P2P Lending Platform News Round-up

by The Secret Investor

Headlines: FundingCircle offer Tablets (computer hardware rather than pills!) to those who make significant investments before 16th May… Assetz Capital believe they are the first P2P Platform to assist a stock market company to raise finance.

Totals lent to date (14th April 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £103,694,106
Funding Circle - £1,213,847,100
FundingKnight - £30,427,000
FundingSecure - £32,676,324
Money & Co –  £6 million approx
Rebuildingsociety - £9,417,597
ThinCats - £163,127,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £15,237,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000
RateSetter - £1,147,952,533

Lending Works - £26,031,124

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £103,694,106 – increase of £1,473,000 – 1.44% growth.

Assetz Capital continue to offer a steady stream of relatively low risk loans with 36 upcoming and in the pipeline.

Highlighted Loan: The platform was excited to announce recently that their investors had the opportunity to finance what they believed to be the first loan on a P2P Platform to a Stock Market-listed PLC. The company in question is a chain of Independent Finance Advisors (IFAs) that has grown by acquisition to become the seventh largest IFA in the UK. They needed to borrow £2 million to fund their next acquisition which was a business generating £600k of profit annually. The loan was for 3 years at 8.5% pa with the option of extending for a further 2 at a higher rate. Security was offered in the shape of the company being taken over which was valued at £3.7 million giving a Loan to Value of 54%.

Undoubtedly, this deal can only add to the credibility of the P2P arena. The borrower appears to have an excellent track record, my only concern is how much the value of the security would reduce if things went badly wrong.

Funding Circle

Lent to Date: £1,213,847,100 – increase of £24,166,480 – 2.03% growth.

In early March the total lent figure was increasing at over £30 million per fortnight but during the past 4 weeks that rate of growth has reduced by £7 million for each 2 weekly period. The throughput is still massive at over £24 million.

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

Secret Investor's Activity: The trend towards loans taking longer to meet their capital requirements (as mentioned in my last blog) must be genuine and not a figment of my imagination as Funding Circle have implemented some quite drastic measures to attract more capital to the site – see Platform News. This means I have had the opportunity to review and bid on loans without relying on the Auto-Bid facility to grab a slice of the action before loans are fully funded.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Loan of £105k to enable electrical contractors to upgrade their equipment, offices and yard (C risk rating, 11.9% return). A profitable business and, although the loan is for 5 years, this is just to give the borrower wiggle room as they expect to pay back the loan in 24 months.

Highlighted Rejected Loan:

Building Maintenance company looking to raise £155k of expansion capital (C risk rating, 11.9% return). Low credit rating and strange accounts. All figures were similar for the past two years except for "Interest Paid" which ate into two-thirds of the previous year's profits. There was no response when this was pointed out in the Q&A. There may have been a reasonable explanation but there are plenty of loans available on Funding Circle at the moment so my funds went elsewhere.

Defaults: It's always a little scary checking my Funding Circle account when I get home from work on a Thursday as that is the day loans are defaulted on this platform however last week I had some good news as not only had the guarantor covering one of my defaulters agreed a plan to recover an investment in which I had £63 of capital outstanding (representing about 10% of my total losses) but they are going to make over payments to ensure the loan is settled within the original term… I then looked back at the history of the loan and realised this was not the first time a payment plan had been put in place only for it not to be maintained. Fingers crossed things will be different on this occasion!

Yesterday there was an update on another defaulted loan. Rather than file for bankruptcy the borrower's father is going to pay off half of the outstanding balance. Funding Circle advise that this is a better deal than the court would provide lenders. My share of the outstanding balance is £32 so I will have to write-off £16. Not a catastrophic amount and underlines the need not to over commit on any one loan.

There were no defaults for me today either so it has been a very good fortnight.

Platform News: No doubt to continue attracting capital to the site prior to getting the green light to offer IFISAs, FundingCircle are offering quite an impressive incentive. Those who increase their investments by £10k, £20k or £30k between now and 16th May will receive a new piece of computer hardware in the shape of a Kindle, iPad Mini 2 or iPad Air 2 at each of the aforementioned levels. Does this mean there will be news about the Funding Circle IFISA in mid-May?

FundingKnight

Lent to Date: £30,427,000 – increase of £70,000 – 0.23% growth.

There were 0 auctions ongoing when this blog was compiled.

FundingSecure

Lent to Date: £32,676,324 at the end of March.

