Secret Investor: Assetz capital lower managed account returns and Lending Crowd develop AutoBid

Totals lent to date (10th January 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £406,300,000

Crowd2Fund - £4,000,000
Funding Circle - £3,100,000,000
FundingKnight - £31,485,000
FundingSecure - £213,095,809
Money & Co - £6 million approx
Rebuildingsociety - £12,000,000
ThinCats - £271,782,000
Invest and Fund - £3 million plus
LendingCrowd - £24,347,916
ArchOver - £58,419,000

PERSONAL P2P LENDING

Zopa - £2,930,000,000
RateSetter - £2,270,976,294

Lending Works – Over £70 million

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £406,300,000

The Assetz Capital website has been updated to enable investors to switch between their Standard and IFISA accounts. As part of this make-over, the Home Page which contains the totals lent to date has been redesigned and the figure is now reported to the nearest £0.1 million rather than to the last pound.

When this blog was compiled there were 67 loans in the pipeline with none imminently due to be drawndown.

Highlighted Loan: Before Christmas, a borrower raised £140k to assist in the purchase of a holiday-let cottage in Scotland. They already have a number of similar investments overseas. While the rental income will only just about cover the repayments, the borrower has a well-paid job in the oil industry but, in my opinion, their situation would become a little precarious should they find themselves out work for whatever reason. The LTV was also high at 70%. All things considered I felt a return of 6.5% pa was on the low side however with the banks' appetite for risk increasing, AC have had to offer cheaper borrowing to remain competitive.

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 investments have been paused due to the lack of available loans meeting the investment criteria.

Platform News: For some time there have been long delays before loan parts are purchased when investors allocate funds to the Great British Business and Green Energy Income Accounts.

In the case of the former, Assetz Capital have made the conscious decision to switch to lower risk loans which offer less return therefore they do not yield enough to meet the criteria to be included in the original version of GBBA. This account is now closed to new funding and has been replaced by a GBBA 2 account which offers a return of 6.25% pa instead of 7% pa.

The lack of throughput of loans qualifying for inclusion in the Great Energy Income Account relates to the cutting of government subsidies for wind turbines. While new investments are suspended Assetz Capital are hoping to open up a new pipeline of qualifying loans which will continue to yield 7% pa at which point the account will open up to fresh capital.

Crowd2Fund

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

Over the past 4 weeks, 14 auctions were added.

Highlighted Loan: An independent school required £120k to create a 6th form. This is one of the most unusual enterprises to raise funds via P2P lenders. The facility is long established and operates from a Victorian manor house which is presumably why their net assets exceed £1 million. The nature of the business should generate regular income (assuming no reputation damaging scandals) and I was happy to invest for a return of 10.5% pa.

Platform News: In the late Autumn, Crowd2Fund launched a campaign to raise £10 million of expansion capital by offering equity in the business. Aside from putting borrowers in touch with investors, the C2F platform also provides small businesses the facility to offer shares in their operations. C2F therefore tried to raise 10% of their capital requirements from their own investors (with the remainder coming from Venture Capitalists) but, just before Christmas when the funding round was soon to close, only 75% of the £1 million target had been raised however they must have been able to spur potential benefactors into action as in the New Year they beat their target by 50%.

Funding Circle

Lent to Date: £3,100,000,000

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: Just after the last blog went to press, a loan to a building company was defaulted because it was more than 90 days in arrears. Only 5 repayments had been made therefore I have lost £75 of the original £80.

Then, during the holiday period, an online retailer's loan was defaulted when it emerged that the director who provided the guarantee had sold their share in the business. The status of the security therefore needs to be reviewed especially as the business requested a 3 month payment holiday starting in December.

Platform News: Funding Circle have revised the projected return for the higher yielding option down to 7.2% pa from 7.5% pa. They say the original figure was what 50% of their investors could achieve but 7.2% pa is the expectation for 65% of their customers. It appears as though they wish to manage expectations.

Funding Circle have announced plans to launch a stock market IPO.

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 in 2018.

FundingSecure

Lent to Date: £213,095,809 – Monthly growth of £12,905,550 (6.45%).

Despite it being the holiday period, during December FundingSecure raised almost £13 million for its borrowers, slightly more than in November.

Today 3 auctions were launched on the site.

Highlighted Loan: Another development loan was listed before Christmas, this one for £130k was to cover the costs of obtaining planning permission to convert buildings at a former airbase into residential properties. The loan will be refinanced via development funding when permission is given. This seems highly likely as a trading estate and housing has already been built on the site. FundingSecure seem to think this is slightly less risky than their usual offerings as the return was 12% pa rather than 13% pa. I decided to risk the last £5k of the Cash ISA that I transferred to FundingSecure with the intention of selling the loan before maturity. Good to have all of the old Cash ISA earning at last although I would prefer to spread my funds far more thinly.

