Secret Investor: InvestUp launch Robolending and Archover offers higher returns

InvestUp introduce RoboLending… Assetz Capital launch yet another managed fund – this one features loans secured against property but the target rate of return is only 5.5% pa… Daring investors can now invest via an IFISA wrapper on the high risk/return ReBuildingSociety platform…

Totals lent to date (15th June 2017)

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

LOANS TO BUSINESSES

Assetz Capital - £268,979,246
Funding Circle - £2,388,414,399
FundingKnight - £31,485,000
FundingSecure - £129,858,834
Money & Co - £6 million approx
Rebuildingsociety - £11,500,000
ThinCats - £239,026,000
Invest and Fund - £3 million plus
LendingCrowd - £12,672,061
ArchOver - £37,023,000

PERSONAL P2P LENDING

Zopa - £2,360,000,000
RateSetter - £1,933,671,196

Lending Works - £56,247,770

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £268,979,246 – fortnightly increase of £9,949,967 – 3.84% growth.

When this blog was compiled, there were 75 upcoming loans with 4 imminently due to be drawndown.

Highlighted Loan: A re-bridging loan of >£400k was listed last week. It was to refinance capital that had been used by the Managing Director of an advertising agency to make an investment in a business based in the USA. The agency is profitable and is expected to have generated the cash required to pay off the loan on maturity however that was the plan with the original bridging loan but payments from the borrower's creditors were late being received. A second charge over the family home is offered as security – the first and second charges combined provide a LTV of 62.5%. Furthermore, the borrower is providing a Personal Guarantee for the full amount. A re-bridging loan of this nature is regarded as a riskier investment therefore the return offered is higher than usual for this site at 9% pa although this is lower than many other platforms.

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)

Platform News: Assetz Capital have added another managed account to their portfolio. This one invests funds solely into loans that are secured against properties. It offers a capped return of 5.5% pa which is below the typical return of at least 7% pa for most manually selected loans of this nature that are listed on this platform although it does have the additional security of the discretionary Provision Fund.

Funding Circle

Lent to Date: £2,388,414,399 – fortnightly increase of £45,884,530 – 1.96% growth.

There were 5 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 >£82.5k to a chain of pubs (C risk rating 13.5% pa return). Capital is to be used to refurbish a couple of bars. The borrower had taken out a loan for a similar project 12 months ago since when the balance sheet has substantially improved with profits up 30% to almost £1 million and net assets more than trebled to over £300k.

Highlighted Rejected Loan:

Consolidation Loan of £106k to glass manufacturers (C risk rating 13.5% pa return). While turnover increased in the latest accounts, profits had halved. Also, the proposal says the loan is required to consolidate existing borrowing but no debt is shown on the balance sheet. Furthermore, Net Assets are less than half the loan amount.

Defaulted Loans Update: Only 1 of my loans (out of more than 500) defaulted in the past fortnight. This was to a restaurant owner who has been experiencing cash flow problems for some time. The repayments are 4 months in arrears. Originally, I had only invested £20 in this loan and £13 of that 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.

FundingSecure

Lent to Date: £129,858,834 at the end of May – monthly growth of £10,392,550.

There were 6 auctions ongoing when this blog was compiled.

Highlighted Loan: My £20k of IFISA funds that I allocated to this platform were taking an age to distribute in £75 chunks so I have been on the look-out for a safe haven to put a larger proportion of this sum. One appeared last week. The borrower was raising £587k secured against a substantial rural property. A key factor in my decision was the LTV of 55%. Assuming the valuation was correct, it would take a fairly dramatic crash in house prices to put my capital at risk. To get a 0.5% bonus I invested £5k for a return of 13% pa which is the same amount I invested via CapitalRise for a development in Central London using my IFISA allowance from the last tax year although, on reflection, committing such a large proportion of my savings to one loan just to get £25 in the form of a bonus was probably a little excessive. I think £500 will be my maximum for loans that I feel are particularly safe in future.

Defaults: Some potential buyers for the assets held against my 6 or so defaulted loans seem to have lost interest but Funding Secure are not shy about seeking other buyers when there are delays.

Money & Co

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

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

Highlighted Loan: Take-over funding worth £145k is being sought to purchase a lingerie wholesaler business which has, to date, been run as a hobby by the current owner. The buyer believes there is scope to expand sales into the US market using e-Commerce. Even though things have only operated on a casual basis, the balance sheet is profitable. The borrower believes he can grow this and also has income from other sources thus he will be able to allow cash reserves to increase. This all sounds very promising and investors are offered a healthy return of 10% pa over the 5 year term.

rebuildingsociety

Lent to Date: £11,500,000 – no change in the past fortnight.

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

Highlighted Loan: Beauty product manufacturers were looking to raise £53.3k to expand into the American market. The business appeared to be doing well with a growing list of outlets across Europe but it was concerning that the only security provided was via a Personal Guarantee. Nonetheless, as the business seemed strong, I invested the £30 that had accumulated in my ReBS account for a return in the high teens.

