P2P Lending Platform News Round-up

by The Secret Investor

Zopa plan to offer products with higher risks/returns to their retail customers… ArchOver have listed what they believe to be the largest non-property backed P2P loan on any platform…LendingCrowd are also setting records, with the listing of their biggest ever loan.

Totals lent to date (18th February 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £93,442,589
Funding Circle - £1,102,869,140
FundingKnight - £29,652,500
FundingSecure - £21,535,924
Money & Co –  £6 million approx
Rebuildingsociety - £9,185,595
ThinCats - £153,377,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £10,915,000

PERSONAL P2P LENDING

Zopa - £1,270,000,000
RateSetter - £1,051,287,959

Lending Works - £22,291,941

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £93,442,589 – increase of £450,000 – 0.48% growth.

When this blog was compiled there were 37 upcoming and pipeline loans and also 3 managed accounts protected by provision funds with, depending on accessibility, returns of 3.75% to 7%.

Highlighted Loan: A midlands-based engineering group is looking to raise almost £1 million to refinance loans from the banks. They also require capital to pay arrears to the HMRC. These had built up due to accounting irregularities so the risk here is whether the holes in the management processes have been successfully plugged. If they have, then investors will enjoy returns of 10% pa over the 5 year term with security provided by first charges over 2 commercial properties and company guarantees.

Funding Circle

Lent to Date: £1,102,869,140 – increase of £32,349,080 – 3.02% growth.

Another record breaking fortnight for Funding Circle. They have lent £100 million since Christmas. This trend looks set to continue as there were 52 auctions taking place when this blog was compiled.

Secret Investor's Activity: The loans that offer the highest returns get filled very quickly on this site therefore I have switched on Auto-Bid to pick up my share of C, D & E rated deals. Below are highlights from my activity in the past fortnight:

Highlighted Accepted Loan:

Loan of £31k+ to Drainage Experts looking to diversify into rain-water soak away installations (C risk rating, 11.9% return). Profitable business that is already making in-roads to this new market to them.

Highlight Rejected Loan:

Loan of just under £30k to help a technical consultancy purchase equipment that will increase their capacity. This business seems to be on a downward trend with profits dropping and Funding Circle rating this loan as a C risk whereas a previous capital injection was classed as A+.

Defaults: Having had default notices served during January, some of my borrowers have agreed new payment plans with Funding Circle. Hopefully this means I will see some of my losses recovered. I've had no more defaults in the past fortnight

FundingKnight

Lent to Date: £29,652,000 – increase of £100,000 – 0.34% growth.

There was 1 auction listed when this blog was compiled.

Highlighted Loan: A supplier of garden furniture is looking to raise £120k to purchase stock for a new line that is aimed at the retail market. This is quite a seasonal business with lots of borrowing required over the Winter months. While the company has a strong portfolio of customers in the brewing industry, were I active on this platform I would be bidding well above the 9.5% pa reserve rate as the new product line may not be successful.

FundingSecure

Lent to Date: £21,535,924 at the end of January. This figure is updated monthly but was released after the 4th Feb blog went to press. The total lent grew by more than £1m (5.34%) during the first month of 2016. February is expected to be a record breaking time with £10m worth of deals in the pipeline although not all of these loans may come to fruition.

At the time this blog was compiled, 1 auction was taking place.

Highlighted Loan: That single auction was for a very large bridging loan valued at £1m to enable the completion of a wind turbine in Northern Ireland. Offering a return of 12% pa, refinancing is due to take place in 6 months when the facility is connected to the grid.

Buying to Sell: Six weeks ago a bridging loan for £350k was listed just after I had deposited £500 into my FundingSecure account. I invested the full amount looking to sell immediately and make a quick profit however the loan was not drawn-down until 4 weeks later. Having committed so much to this one borrower (£80 is my usual maximum) I felt a fair amount of relief when my part of the loan was soon sold on the secondary market and an additional £5 was added to my account although the capital was tied up for longer than I expected.

Money & Co

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

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

Platform News: Although there have been no new auctions since the turn of the year, Money&Co have advised that they have over £5m worth of deals in the pipeline but because they specialize in raising finance for acquisitions, a great deal of investigation is required therefore it can take a long time for these investment opportunities to appear on their website. To increase throughput they have recruited additional members of staff and are planning to branch out into asset-backed lending.

rebuildingsociety

Lent to Date: £9,185,595 – 7% increase since the end of November.

There were 2 auctions active on this site when this blog was compiled.

Highlighted Loan: A healthy return of over 18% pa will be obtained (subject to defaults) by those who contributed to the £50k of working capital for a drainage company who tempted investors with information about a parallel plumbing division that they had just set up. This was unrelated to the injection of funds and it was claimed that the tools and workforce were already in place to grow the business by up to 30% through this diversification

ThinCats

Lent to Date: £153,377,000 – increase of £2,931,000 – 1.95% growth.