March was another record breaking month for FundingSecure with borrowers raising £7 million of capital. With the increase in stamp duty now implemented, the site expects things to quieten down a little however at the start of April they still had £3.7 million worth of loans in the pipeline. This should provide a reasonable amount of diversification for investors and, as a result, FundingSecure are the recipients of my latest monthly deposit.

At the time this blog was compiled, 2 auctions were taking place.

Highlighted Loans: Following the stamp duty changes, there is now a more even split between bridging loans and asset backed borrowing. In the latter category, tomorrow (Friday, 15th April) investors can earn 13% pa (plus 1% or 2% more for those contributing above the £10k and £25k thresholds) by assisting a powerboat racing team who are looking to borrow £650k secured against one of their vessels which is valued at over £1 million. Not only that but those contributing funding will be able to opt-in to enter a draw. The two winners of this will see them and a friend getting the opportunity to travel at high speed in one of the boats at the team's base in Southampton.

Waiting for assets to be sold: There have been no major developments on the 4 loans I have invested in which have repayments overdue although the owner of a boatyard has completed their redevelopment work and is hopeful of obtaining a long term mortgage to settle their FundingSecure debt while another of my borrowers appears set to lose their car if they don't respond to a default notice within the next week or so.

Money & Co

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

There was 1 auction active on this site when this blog was compiled.

Highlighted Loan: A city professional is looking to raise £307k to purchase two coffee shops in the North of England as going concerns. The loan is for 5 years with an indicative return of 9% pa. The existing business generates enough profit to service the loan and the borrower has ideas which, when implemented, they believe will increase profits. This seems to be quite a reasonable deal.

rebuildingsociety

Lent to Date: £9,417,597 – increase of £27,912 – 0.30% growth.

There were 3 auctions active on this site when this blog was compiled.

Highlighted Loan: A director is looking to raise £160k to take total control of a catering franchise in the Midlands by buying out the two other directors. As ReBS are unable to provide personal leans, this has to be done in something of a roundabout manner with the exiting directors selling their shares to the company so that the remaining person can buy them from the business over time.

The thing I liked about this loan was that the dividends currently being paid to the directors who are moving on to other things will be used to service the loan. I was happy to bid at 17% pa.

ThinCats

Lent to Date: £163,127,000 – increase of £1,632,000 – 1.01% growth.

There were 9 auctions active on this site when this blog was compiled.

Highlighted Loans: Investors can earn a return of 11% pa by assisting a mobile phone dealer who is upscaling to became a network operator serving corporate clients. While profit margins will be higher, initial start-up costs are substantial therefore the business is looking to raise £150k. The proposition suggests that the company already has a client base in place but a new business venture such as this is always going to carry a degree of risk.

Invest & Fund

Lent to Date: Over £1 million

There were 0 auctions taking place when this blog was compiled although there are 8 loans in the pipeline.

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.

Highlighted Loan: Recently high end kitchen fitters were looking for £30k of expansion capital to be repaid over 2 years. It is a profitable business although quite a small operation. Security was provided by a director guarantee plus first charge and debenture. I felt it was quite high risk but, as the business focussed on the booming London property market, I decided it was worth making a bid for the minimum amount (£20) at just under 14% pa.

ArchOver

Lent to Date: £15,237,000 – increase of £0 – 0.00% growth.

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

Highlighted Loan: The most frequent borrower on the site – a company providing credit to SMEs – was raising £150k via 1 loan with an interest rate of 6.25% over a 1 year term. This will add to the £3.5 million plus that investors have already lent to the organisation. The return is less than loans on many other sites in this section of the blog but the risks are also much lower as in addition to security via a first, floating charge on the borrower's Accounts Receivable, the loan is also insured.

The low risk is underlined by the fact that no loans have defaulted on this site.

INVESTUP PORTFOLIO

There were 15 auctions taking place when this blog was compiled. All new loans were from sites covered elsewhere in this blog – reBuildingSociety, ThinCats and ArchOver – making this a good place to distribute funds from a central location.

Platform News: It appears as though InvestUp will be one of the last platforms to receive authorisation from the FCA to offer an IFISA as they will have to wait for all their partner sites to receive the necessary approval first.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.42 Billion – this is the first time for a couple of months that the site has made available a Total Lent figure. In that period the average fortnightly increase has been £25 million which put them at a similar turnover level to Funding Circle.

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: £1,147,952,533 – increase of £23,663,221 – 2.10% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.1% to 6.4% depending on the length of the investment. These figures tend to fluctuate by no more than a few decimal places.

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: £26,031,124 – increase of £992,984 – 4.13% growth.

Returns: 4.7% and 6.3% 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.