Secret Investor: ArchOver launch new loans against R&D reclaims and Assetz fix software bugs

Totals lent to date (21st February 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £433,500,000

Crowd2Fund - £4,000,000
Funding Circle - £3,200,000,000
FundingKnight - £31,485,000
FundingSecure - £220,364,659
Money & Co - £6 million approx
Rebuildingsociety - £12,200,000
ThinCats - £274,579,000
Invest and Fund - £3 million plus
LendingCrowd - £26,798,176
ArchOver - £60,439,000

PERSONAL P2P LENDING

Zopa - £3,050,000,000
RateSetter - £2,348,516,062

Lending Works – £92,026,013

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £433,500,000 - £7.6 million growth (1.78%) in the past fortnight

When this blog was compiled there were 71 loans in the pipeline. None were imminently due to be drawndown.

Highlighted Loan: An entrepreneur was looking to raise £90k to set up a new business venture. Security was provided by first charges over two industrial units which provided a LTV of less than 30%. Borrower was previously a director of a company that was placed into administration a couple of years ago hence they couldn't obtain finance via the High Street banks. Balanced against that risk are the units held as security which are occupied by long-term tenants who pay a rent that comfortably covers the repayments. The success of the new enterprise the loan is being used to seed will have little bearing on serviceability as long as the tenants remain in place. Investors were offered a return of 6% pa.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across different sections of the platform's portfolio and are covered by a discretionary Provision Fund (the target rates of return are in brackets):

Quick Access Account (3.75% pa)

30 Day Access Account (4.25% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Green Energy Income Account (7% pa) – New capital coming into this account have been paused due to the lack of available loans meeting the investment criteria.

Platform News: Assetz Capital have fixed a bug in their software which was preventing payments being made from their Provision Fund when interest payments were missed. In acknowledging this error, the company has donated £1,000 to a charity that supports young entrepreneurs.

Crowd2Fund

Lent to Date: £4 million – latest figure available.

Over the past 2 weeks, 6 auctions have appeared.

Highlighted Loan: A geoconsultancy business was looking to raise £50k to fund additional hardware – they make extensive use of drones – and to undertake a sales and marketing campaign. The most crucial piece of information was found in the latest set of accounts where overall net assets stood at only £12k – too low in relation to the size of the loan for me to consider investing in this company.

Funding Circle

Lent to Date: £3,200,000,000

Funding Circle are unique amongst the major P2P platforms that lend to SMEs in not allowing investors to choose who they lend to. Instead two options are offered which distribute funds across differing risk profiles of loans within their portfolio. These are options are projected to return 4.8% pa and 7.2% pa.

Defaulted Loans Update: Despite significantly reducing my holdings, the defaults keep on coming – last week a loan to a fast food franchise went bad because there had been no repayments since October and the borrower has not been in touch with Funding Circle. Three quarters of my original £40 investment remains outstanding.

FundingKnight

Lent to Date: £31,485,000 – no change.

There were 0 auctions ongoing when this blog was compiled – only 1 loan has appeared on this site in 2017. The platform is planning a relaunch at some point in 2018.

FundingSecure

Lent to Date: £220,364,659 at the end of January. Total updated monthly.

Today 3 auctions were launched on the site.

Highlighted Loan: Property Developer was looking to raise £550k as the first tranche of a facility which will total £1.5m secured against a former mill in the North West. The borrower is in the initial stages of obtaining planning permission to convert the building into apartments. Once consent is given, repayment of the loan will occur if a sale can be made to developers. A spot of Googling found articles in the local press which revealed a strong desire from the area's community for a redevelopment of the derelict site to take place enhancing the likelihood that permission will be granted. The one downside is that the location is a magnet for vandals with fires often being started deliberately so there is a concern over whether they will inflict enough damage to defeat the sales process. As the LTV is 44%, I decided to invest with a view to selling early.

Defaults: A loan secured against a mixed use property in the Midlands was defaulted well before the end of its 6 month term as the borrower had not disclosed the full extent of their debt to other lenders. Nonetheless, the first charge over the property remained intact. This was one of my older investments in which I had only invested a small sum but is a reminder that my new strategy of attributing larger sums with the intention of selling before the 6 month term expires still carries risks of default if FundingSecure miss things in their due diligence process.

