to have much in the way of equity outside his businesses. While ReBS offers returns in the high teens, I decided to give this investment a miss. 

ThinCats

Lent to Date: £188,502,000 – fortnightly increase of £2,114,000 – 1.13% growth.

There were 3 active auctions when this blog was compiled with another due to begin tomorrow (9th September).

Highlighted Loan: ThinCats do like to give their borrowers plenty of time to arrange repayments. This can only be good news for investors as defaults are less likely. One such deal was a bridging loan to renovate 3 properties. This had a 12 month term with interest only payments of 12% pa. This should give ample time for refinancing or sales to occur as the development work is expected to be completed in 3 to 6 months.

Invest & Fund

Lent to Date: Over £1 million

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

LendingCrowd

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

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

Highlighted Loan: Financial advisors who specialise in green investments were looking to raise £104k to consolidate existing borrowing and undertake a marketing programme. Although the loan was to be spread over 5 years, the amount they were asking for was still a third of their annual turnover and their profits were quite low. Furthermore, their focus on green investing seemed limited – I do not believe this to be as popular as it once was. The average rate of return when I checked in on this deal was below 10% pa. I gave it a miss.

ArchOver

Lent to Date: £20,277,000 – no change in the past fortnight although, as loans have completed, this figure may not have been updated.

There was 1 auction 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 £400k with at an interest rate to investors of 6.75%. This is a slightly higher rate than their previous loan on this platform and 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 8 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 3.3%, 4.1% and 6.5% pa depending on the levels of access and whether or not they are covered by the Provision Fund.

Returns on all 3 accounts have been reduced by 0.2% pa in the past fortnight.

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

Ratesetter

Lent to Date: £1,397,391,232 – fortnightly increase of £24,393,412 – 1.78% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.2% to 4.9% depending on the length of the investment. The latter figure has been on a downward trend over the past month but have risen a little today.

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

Goodbye to all that: I've sold up on Ratesetter. The last auto re-investment of my repayments were lent at 4.4% pa. With Ratesetter charging 10% fees on income that gives a net return of less than 4%. With the recent announcement that Ratesetter expect an increase in defaults, I felt the risk-return ratio is not enough. Even though Ratesetter charged a 5.9% selling fee which was hard to swallow, I decided to hit the "Sell" button. The funds are heading towards FundingSecure however they are yet to arrive in my bank account. Since the start of September there have been complaints on P2P Forums of long delays when waiting for funds to arrive from Ratesetter.

Lending Works

Lent to Date: £33,487,708 – fortnightly increase of £690,090 – 2.1% growth.

Returns: 4.3% and 5.3% for 3 and 5 year investments respectively. These returns have both reduced by 0.2% 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.