P2P Lending Platform News Round-up (9th June 2016)

Totals lent to date (9 th June 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £115,668,173

Funding Circle - £1,311,874,480

FundingKnight - £30,712,000

FundingSecure - £43,787,893

Money & Co –  £6 million approx

Rebuildingsociety - £9,793,871

ThinCats - £174,905,000

Invest and Fund - £1 million plus

LendingCrowd - £4.5 million

ArchOver - £16,862,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000

RateSetter - £1,245,215,174

Lending Works - £28,936,466

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £115,668,173 – increase of £6,122,703 – 5.59% growth.

This has been a close to record breaking month for Assetz Capital with borrowers receiving over £6 million worth of funding. This trend looks set to continue with 44 upcoming loans listed on the site – 4 of these were due to be drawndown when this blog was compiled. This growth trend is underlined by some figures that Assetz Capital have recently released. They report that 40% of their totals lent figure was added in the last 12 months with 20% coming through in the most recent quarter. Also part of the "stats blitz" was data relating to their defaults and losses since lending began on the platform in April 2013. The percentage that has defaulted is 5.75% but, thanks to the high level of security that Assetz Capital demand, there has been a remarkably high degree of recovery which has resulted in losses of just 0.31%.

Highlighted Loan: A producer of electricity from cooking oil is looking to raise over half a million pounds to upgrade their generation plant. The 5 year loan for this established business which also has a couple of other minor income streams has security in the shape of a first charge over a commercial property which, at current market rates, provides a LTV of 52%. Returns are quite low at 8% pa – and I think, rather than investing directly, funds would be better off if they were placed in the Great British Business Account where they would earn 7% pa and be covered by a Provision Fund. The 1% pa reduction in income could be regarded as an insurance payment. A little worryingly, a couple of other loans which were about to be drawndown offered similar rates of return to the one highlighted but didn't appear to offer the same levels of security. One was to a furniture manufacture looking to expand – this was only secured by a second charge of commercial premises plus a personal guarantee – while the other was to a couple of people opening a brand new care home. Although they were experienced healthcare professionals, they had never operated their own business before. Admittedly, both of these loans were for much smaller sums.

Funding Circle

Lent to Date: £1,311,874,480 – increase of £16,365,520 – 1.26% growth.

This has been a very quiet period for FundingCircle with the total lent in the past fortnight half the amount it was 2 weeks previously. The site has reported this blip was due to the Bank Holiday in late May although the one at the start of that month didn't have any impact. Nonetheless, the platform had 44 loan auctions listed when this blog was compiled and so it appears as though things are back to normal.

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:

Loan of £208k to enable builder to service new contracts in London (C risk rating, 11.9% pa return). Borrower had large amount of equity in property which is what attracted me to this loan.

Highlighted Rejected Loan:

Loan of £88.9k to refurbish care homes (C risk rating, 11.9% return): There were no responses to concerns raised over the low turnover in relation to the number of beds on offer. Previously, I was enthusiastic towards healthcare businesses such as this but, having lent to a chain of homes that went bust, I am quite wary. Undoubtedly, some businesses do well in this area but there is no such thing as easy money.

FundingKnight

Lent to Date: £30,712,000 – no increase.

There were 0 auctions ongoing when this blog was compiled.

FundingSecure

Lent to Date: £43,787,893 at the end of May. Monthly growth of £6.7 million (18.11%).

There was more strong growth on this site during May but there is a little apprehension about June as some transactions are being held back until the outcome of the EU Referendum is known.

Highlighted Loans: This site has been offering some really good rates of return recently. After some of my loans were repaid, I was able to invest in a couple of bridging loans which both were offering higher than usual rates of return – 14% pa – as borrowers were in a hurry to raise funds. They were for developments in Londonderry and Wimbledon. Aside from the rates of return, there was nothing exceptional about the loans. FundingSecure's policy is to have a maximum LTV of 70% and both properties were comfortably below that level.

Platform News: A welcome improvement is an indicator of the loans that an investor has already contributed to on the Primary and Secondary Market listing page. For the month of June, the Refer A Friend package has been doubled. The referrer and referee will both receive £50 if the newcomer deposits £1,000 or more.

Money & Co

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

Once again there were no auctions taking place when this blog was compiled. The Evening Standard has reported speculation that one of the platform's shareholders is looking to reduce their holding however the most high profile of these, Nicola Horlick, has denied it is her.

rebuildingsociety

Lent to Date: £9,793,871 – increase of £261,194 – 2.74% growth.

Highlighted Loan: Mechanical &Structural engineers were looking to raise £30k to fund their expansion following the recruitment of a director who has many relevant contacts. Already the orders are coming in. The company are bullish about being able to repay and have only requested a 12 month term. As usual with SME's, profit margins are narrow and this risk is reflected by the 19.07% pa average rate of return.

Platform News: Having been with InvestUp for some months, ReBuildingSociety have now also linked up with OFF3R which lists deals from multiple platforms on a mobile phone app.

ThinCats

Lent to Date: £174,905,000 – increase of £1,555,000 – 0.90% growth.

ThinCats were another major platform to record a quiet fortnight. May be they were also affected by the Bank Holiday. When this blog was compiled, 9 auctions were active although 6 of these were due to end in the next 24 hours (all to the same borrower who was raising funds to replace existing bridging finance for 2 development plots with security offered from 6 existing properties).

Highlighted Loans: Those 6 loans offered returns ranging from 11% to 15% pa with security provided in the shape of a debenture across all 6 properties plus personal and corporate guarantees. The building project appeared to be very capital intensive as the total being raised was close to £1.5 million.

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 0 auctions taking place when this blog was compiled.

ArchOver

Lent to Date: £16,862,000 – no change although the figure does not seem to be updated

regularly.

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

Highlighted Loan: The most frequent borrower on the site – a company providing credit to SMEs – was raising £150k with an interest rate of 6.25%. This will add to the £4.7 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. The low risk is underlined by the fact that no loans have defaulted on this site.

INVESTUP PORTFOLIO

There were 22 auctions taking place when this blog was compiled. Many were from sites covered elsewhere in this blog – reBuildingSociety, ThinCats and ArchOver – making this a good place to distribute funds from a central location. There was one further loan posted from Crowd2Fund but I felt this had a low rate of return (9%) considering the apparent risk. It was to finance the establishment of a high end beauty salon in Scotland. The proprietor had only been in business for a couple of years. They seemed to be expanding rapidly and had grand plans but there is always the concern over reality meeting expectations.

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. These returns have been adjusted in the past fortnight with the middle and upper rates being decreased and raised respectively – both by 0.2%. Zopa distribute investor's money mostly to unsecured consumer loans.

Ratesetter

Lent to Date: £1,245,215,174 – increase of £21,813,648 – 1.78% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% to 5.9% depending on the length of the investment. These figures tend to fluctuate by no more than a few decimal places.

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: £28,936,466 – increase of £712,285 – 2.52% growth.

Returns: 4.7% and 6.0% for 3 and 5 year investments respectively – the latter reduced by 0.1% a fortnight ago but has now returned to the previously level. 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.