Money & Co

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

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

Highlighted Loan: The £50k 9th tranche of funding requested by purchasers of a financial services company mentioned in previous blogs has some fans! It is now 20% closer to being filled having only stood at 7% invested a fortnight ago. There is still no explanation for the need to have these regular capital injections which have taken place over the past year. A return of 8% pa is offered.

rebuildingsociety

Lent to Date: £12,200,000 – no change.

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

Highlighted Loan: Asian-focussed department store in the North of England was looking to raise £26.7k to open a hair salon within their premises. The guarantor is the borrower's mother. The accounts suggested that the business was more than capable of servicing the loan and with the capital requirements fully funded I put in my bid at 14% pa. Probably my lowest rate of return on a ReBS loan but still higher than the other platforms.

One that got away: The bar highlighted in the previous blog which was hoping to attract more popular bands to their recently enlarged venue decided not to take up their loan with ReBS. Presumably, they got a better offer elsewhere.

ThinCats

Lent to Date: £274,579,000 – no change.

There were 3 auctions taking place when this blog was compiled but 2 of these were related to the race track developer from Northern Ireland highlighted in the previous blog.

Highlighted Loan: A fencing business was looking to raise £150k. Rather worryingly this doubles their borrowing as they already have a £75k Funding Circle loan. The new capital injection will pay that off and enable improvements to be made to back office processes while providing working capital to take on larger projects. The increase in debt is a concern and I didn't think the risk justified the return of 9.5% pa that investors were offered.

Invest & Fund

Lent to Date: Over £3 million

No auctions began in the past fortnight.

LendingCrowd

Lent to Date: £26,798,176 – fortnightly increase of £1,134,600 – 4.42% growth.

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

Highlighted Loan: A hair salon that focussed on colouring rather than cutting was looking for £64.2k to branch out into selling their dyes via well-known high street retailers. I would have been happy to invest in this profitable business for a double digit return if they had answered the queries in the Q&A about discrepancies in their financial information.

ArchOver

Lent to Date: £60,439,000 – fortnightly increase of £210,000 – 0.32% growth.

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

Highlighted Loan: Analysers of surveillance footage were looking to raise £400k as an advance on their R&D tax concession to facilitate the continued growth of their business. As this was an unsecured loan, with settlement apparently dependent on HMRC agreeing to a refund, the return offered to investors of 10% pa, although high for this site, didn't appear to match the risk.

Platform News: The new type of loan highlighted above is a recently launched addition to ArchOver's portfolio. These are secured against a R&D tax claim from the HMRC who will pay the amount due, if the application is successful, into an account managed by ArchOver. To qualify for such a loan, the borrowers must have at least a 2 year history of successfully claiming R&D tax credits from HMRC. The company must also have retained professional advisers to help in the preparation of the R&D tax credit claim. These loans have no other security.

ArchOver also plan to launch their IFISA in the next few weeks.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.05 billion – an increase of £40 million over the past 2 weeks – 1.33% growth.

Returns: Zopa's 2 accounts offer returns of 4.0% and 4.6% pa with the latter allocating some funds to riskier loans that offer higher returns.

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

Platform News: Zopa passed the £3 billion lent mark with a third of that figure provided to borrowers in 2017 alone.

Ratesetter

Lent to Date: £2,348,516,062Y – an increase of £22,117,282 over the past 2 weeks – 0.95% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 4.2% pa to 4.5% pa depending on the length of the investment. Over the past 2 weeks these figures have increased by 0.7% and decreased by 0.6% respectively bringing the returns on 1 and 5 year loans very close together.

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: £92,026,013 – an increase of £2,220,791 over the past 2 weeks – 2.47% growth.

Lending Works are another platform who have decided to only quote an approximate value for their totals lent.

Returns: 4.5% pa and 6.0% pa via an IFISA or standard account for 3 and 5 year investments respectively. These have not changed over the past couple of weeks.

As well as a Provision Fund to cover investor's risks, 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.