Defaults: A further loan has been defaulted. Rather worryingly, there appears to have been no work taking place on a development in Cumbria that had received several tranches from FundingSecure's investors. There may be a case for FS providing regular reports from monitoring surveyors before funding for additional tranches is requested.

Money & Co

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

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

Highlighted Loan: German Property Developers were looking for £150k to purchase the latest property for their portfolio over which the German equivalent of a First Charge will be held. The company specialises in listed buildings which offer tax advantages to those who buy the completed designs therefore, coupled with the general housing shortage in the country, there is no shortage of buyers. The company had been operating for 9 years during which time they have developed 50 properties with a total value of 15 billion euros. This seemed like an excellent proposition and investors were offered a return of 9% pa.

rebuildingsociety

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

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

Highlighted Loan: An award-winning Cornish hotel was looking to raise >£81k to consolidate existing debt. Although this will undoubtedly help the business, current profits were low and Net Assets £44k in the red. Because a second charge over the hotel was offered as security, the maximum rate of return investors could bid at was 15% pa instead of the usual 20% pa however the valuation was only an assessment from local estate agents rather than the result of a detailed assessment. One to avoid.

Default: The guarantors who supported a loan to a bespoke aerosol company were declared bankrupt before Christmas and so ReBS set their status to defaulted. They have just made a couple of repayments but at least I only had £20 invested.

Platform News: In what is believed to be an industry first, during 2018 ReBS plan to allow the trading of defaulted loans on the Secondary Market albeit at a discount. Buyers of such loans will be gambling on a successful recovery or trying to avoid paying Capital Gains Tax.

ThinCats

Lent to Date: £271,782,000 – more than £10 million was raised over the past 4 weeks.

There were no auctions taking place when this blog was compiled.

Highlighted Loan: A loan of £1.2 million was required by workspace and hot-desk specialists who were expanding on to another floor of an office block. The funds were required to undertake refurbishments. This is a very young company which was only established 2 years ago therefore, due to start-up costs, the current balance sheet has negative values for both profits and net assets however their occupancy rates are impressively high and the projections for future years are very healthy. Nonetheless, with this being such early days in the life of the business I felt a return of 10% pa was a little low.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Just before Christmas I reported that Invest & Fund had restarted providing funding to the Property Developer in Cheshire who had experienced some dramas after the Project Manager was sacked, the police were called in to investigate a possible fraud and a circa £245k cost overrun occurred due to a number of items having been omitted from the original plans. The latest tranche of >£108k – 10% of the total facility – was requested over the Christmas period. Encouraged by the fact that 4 of the new builds have received offers in excess of the original GDV, I&F saw no reason to increase the 9% pa return available to borrowers.

LendingCrowd

Lent to Date: £24,347,916 – fortnightly increase of £883,620 – 3.77% growth.

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

Highlighted Loan: A wholesaler and retailer of seafood from the Home Counties was looking to raise £109k before Christmas to refinance expensive existing debt and to purchase refrigeration units. The benefit to the business would be two-fold – lower monthly repayments and increased stock capacity providing better buying power. The Net Assets comfortably covered the cost of the loan so I contributed at a healthy rate of 13.1% pa.

Platform News: LendingCrowd are planning to introduce the optional facility for repayments from manually selected loans to be automatically re-invested – a hybrid AutoBid system. As the loans on this platform tend to vary in quality, The Secret Investor would rather have idle funds than for an automatic system to put them at risk.

Nonetheless, LendingCrowd have been getting very creative recently. Today they introduced the option for investors to take an income from their managed accounts rather have funds re-investments.

ArchOver

Lent to Date: £58,419,000 – fortnightly increase of £850,000 – 1.48% growth.

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

Highlighted Loan: Subsea engineers were looking raise the third and final £400k tranche of their £1.05 million facility to refinance existing borrowing and provide expansion capital. They have an impressive list of clients with security provided by a charge over their accounts receivable. The loan was also insured by Coface. Investors were offered a return of 7% pa. I had contributed to an earlier tranche.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £2.93 billion – an increase of £50 million over the past 4 weeks – 1.74% growth.

Returns: Zopa's 2 accounts offer returns of 3.7% and 4.5% pa with the latter allocating some funds to riskier loans that offer higher returns.

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

Ratesetter

Lent to Date: £2,270,976,294 – an increase of £38,631,780 over the past 4 weeks – 1.73% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% pa to 5.3% pa depending on the length of the investment. Since the last blog, the first figure has substantially reduced by 1.1% while the latter is 0.2% higher.

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: Over £70 million.

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

Returns: 4.0% pa and 5.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. These are unchanged from a month ago.

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.