September's P2P Lending Platform News Round-up

Totals lent to date (5th September 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £606,800,000

Crowd2Fund - £20,200,000
Funding Circle - £3,800,000,000
FundingSecure - £266,118,577
Money & Co - £6 million approx
Rebuildingsociety - £13,000,000
ThinCats - £290,408,000
Invest and Fund - £3 million plus
LendingCrowd - £43,072,936
ArchOver - £78,946,000

PERSONAL P2P LENDING

Zopa - £3,590,000,000
RateSetter - £2,714,812,309

Lending Works - £128,093,077

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £606,800,000 - £19.6 million growth (3.34%) in the past fortnight.

When this blog was compiled, there were 73 loans in the pipeline with 5 imminently due to be drawndown.

Highlighted Loan: Hotelier in Scotland required £300k to refinance a Commercial Mortgage with a High Street lender which had jointly been taken out with their recently separated spouse. The Bank would not provide a new facility as they have decided to reduce their exposure to the hotel trade. The loan was for 5 years with an amortisation of 20 years and according to the accounts the coverage for debt from cash flow was 133%. My concern was that the ex-husband managed the finances and procurement therefore the new single owner would have a great deal of learning to do. While a first charge over the hotel was provided with a LTV of 60%, that could fall in value if the business went astray. I therefore decided that a return of 7% pa just wasn't worth the risk.

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 (4.1% pa)

30 Day Access Account (5.1% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Crowd2Fund

Lent to Date: £20.2 million – latest available figure.

Over the past 2 weeks, I received 6 notifications of new auctions being listed on the site.

Highlighted Loan: Occupational Health Consultants who operate from mobile units were looking to raise £53k to purchase a storage facility to accommodate the assets of their expanding business. Annual Profits were 3x the amount being borrowed as were the Net Assets therefore a return of 11% pa looked excellent. Just a shame the capital requirements were fully funded when I came to review the loan.

Funding Circle

Lent to Date: £3,800,000,000

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 managed accounts are offered which distribute funds across differing risk profiles of loans within their portfolio. These options are projected to offer returns in the ranges of 5% - 5.5% pa and 6% - 7% pa.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site express concerns over the apparent lack of due diligence that is undertaken amid accusations that they are currently recklessly increasing the size of their Loan Book to boost the planned stock market launch through which they hope to raise £300 million to enable expansion into new areas.

FundingSecure

Lent to Date: £266,118,577 at end of July – monthly growth of £6,587,126 (2.54%).

The backlog of loans continues on this site with 17 waiting to be filled when this blog was compiled although that is 4 less than a fortnight ago.

Highlighted Loan: While some loans seem to be lingering on the auction page for ages, there was a £60k renewal last week that raised the required capital in less than a minute despite each investor being restricted to a maximum of £500. The loan was required to fund the refurbishments requested by the purchaser of a property who had made an offer of £240k – giving an LTV of just under 27%. With a return of 12% pa this looked good as even if the current sale falls through it should be possible to sell the property for more than enough to cover the loan.

Defaults: …and talking of which, a few properties held as security against some of my defaulted loans appear to have sales which are close to completing but it always seems to take an age to get them over the line.

Wheeling & Dealing: The Secondary Market is still very quiet with all 3 loans I had for sale timing out before finding a buyer.

Money & Co

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

When this blog was compiled there were 0 auctions taking place.

rebuildingsociety

Lent to Date: £13,000,000.

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

Highlighted Loan: A borrower required £88k of working capital to facilitate a newly won contract to supply containers to a construction company in Kazakhstan, a country where no insurance can be set up to facilitate a credit line. The person raising the funds has already had one business fail after not receiving funds from a previous overseas contract and the only security provided was a Personal Guarantee. This appeared to be one of the riskiest loans I have ever seen and a return of 18% pa was nothing like enough to tempt me.

ThinCats

Lent to Date: £290,408,000 – no change.

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

Highlighted Loan: Having finally gained planning permission to convert a former pub into a House of Multiple Occupation, Property Developers required £190k to develop the site which they originally purchased with a £180k loan from Thin Cats which this capital injection ranks behind. Somewhat intriguingly, this gives a total borrowing of £370k and yet the site is valued at only £270k although there are additional Corporate and Personal Guarantees. No indication was provided as to how much of the first loan had been repaid. In relation to the Corporate Guarantee, the accounts which were 18 months out of date indicated negative net assets. The target return was 12% pa but I am amazed ThinCats even listed such a poor loan on their site.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: A Property Developer who is constructing an apartment block comprising of 6 x 2 bedroom dwellings on the site of a large detached property returned for their sixth >£164k tranche of funding from a £3.73 million facility. The building works are progressing on schedule. Investors were offered a return of 9.5% pa as the LTV shifts from 75% to 61.8% at completion.

LendingCrowd

Lent to Date: £43,072,936 – fortnightly increase of £1,141,680 – 2.72% growth.

This site usually adds loans in the afternoon with the auctions ending at around 11 am the next day. On the evening this blog was compiled 2 such auctions were added to the site.

Highlighted Loan: A company offering Spa treatments in London requested >£27k to fit out new premises. The proposal read well with the promise of offering an oasis of calm to those living hectic lives in the capital however their financials failed to provide me with any good vibes whatsoever. Firstly, they were 18 months out of date and secondly, they reported negative assets to the tune of more than £100k. At the time I reviewed the details, far braver people than me had made 110 bids with an average return of more than 9.76% pa. The site indicated the loan was Director Guaranteed but there was no indicate of how they could cover the loan if things went wrong.

ArchOver

Lent to Date: £78,946,000 – fortnightly increase of £2,430,000 – 3.18% growth.

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

Highlighted Loan: A business that provides Electronic Point of Sale equipment to Convenience Stores and Fuel Stations returned to ArchOver to renew £250k of the £1.6 million worth of expansion capital that they raised 12 months ago. Things seem to be going well with their customer base shifting from independent operators to well-known Blue Chip brands. They have also received a capital injection via a loan from a French company which ranks behind the borrowing from ArchOver. This connection will give them access to markets within Europe and French speaking Africa. Investors were offered a return of 7.5% with security provided via a charge over future revenues and insurance provided by Coface.

CapitalRise

I invested quite a large sum in a development in Central London via this site in the Spring of 2017 as this was one of the few platforms offering IFISAs at that time.

Last week the latest quarterly update reported that the building works continue to progress but the borrower has asked to extend the anticipated sale date from February 2019 until June of the same year. With the recent dip in property prices in the UK's capital this is no surprise. Hopefully, the uncertainty over Brexit will have been resolved by next Summer giving confidence a boost. I am still expecting a deal to be struck with the EU at the eleventh hour.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.59 billion – an increase of £30 million over the past 2 weeks – 0.84% 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 report that £150 million has been invested via its IFISA Account since the product was launched in June 2017. Around half of its in-flow from investors is via the tax-free wrapper.

Ratesetter

Lent to Date: £2,714,812,309 – an increase of £30,004,715 over the past 2 weeks – 1.12% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.1% pa to 5.8% pa depending on the length of the investment. There has been quite a divergence in the past fortnight with the former figure decreasing by 0.6% and the latter increasing by 0.1%.

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 trumped Zopa's IFISA statistics by reporting that they have seen in-flows of more than £130m into its tax-free savings product in just eight months.

Lending Works

Lent to Date: £128,093,077 – an increase of £2,748,978 over the past 2 weeks – 2.19% growth.

Returns: 4.5% pa and 6.0% pa via an IFISA or standard account for 3 and 5 year investments respectively.

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.