Platform News: ReBS have added the option of investing via an IFISA to their website. Given the high risk nature of this platform, it would take a brave person to allocate their entire £20k annual allowance to this site.

ThinCats

Lent to Date: £239,026,000 – fortnightly increase of £1,355,000 – 0.57% growth.

There were 6 active auctions taking place when this blog was compiled.

Highlighted Loan: TV production company returned to the site for working capital to provide ongoing funding for programme making. This is required because TV channels pay after the content has been delivered. Borrowing in this manner is part of the business strategy and this will be the thirteenth ThinCats loan bringing the total owed to just under £2 million. The prime source of security is from the back catalogue of programmes which have been valued at £5 million, this has been boosted by the post-Brexit referendum weak pound as they operate in an international market. A Personal Guarantee of £500k is also offered. For this tranche of funding, investors have been offered a return of 11% pa with capital and interest being repaid on a monthly basis.

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 who is building a 4 bedroom family home on former farmland returned to the site to raise >£27k. This is the fifth and final tranche of a £448k facility. The latest report from the site indicates there are no issues with all areas having a green status. Investors were offered a return of 10% pa.

LendingCrowd

Lent to Date: £12,672,061 – fortnightly increase of £744,020 – 6.24% 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 only have 24 hours to decide whether to commit to each loan.

Highlighted Loan: An IT Consultant was looking to raise £54k to branch out to offer businesses advice in e-Commerce. Their proposal didn't indicate much experience in the field they were moving into and, looking at their (very poor) website, I didn't feel much inspiration to invest. Those who risked their capital were getting an average return a smidgeon under 10% pa when I assessed the loan shortly after it had appeared on the LendingCrowd site.

Defaulted Loan: The property belonging to the guarantors of a loan to a bridal shop is being put up for sale as part of the IVA. How much is received from the sale will determine the proportion of the £27 I have outstanding that is paid back.

Hopefully it will be quicker to sell than the property belonging to the director of a building maintenance company. That has been on the market for over a year after his business got into trouble although LendingCrowd have only just classed this loan as a loss despite a CVA being set up some months ago. As the borrower is handling the sale rather than LendingCrowd it could be that they are unwilling to lower the price. I have £70 of capital at risk.

Platform News: LendingCrowd have introduced their self-selected ISA which will sit alongside their managed fund. The good news for those investors who have time to analyse individual loans is that my self-select activity is returning 9% pa (albeit not in an ISA wrapper as my allowance for the current tax year has been allocated to another platform) versus 6% pa for the managed account.

ArchOver

Lent to Date: £37,023,000 – fortnightly increase of £1,000,000 – 2.78% growth.

There were 6 auctions taking place when this blog was compiled although 4 of these were to the same borrower.

Highlighted Loan: In my last blog I mentioned that ArchOver had listed one of the riskiest loans I had seen on their site to a facilities management company that had branched out into the installation of solar panels only for the government to withdraw subsidies in this area and they had now further diversified into battery storage. Shortly afterwards, the borrower returned to raise a further quarter of a million and this loan, which brought the total raised via this site to £1 million, didn't have ArchOver's usual high level of security. There was no insurance, only a charge over assets but the return available was much higher than usual for this site at 10% pa although, given switching to battery storage appeared to be something of a calculated gamble for the business, I'd have wanted a much higher return before considering investing. Nonetheless, the rate tempted many and there was no problem with reaching the full amount of funding.

Platform News: ArchOver have announced a link up with dispute resolution firm Escalate who will help their borrowers to recover debt owing to them. This in turn will make it less likely that SMEs will default on their ArchOver loans making this an even safer site for investors.

INVESTUP PORTFOLIO

There have been major changes to the functionality of the InvestUp site as investors can no longer select loans across multiple platforms as the Search tab has been removed. They now have to use a Robo-Lending tool – as AutoBid appears to have been rebranded by the P2P industry over the past few months – which will distribute the funds across the 20 platforms that have signed up with the site.

This at least removes the very cumbersome process of manually moving funds between the platforms that sit under the InvestUp umbrella but as an active investor, I have no interest in handing control to a robot. I had already begun the process of removing funds from InvestUp due to the poor user interface and this initiative has done nothing to change that decision.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £2.36 billion – fortnightly increase of £40 million – 1.72% 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.

Platform News: Following their decision to remove their Provision Fund, Zopa are going to allow their investors to sell loans where borrowers have fallen behind with repayments… but who will buy them? Zopa appear to have dramatically increased the risk level to the customers who trust them with their capital without significantly improving the rate of return.

Ratesetter

Lent to Date: £1,933,671,196 – fortnightly increase of £24,127,930 – 1.26% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.7% pa to 4.8% pa depending on the length of the investment. Compared to a fortnight ago, the former figure is 0.1% lower while the latter has increased by 0.3%.

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: £56,247,770 – fortnightly increase of £3,045,836 – 5.73% growth.

This was a record-nbreaking fortnight for Lending Works.

Returns: 3.3% pa and 4.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. The lower rate has not changed over the past fortnight while the latter has increased by 0.1%.

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.