P2P Lending Platform News Round-up

by The Secret Investor

Assetz Capital add a 30 day access account to their portfolio with a fixed rate of 4.25% pa... Funding Secure investors raise capital to build a record breaking speed boat… Returns at Ratesetter take a dip, is supply outstripping demand?

Totals lent to date (12th May 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £108,183,470
Funding Circle - £1,266,756,100
FundingKnight - £30,662,000
FundingSecure - £37,072,593
Money & Co –  £6 million approx
Rebuildingsociety - £9,457,677
ThinCats - £170,305,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £16,862,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000
RateSetter - £1,201,899,805
Lending Works - £27,522,913

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £108,183,470 – increase of £1,675,276 – 1.57% growth.

With 6 loans due to be drawndown around the time this blog was compiled and a further 31 in the pipeline, the turnover on this site continues to be healthy.

Highlighted Loan: The proprietors of a canal-side restaurant in the South West were raising £290k to purchase the freehold of their premises. Their repayments will be much lower than the current rent. With an LTV under 60% and further security provided by a debenture plus personal guarantee, I was happy to invest in this profitable business which offered a return of 9% pa.

Late Repayment Bonus: The refinancing package for one of the bridging loans I invested in has been delayed causing a late repayment however Assetz Capital will be charging the borrower an extra 3% pa on behalf of the lenders for the time that the loan will be extended.

Platform News: Having trialled a 4.25% pa rate of return on their Quick Access Account (QAA) during April, Assetz Capital are offering investors that deal on a permanent basis albeit via their new 30 Day Access Account. The QAA (which offers near enough instant access) has returned to its previous level of 3.75% pa.

Funding Circle

Lent to Date: £1,266,756,100 – increase of £25,697,560 – 2.07% growth.

Funding Circle continue to be by far the most prolific site lending to SME's although the fortnightly total continues to be about £6 million lower than earlier in the year.

58 new loan requests were listed on the site when this blog was compiled.

Secret Investor's Activity: Despite Funding Circle offering iPads to those investing 5 figure sums before 16th May, unlike at the turn of the year, loans continue to fill slowly enough for me to review and bid on them without resorting to turning on AutoBid.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Loan of £94k to enable a taxi company in Northern Ireland to invest in the latest technology (C risk rating, 11.9% pa return). My local taxi firm uses the GPS systems being purchased and they clearly improve efficiency. This business is already profitable although it has a poor credit rating. Often the latter can be due to relatively minor issues such as accounts being filed late. Would have been nice to know the exact reason but the loan was filling quickly so I didn't bother asking therefore the decision was made on a profitable business introducing a more efficient system. No other borrowing was reported.

Highlighted Rejected Loan:

Loan of £30k+ to an electrical business serving the agricultural sector (C risk rating. 11.6% pa return). The correct name of the borrower wasn't provided… whoever they were wanted capital to expand but there was no detail as to how the growth would be achieved (although this is not unusual for this site). Worst of all, there was no financial information whatsoever! Incredibly, the loan was fully funded in about 2 hours – presumably this was due to autobidders… then Funding Circle brought some sanity to the world by relisting the loan with the financial data attached – it actually had to be relisted twice as it was allocated the wrong risk band the second time around. Someone in the FC admin department was having a very bad day! Actually, the financials weren't too bad with one year's profit covering the loan amount. I was still a little worried by the lack of detail on how the growth was going to be achieved but I did make a small bid on this loan eventually.

It does underline how dangerous auto-bid can be when a loan with no financial information can be fully funded so quickly.

Defaults: A loan I contributed to which was to assist a farmer with his business plans defaulted last week. They had not been making payments and were unresponsive when Funding Circle attempted to contact them. Hopefully being defaulted will generate some action. It was a recent E rated loan so I have lost a fair amount of capital – nearly the entire £80 I lent. As the borrower claimed that the repayments would be comfortably covered by EU subsidies this seemed quite a safe loan. I would be interested to know the outcome when FC get to the bottom of this.

FundingKnight

Lent to Date: £30,662,000 – increase of £200,000 – 0.66% growth.

There was 1 auction ongoing when this blog was compiled.

Highlighted Loan: A farmer in Yorkshire was looking for £200k to erect a second wind turbine on his land. He had submitted the application in time to qualify for the soon-to-be-withdrawn FIT subsidies which are set to be awarded to the enterprise over the next 20 years. Funding Knight clearly regarded this as a relatively safe investment as they had allocated it a reserve interest rate of 9% pa – most of their loans offer double digit returns. Given a loan to a farmer I made via Funding Circle has gone bad despite supposedly being covered by subsidies, I write the comments on this with a wry smile however a number of loans on the Assetz Capital platform relating to green energy similar to this seem to be performing well.

FundingSecure

Lent to Date: £37,072,593 at the end of April. Monthly growth of £4.4 million (13.45%).

This site updates their totals lent on a monthly basis. £4.4 million was lent during April which was down from the £7 million figure reported for March as property developers were racing to get deals done before the new Stamp Duty rates came into effect. May is looking even quieter with £2 million worth of borrowing expected to be funded however the site reports that the longer term pipeline is looking very healthy.

