Secret Investor: Shorter auctions from Lending Crowd, trouble for Money and Co loans

The Secret Investor has opened his FundingSecure IFISA… LendingCrowd reduce the duration of some of their auctions to enable their investor's funds to starter earning income sooner.

Totals lent to date (4th May 2017)

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

LOANS TO BUSINESSES

Assetz Capital - £247,589,760
Funding Circle - £2,244,091,422
FundingKnight - £31,485,000
FundingSecure - £110,720,939
Money & Co - £6 million approx
Rebuildingsociety - £11,400,000
ThinCats - £232,306,000
Invest and Fund - £3 million plus
LendingCrowd - £10,997,981
ArchOver - £32,578,000

PERSONAL P2P LENDING

Zopa - £2,250,000,000
RateSetter – £1,869,918,203

Lending Works – £51,831,225

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £247,589,760 – fortnightly increase of £3,585,550 – 1.52% growth.

When this blog was compiled, there were 69 upcoming loans with 2 imminently due to be drawndown. The pipeline seems to be growing, the number of upcoming loans used to be in the low 50s.

Highlighted Loan: A borrower who has won a contract to supply manpower and plant to help in the construction of the Hinkley Point C Power Station requested £150k to enable a property to house his workers to be purchased. While, at the moment, their company can comfortably cover the costs of the repayments the LTV is a concern as it exceeded the minimum amount required by other platforms at 74%. The return on offer seems a little low at 8% pa as a change of heart by the government – or even a change of government given the upcoming election – could see the project cancelled potentially putting the borrower in financial difficulty at the same time as house prices in the locality fall.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across the platform's loans and are covered by a Provision Fund:

Quick Access Account (3.75% pa return); 30 Day Access Account (4.75% pa return); Great British Business and Green Energy Income Accounts (both of these offer a return of 7% pa).

Platform News: From 13th April until 11th May, Assetz Capital have increased the return on the 30 Day Access Account by half a percent to 4.75% pa.

Funding Circle

Lent to Date: £2,244,091,422 – fortnightly increase of £41,029,630 – 1.86% growth.

Although the figure is £6 million above the low over the Easter period, the fortnightly growth is around £14 million down on earlier in the year. Maybe this is because the site no longer offer loans to property developers.

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:

Working Capital Loan of >£63k to building contractors (C risk rating 12.5% pa return). This will be the third loan the company has had via Funding Circle. Looking back at their previous capital injections they have all been to assist with growth and to meet the demands of new contracts. Hopefully, this is all part of a business model that is going along nicely rather than a borrower getting deeper into debt.

Highlighted Rejected Loan:

Expansion Loan of >£200k to travel agents (C risk rating 13.5% pa return). This was the borrower's third Funding Circle loan. The previous 2 were for circa £30k therefore this is a significant increase in their lending overheads but no explanation was provided as to what the additional capital was to be used for. Although there were funds on the balance sheet to cover the loan, I wanted reassuring that the business was on a downward spiral.

Defaulted Loans Update: Last Thursday a loan I had made to a builder was defaulted after the company went into administration. They were up to date with their repayments although the guarantor had become unresponsive. This came to auction at a time when E rated loans were filling up very quickly and I still had a day job therefore Auto-Bid was switched on. It must have slipped through the net because, given the negative comments in the Q&A about the worsening balance sheet, I can't believe I would have kept this. At least only £25 of capital is 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: £110,720,939 at the end of March – the site updates this total on a monthly basis but has not yet provided figures for April.

There were 8 auctions ongoing when this blog was compiled.

Highlighted Loans: Bridging loan of £780k to assist in the purchase of a garage for which the borrower has had positive preliminary discussions with the local planning authority with a view to constructing 3 to 4 luxury properties on the site. The LTV was 66.1% and a return of 13% pa was available – for me this will be tax free as I invested via my IFISA.

Defaults: There has been little progress with the 6 assets that need to be sold to redeem my troubled loans.

IFISA: I have opened my FundingSecure IFISA. Aside from the good rates of return at comparatively low risk, I like the fact that the site doesn't require a separate log on, you can toggle between the standard and ISA accounts via a dropdown menu. As existing loans are repaid it is quite easy to transfer the funds over to the ISA. I put all my loan parts up for sale but, as I didn't offer a discount, only a small proportion have found buyers to release the capital to move over to the ISA. I am transferring a Cash ISA to the platform but, as it requires the co-operation of the existing provider, it can take a few weeks to process. When that arrives I can buy my own loan parts using the ISA account therefore I decided not to panic sell at the moment by offering discounts.

