Secret investor: Crowd2Fund get busier and Lending Works offer investor incentives

Totals lent to date (27th July 2017)

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

LOANS TO BUSINESSES

Assetz Capital - £300,549,205

Crowd2Fund - £4,000,000
Funding Circle - £2,486,319,357
FundingKnight - £31,485,000
FundingSecure - £140,327,383
Money & Co - £6 million approx
Rebuildingsociety - £11,600,000
ThinCats - £243,725,000
Invest and Fund - £3 million plus
LendingCrowd - £14,678,846
ArchOver - £41,297,000

PERSONAL P2P LENDING

Zopa - £2,480,000,000
RateSetter - £1,999,256,393

Lending Works - £60,377,558

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £300,549,205 – fortnightly increase of £4,352,649 – 1.47% growth.

When this blog was compiled there were 78 upcoming loans although none were imminently due to be drawndown.

Highlighted Loan: Property Developer in Yorkshire was looking to raise £1.1 million to add further locations to his portfolio. Security was offered in the shape of a second charge over an apartment block. The first and second charges, when combined, gave an LTV of 66%. The borrower was also reported to have a net worth of £22.5 million. Investors were offered a return of 8% 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:

Quick Access Account (3.75% pa)

30 Day Access Account (4.25% pa)

Property Secured Investment Account (5.5% pa)

Great British Business (7% pa)

Green Energy Income Accounts (7% pa)

Crowd2Fund

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

There were 4 auctions added to the site in the past fortnight. As loans are listed for 30 days, only recent additions are noted in this blog.

Highlighted Loan: Luxury cake makers were looking to raise £101k to fund upgrades to their premises and production machinery. They were also looking to consolidate existing debt. The balance sheet suggested that the loan could be serviced over the next 4 years. A return of 10% pa was offered – this tempted many as 60% of the capital had been raised soon after the loan appeared.

Funding Circle

Lent to Date: £2,536,872,019 – fortnightly increase of £50,552,662 – 2.03% growth.

This is the first time Funding Circle have lent more than £50 million since May although they have never been more than £5 million away from that level since the Spring.

There were 4 auctions ongoing when this blog was compiled although, as loan requests tend to fill in a matter of hours on this site, that is not a fair reflection of throughput.

Secret Investor's Activity: This is one of the sites which I have the most exposure to -because they have the largest number of manually selectable loans.

Below are highlights from my activity over the past fortnight:

Highlighted Loan Invested in:

Expansion Loan of >£157k to an off-license and grocery store (E risk rating 21.6% pa return after purchase). I have seen very few C, D or E rated loans in the past few weeks and the ones I spotted didn't appeal (see below) so I had to venture into the Secondary Market. This loan was required to extend the shop. The business was returning >£40k profits therefore much of that will be taken up servicing the debt over the next 5 years but hopefully returns will increase with the additional floor-space and the net assets more than covered the amount being borrowed. There are risks with this loan but look at the return…

Highlighted Rejected Loan:

Working Capital and Growth Loan of >£53k to recruitment company (C risk rating 12.5% pa return). Not enough detail was provided. The proposal was no more than these 6 words… "Working capital and growth. Recruitment company"

Defaulted Loans Update: Last week a loan to an online retailer was defaulted but there didn't seem any need to do so. Although the company was dissolved 12 months ago one of the guarantors has been making repayments every other month with the intention of settling the debt in full. Funding Circle's policy on when to trigger defaults seems quite random. Having invested £80 at the end of 2014, I now have £23 outstanding.

Another 3 loans defaulted today. These were to civil engineers, gas fitters and electrical engineers. All the businesses have become insolvent. My exposure across this trio of borrowers totalled about £80 – not a good day.

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 site is planning a relaunch at some point in the future.

FundingSecure

Lent to Date: £140,327,383 at the end of June – this figure is updated on a monthly basis.

There were 6 auctions ongoing when this blog was compiled.

The Pitfalls of Multiple Tranches: Although there have been lots of loans listed on the site this week, many have been renewals or subsequent tranches of existing loans. I find multiple tranches particularly tricky as there is no indication of whether I have made investments in earlier tranches without checking all of them. I have made a few errors and found myself doubling up on my exposure to certain borrowers. Nowadays, I only invest in initial tranches.