The ThinCats website had been taken down for maintenance when this blog was compiled however around half a dozen loans were available to bid on when I checked the platform a few days ago.

Highlighted Loans: ThinCats enjoy a great deal of repeat business from borrowers which enables investors to build up a degree of trust. This week a TV production company and a property developer were offering annual returns of 12% and 11% respectively as they looked to raise a combined total of over £600k.

Platform News: ThinCats expect interest in their Innovative Finance ISA to be very high and, should there not be enough lending opportunities to satisfy demand, priority will be given to existing customers.

Invest & Fund

Lent to Date: Over £1 million

No new loans have been added to the platform since New Year although the site has advised investors that 9 are in the pipeline.

LendingCrowd

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

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

Highlighted Loan: A technology company raised £75k of R&D capital to develop a new product. Those who invested will see a return of 10.88% pa on average over 36 months. As ever, the risk is whether this addition to their catalogue will find buyers although the business does seem to have a good track record in the market that they operate in.

Stop Press! As this blog was being compiled, Lending Crowd announced that they have just added their largest ever loan to the site. The borrower is a coach operator looking to raise £200k of expansion capital which will be paid back over 5 years. It is claimed that there is plenty of demand to hire the 9 coaches recently added to their fleet and this work will have a high profit margin. If true, this offers a good return at the 10.89% pa average rate that was established in the early stages of this auction.

ArchOver

Lent to Date: £10,915,000 – no change in the past fortnight (it looks like this figure has stopped getting refreshed on their site).

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

Highlighted Loan: ArchOver are currently looking to raise the funds to service what they believe to be is the largest ever non-property secured loan to be offered in the P2P arena. A company that operates within the healthcare arena is looking to raise £2.3m to support their expansion plans and replace their current working capital facility. This sum is split into separate loans for each of these requirements with returns/terms of 6.25%/1 year and 6.75%/2 years respectively. These low rates in comparison to what other sites offer in this section of the blog reflect the triple level of security that is provided in the shape of a first charge on all assets, first charge on Accounts Receivable (which will be maintained at no less than 125% of the loan value) and credit insurance supplied by Coface. Although no loans have ever defaulted on this site, given that these loans are breaking new ground, I would have expected a higher rate of return.

INVESTUP PORTFOLIO

There were 10 auctions taking place when this blog was compiled. I am pleased to see some bridging loans from Saving Stream appearing on the site as these offer healthy returns of 12% although as I already own a couple of buy to let properties, I am a little reluctant to increase my exposure in bricks and mortar too much.

Highlighted Loan: Talking of bridging loans, I invested in what in effect is a bridging loan for an aircraft this week via one of InvestUp partners, Ablrate. The 'plane had been leased at a higher rate than the 13% pa interest-only monthly payment for this loan which will allow the aircraft to be purchased. The borrower already as a buyer lined up. My only concern was that the business is in a Latin American country and that seems a risky part of the world to invest in.

Platform News: InvestUP have launched version 2 of their website – a far slicker design it is too. One good thing is a vast increase in the number of search options and these are made available via "push buttons" down the left hand side of the listings page.

A new feature that I am not so sure about is clubUP. Through this, InvestUp lenders are rated according to the number of comments they make on loans (presumably this is based on quantity rather than quality), diversity of investments and the number of people they follow on the platform. The most important statistic – return on investment – is not included. No doubt this cannot be published as it is sensitive, personal information but without it, clubUP seems little more than a gimmick.

Nonetheless, bit by bit this young enterprise is becoming a useful tool for the busy investor.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.27 Billion – latest figure available.

Platform News: Ahead of the tax changes relating to P2P Lending which are due for implementation on 6th April – namely the introduction of the IFISA tax wrapper and the ability to claim tax relief on P2P losses – Zopa are broadening the range of products available to retail customers. These will offer expected returns ranging from 3% to 7% (after defaults) although only the former will be covered by a provision fund. The higher rates of return were previously restricted to institutional investors.

Ratesetter

Lent to Date: £1,051,287,959 – increase of £25,420,902 – 2.48% growth. Curiously, the amount of increase is identical to the last £1 to the previous fortnight.

Returns: Interest rates are set according to supply and demand. They currently range from 3.4% to 6.1% 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.

Platform News: Ratesetter have announced details of their IFISA product. It will work in exactly the same way as their existing accounts with investors having the choice of lending for 1 month or for 1, 3 or 5 years. As with all ISA products, there is an annual limit on how much can be invested.

Lending Works

Lent to Date: £22,291,941 – increase of £1,099,680 – 5.19% growth.

Returns: 4.7% and 6.3% for 3 and 5 year investments respectively – no change from a fortnight ago.

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