Money & Co

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

When this blog was compiled there were 3 auctions taking place.

Highlighted Loans: The guaranteed to buy a home business is now raising £208k which is its fifth tranche of finding. The loan has a fixed return of 8% pa. Security is provided by the company's assets.

Loans in Trouble: Due to the low number of loans available, I have never invested via the Money & Co platform despite being registered with them. Everyone with an account last week received notifications about two M&C borrowers who are in difficulty.

The first of these was a company involved in the tracking of ships which had become insolvent due to the falling price of oil however a CVA had been set up which will see the M&C loan paid in full over the next 30 months.

While the second was a business that trained people in the art of public speaking. This has gone into administration with one of the directors filing for bankruptcy.

Having never previously received emails of this nature before from M&C I wonder if these are the first of their small portfolio of borrowers to get into trouble.

rebuildingsociety

Lent to Date: £11,400,000 – fortnightly increase of £100,000 – 0.88% growth.

There were 3 active auctions taking place when this blog was compiled.

Highlighted Loan: Computer business was looking to raise >£26k of expansion capital. I wasn't too impressed with this as there was very little detail in the proposal. There was mention of "a new product" but no information as to what the product was. Worse, the borrower had no collateral to cover the Personal Guarantee although there was enough value in the assets to cover the amount being borrowed twice over. Assets can be stripped however. While returns in the high teens were available, I felt this was one to avoid but the loan was fully funded nonetheless.

ThinCats

Lent to Date: £232,306,000 – fortnightly increase of £2,310,000 – 1.00% growth.

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

Highlighted Loan: Property Developer in Northern Ireland was looking to raise £175k to purchase the site of their latest project. Investors were offered a return of 13% pa which looked good as the LTV was 70% and further security was provided via a Debenture and Personal Guarantee.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Developer from the south east who is constructing 8 flats on the site of a former detached property – as covered in the last blog – returned again to the platform for a further tranche of funding worth >£103k out of a total facility of £2.1 million. Some progress has been made with the aspects of the development which have failed to meet building regulations. Those prepared to provide further capital can expect a return of 9% pa.

LendingCrowd

Lent to Date: £10,997,981 – fortnightly increase of £231,100 – 2.15% growth.

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

Highlighted Loan: Firm specialising in the sale of audio equipment via Amazon were looking to raise £51.5k to enable them to expand their product lines. It seemed a profitable business and so, as the loan was not quite fully funded with less than 24 hours of the auction remaining, I made a high bid of over 13% pa which was more than 2% above the average… and it was accepted

Platform News: LendingCrowd have reduced the duration of some of their auctions to enable borrowers who commit their capital to start earning interest sooner.

ArchOver

Lent to Date: £32,578,000 – fortnightly increase of £800,000 – 2.52% growth.

There were 3 auctions taking place when this blog was compiled.

Highlighted Loan: Industrial building contractors returned to ArchOver to renew their £650k working capital loan. Investors could expect a return of 7% pa and the loan was secured via a charge over the accounts receivable. Insurance was also provided by HCC.

INVESTUP PORTFOLIO

This platform, which lists loans from multiple sites, had 5 auctions taking place today and all were from P2P Lenders covered elsewhere in this blog.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £2.25 billion – fortnightly increase of £30 million – 1.35% growth.

Returns: Zopa's 3 accounts offer returns of 2.9%, 3.7% and 6.1% pa depending on the levels of access and whether or not they are covered by the Provision Fund.

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

Ratesetter

Lent to Date: £1,869,918,203 – fortnightly increase of £27,162,989 – 1.47% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.6% pa to 4.3% pa depending on the length of the investment. Compared to a fortnight ago, the former figure is 0.2% lower while the latter has reduceed by 0.7%.

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

Platform News: In a bid to expand its portfolio of borrowers, Ratesetter has acquired two businesses that supply finance to the customers of car dealers.

Lending Works

Lent to Date: £51,831,225 – fortnightly increase of £1,146,433 – 2.26% growth.

Lending Works has now provided borrowers with more than £50 million of capital.

Returns: 3.5% pa and 4.4% pa via an IFISA or standard account for 3 and 5 year investments respectively. These rates have reduced by 0.1% over the past fortnight.

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.