Defaults: FundingSecure are hopeful that contracts will soon be exchanged on the land held as security against one of my seven defaulted loans.

Money & Co

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

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

Highlighted Loan: A borrower was looking to raise >£52k to purchase a minority shareholding in a financial services company that raises equity for start-up firms from High Net Worth Individuals. This was highlighted in my previous blog but has only been 38% funded. May be this is because it was the fourth tranche of funding to this enterprise.

rebuildingsociety

Lent to Date: £11,600,000 – no change.

There were 0 active auction taking place when this blog was compiled. Indeed, things have been very quiet at ReBS over the past fortnight.

ThinCats

Lent to Date: £243,725,000 – fortnightly increase of £1,028,000 – 0.42% growth.

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

Highlighted Loan: The director of a haulage company was looking to raise £465k to buy-out the other 50% shareholder – who happens to be his soon to be ex-wife. Assurances were given that the balance sheet comfortably covers the repayments but I am never comfortable with these "domestic" loans masquerading as business deals. Furthermore, investors were only offered a return of 9% which is lower than the norm for this site.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: A property developer returned to the site for their eighth chunk of funding to construct 8 two bedroom flats. The latest tranche is for >£98k out of a total facility of more than £2.1 million. The project is scheduled to go over budget because of the decision to have a lower ground floor in the building rather than the basement flats originally planned and also there were errors in the design of the roof originally supplied by the Structural Engineer. The latter costs can be covered via insurance but this will take time. To generate the funds required to complete the project, the borrower is selling another property in their portfolio. For the latest capital injection, investors are offered a return of 9% pa.

LendingCrowd

Lent to Date: £14,678,846 – fortnightly increase of £839,360 – 6.06% growth.

There were 0 active auctions taking place when this blog was compiled although several have been listed in the past fortnight. To avoid funds being tied up for too long, investors usually get just 24 hours to decide whether to commit to each loan.

Highlighted Loans: A company providing domiciliary Home Care in the North West was looking to raise >£136k to provide working capital to support a contract with the local council that has recently been expanded. Although the business made a loss in the most recent set of accounts this was explained as being a result of an expensive IT related contract which has been replaced and also due to a bad debt over which court action is being taken. I was therefore happy to invest to achieve a return of over 12% pa.

ArchOver

Lent to Date: £41,297,000 – fortnightly increase of £900,000 – 5.07% growth.

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

Highlighted Loan: Specialist window contractors returned to ArchOver to borrow £300k to enable their expansion plans to continue. This was the third and final tranche to refinance a £1 million facility taken out via ArchOver 2 years ago. Investors were offered a return of 7% pa with security provided by a charge against their Accounts Receivable and the loan is insured by HCC.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £2.48 billion – fortnightly increase of £40 million – 1.64% growth.

Returns: Zopa's 2 accounts offer returns of 3.9% and 6.1% 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: £1,999,256,393 – fortnightly increase of £21,337,525 – 1.08% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.4% pa to 4.8% pa depending on the length of the investment. Compared to a fortnight ago, both rates have increased by 0.8% and 0.2% respectively.

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

Platform News: Ratesetter have released details of 3 borrowers who provided credit to the general public with whom they have had to intervene. As these represent exceptional circumstances, especially in one case where the amount lent exceeded Ratesetter's policy. They have given all investors the opportunity to review their relationship with the platform and, if they are unhappy, sell their holdings without being charged fees – subject to there being sufficient demand from purchasers. This offer is available until 17th August.

Lending Works

Lent to Date: £60,377,558 – fortnightly increase of £2,017,824 – 3.46% growth.

Returns: 4.0% pa and 5.0% pa via an IFISA or standard account for 3 and 5 year investments respectively. These rates have increased by 0.5% and 0.2% as it appears the demand for borrowing is outstripping deposits from investors (see news below).

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.

Platform News: It appears as though Lending Works are looking to increase the funds available to borrowers during the quieter Summer months as they are offering investors £50 if they deposit and lend £5,000 in a week and, as this special offer is going to last for 4 weeks, those with £20,000 available could earn a total of £200 by meeting the criteria every 7 days.

****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.