Highlighted Loan: The number of bridging loans have outnumbered those secured against assets in recent weeks. One that appeared to have the best of both Worlds was to a property developer looking to purchase barns in the North West with a view to converting them into dwellings. Almost £0.5 million was required to assist with the purchase of the site. There was a loan to value ratio of 67.22% plus a Personal Guarantee was offered.

Making Waves: FundingSecure are excited to be raising funds to finance the construction of a boat to break the speed record for circumnavigating the Globe. The capital is set to be injected in tranches as construction progresses. My concern is, with something so cutting edge, there is plenty that can go wrong. Also, it is very difficult to put a value on a unique item such as this. If it fails to meet the expected performance targets, who would want to buy this uncompleted project? I would have wanted a return greater than the usual 12% to consider this a viable investment and, within a matter of days, a range of bonus interest rates ranging from 13% for an investment of £1,000 to 17% for £25,000 were offered. As my limit per borrower is £80, this was still out of my range!!!!!

The Virtue of Patience: Of my 4 loans that have not been repaid at the end of their 6 month term, 2 are waiting for assets to be sold and the other 2 are bridging loans waiting for refinancing/sale of property. These seem to be slow processes but am still hopeful that no capital will be lost.

Money & Co

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

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

rebuildingsociety

Lent to Date: £9,457,677 – no change. This site seems to be struggling to find the capital required by borrowers at the moment. Of the 4 auctions active at the time this blog was compiled only 1 had been filled (and the borrower had to reduce the amount they asked for to achieve that) while the others had not reached 50% of their targets although those auctions had a week or more to run.

The published default rate has increased from 8% to 10%. This may be dampening investor's enthusiasm for this platform. I have a small number of loans on this site (in the teens) but have only had a single default. A CVA has been agreed with that particular borrower and they have agreed to repay 98.5% of the capital over the next 5 years therefore, given this is a high risk/return platform, I am reasonably content with my situation on ReBS at the moment.

Highlighted Loan: Software developers were looking to raise £50k to fund R&D projects and help rebuild their balance sheet after the company's offices in India were flooded. This appeared quite a risky deal as it seemed to depend on whether a replacement site could be found that was within commuting distance of the existing workforce but on land which didn't flood. The company was confident of being able to do this but investor's concerns were reflected by the 19% pa interest rate.

ThinCats

Lent to Date: £170,305,000 – increase of £5,003,000 – 3.03% growth.

Things seem to be on the up at ThinCats with £5 million worth of capital raised in the past fortnight for the first time in the last 12 months.

There were 12 auctions active when this blog was compiled.

Highlighted Loans: In contrast to others, many loans on this site are underwritten by the platform's owners, ESF Capital, meaning borrowers are guaranteed to raise the funds they require. One of example of this was a loan of £1.345 million to construct a wind turbine. It was fully underwritten with ESF providing a minimum of £600k and the remaining £745k available to ThinCats investors. With the guaranteed income stream for the project, the return was 9% pa.

Invest & Fund

Lent to Date: Over £1 million

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

LendingCrowd

Lent to Date: Over £4.5 million as of the end of January.

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

ArchOver

Lent to Date: £16,862,000 – increase of £1,625,000 (10.66%) since the total was last updated 6 weeks ago.

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

Highlighted Loan: ArchOver listed a loan this week that is in a new sector for them as software developers who produce games that bring families together are looking to raise £320k to replace their factoring arrangements. At 8% pa, the returns available are higher than usual for this platform but low when compared to some other sites that loan to SME's. This is because of the high level of security due to accounts receivable being maintained at 125% of the value of the loan and insurance provided by Coface.

INVESTUP PORTFOLIO

There were 20 auctions taking place when this blog was compiled. Many were from sites covered elsewhere in this blog – reBuildingSociety, ThinCats and ArchOver – making this a good place to distribute funds from a central location.

One loan from an unfamiliar platform was a cake maker looking to raise £80k via Crowd2Fund however the only information provided about the company was a balance sheet which had figures much smaller than the amount being raised. There was no information as to how the funds were going to be used or how the loan was going to be covered… and the latter looked very marginal from the balance sheet. This appeared a far riskier deal than the 10% pa return on offer.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.42 Billion – latest figure available.

Returns: Zopa's 3 accounts offer 3.5%, 4.5% and 6.5% 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: £1,201,899,805 – increase of £25,828,812 – 2.2% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% to 5.9% depending on the length of the investment. These figures tend to fluctuate by no more than a few decimal places. They were at the low end of their range when this blog was compiled although not quite at the same level as after the recent Bank Holiday (see below).

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

Bank Holiday Blues: As the interest rates are fairly stable on this site, I use Auto-Bid to re-allocate any payments I receive. Usually funds are reallocated at 6.1% but the day after May Day Bank Holiday, the rate I received was a dismal 4.7%. This is probably because the market was skewed due to a lack of people wanting to borrow at that particular time. I was considering withdrawing from RateSetter but the rate was back to 6.1% the following day.

The latest figures are on the way down however so there may be some transferring taking place soon! As other sites struggle to fill loans, conversely it seems as though lender enthusiasm is pushing down returns here at Ratesetter.

Lending Works

Lent to Date: £27,522,913 – increase of £775,781 – 2.9% growth.

Returns: 4.7% and 6.0% for 3 and 5 year investments respectively – the latter reduced by 0.1% a fortnight ago but has now returned to the previously level.

As well as a Provision Fund to cover investor's finances, 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.