P2P Lending Platform News Round-up

Ratesetter join the £1 Billion lent club… they claim to have reached that level faster than any other P2P Lending site… a glut of defaults for The Secret Investor gives him the January Blues

Totals lent to date (21st January 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £86,376,589
Funding Circle - £1,040,033,180
FundingKnight - £29,291,500
FundingSecure - £20,444,624
Money & Co –  £6 million approx
Rebuildingsociety - £8,567,425
ThinCats - £147,935,000
Invest and Fund - £1 million plus
LendingCrowd - £3.7 million
ArchOver - £10,915,000

PERSONAL P2P LENDING

Zopa - £1,270,000,000
RateSetter - £1,000,438,028

Lending Works - £20,243,148

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £86,376,589 – no change.

One loan is upcoming. This is to a start-up business looking to raise £70k for the refurbishment of an Italian Restaurant. There is flexibility for the borrower as they have a capital repayment holiday until the building works are completed and customers are visiting the premises. This should make it a safer investment for those lending their capital resulting in an interest rate of 8% pa over the 5 year term.

The loan was due to be to be drawn down the day after this blog was compiled (22nd January).

There are also 3 managed accounts protected by provision funds with returns of 3.75% to 7% depending on accessibility.

Funding Circle

Lent to Date: £1,040,033,180 – increase of £26,528,880 – 2.62% growth.

The second complete week of the year saw FundingCircle return to their pre-Christmas volumes although the monetary value of the deals was lower.

There were 45 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 of my activity in the past fortnight.

Highlighted Accepted Loan:

Loan of £200k to Civil Engineers to provide working capital for contracts that have been won recently (E risk rating, 17.7% return). This business has been through difficult times which they have explained were related to the loss of a major contract. As a result, they have lost the A rating of their previous Funding Circle loan. Clearly, there are risks but the returns are also high. Hopefully the new contracts will get things back on track.

Highlight Rejected Loan:

Loan of 100k to office furniture manufacturer. A difficult call this. They were a profitable business in 2014 but didn't supply any data from 2015. Also, a loan for £750k was taken out in the last 12 months for which no explanation was provided. It was a C rated offering with a return of 11.6% instead of 11.9% therefore it was a lower return with some risks surrounding it.

Wheeling and dealing: Even with Auto-Bid switched on, I had to buy some extra part loans from the Secondary Market this week as there was some unused capital building up in my account. Many low value/high return loans are fully funded before either myself or the Auto-Bid can get part of the action.

Defaults: Really bad fortnight with 4 loans defaulted. It was the same last January when I had a glut of loans that went bad. Possibly this is a cyclical thing due to the collections department catching up after Christmas. I certainly hope the trend from 2015, when there were no further defaults until April, repeats itself.

FundingKnight

Lent to Date: £29,291,500 – increase of £205,000 – 0.7% growth.

There was 1 auction listed when this blog was compiled.

Highlighted Loan: Manufacturer of surveillance equipment looking to raise £112.5k to fund their expansion into the USA. The reserve interest rate is 11% pa. Although there is a debenture against the company in addition to a personal guarantee I would be pitching my bid higher than the reserve if I was active on FundingKnight as, while the company already has a small foothold across the Pond, expanding into the States is quite a big step. *This loan is due to be relisted soon as it was posted recently at a much higher amount but the borrower changed their mind about using the new capital injection to pay off a couple of existing FundingKnight loans.HHH

FundingSecure

Lent to Date: £20,444,624 – Figure updated at the start of each month.

At the time this blog was compiled, 1 loan was available to invest in.

Highlighted Loans: A borrower was looking to raise £20k against a watch worth just £4k more. The Loan to Value ratio was 83.33% which is higher than is usually accepted on this site. The reason this riskier offering had an interest rate as low as 12% pa (the typical level for this platform) was because the valuer had guaranteed to buy the item in the event of a default. Even with this guarantee, the loan was slower to fill than is usually the case at FundingSecure.

Buying to Sell: A large bridging loan for £350k to develop some land was listed just after I had deposited £500 into my FundingSecure account. As the loan hit 20% funding in less than a minute, I decided to allocate the entire £500 with a view to selling it on at a 1% premium to make a quick fiver on the Secondary Market. My strategy has always been to never lend more than £80 to any one borrower so this was a very bold move especially when I logged back in 3 hours later to discover that the rate of funding had tailed off and the total invested had only reached 80% – would there be any demand when I came to resell? This move was made shortly after the previous blog went to press and I am still on tenterhooks waiting to find out whether I am a Hero or Zero as the loan is yet to be drawn-down.

Money & Co

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

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

rebuildingsociety

Lent to Date: £8,567,425 – latest figure available.

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

Highlighted Loans: A building company was looking to raise £25k to aid cashflow during a period of expansion. It looks like a good profitable business – with the only risk being how the management will be able to handle a trebling of workload. Via InvestUP I put in a bid at a very healthy 18%

Platform News: ReBuildingSociety hosted a "Meet the Team" webinar on the 14th January. The role investors have to play in understanding and providing advice on borrowers' propositions was strongly emphasised.

Interestingly, ReBuildingSociety has launched a tie-up with One Stop Business Finance (OSBF) who provide loans to small businesses that do not meet the criteria for borrowing from ReBS itself. OSBF have also requested £100k from ReBS investors to increase their capitalisation. This invoked a great deal of debate because there is no personal guarantee to back the loan, only a company debenture, although each loan OSBF makes has a personal guarantee. Despite this risk, I decided to contribute to the deal as the plan is for OSBF customers to be passed to ReBS as their businesses grow large enough to be assisted by the platform. Hopefully, this will generate more opportunities in the long term.

ThinCats

Lent to Date: £147,935,000 – increase of £1,170,000 – 0.8% growth.

3 loans are available to invest in.

Highlighted Loan: A property developer is looking to raise £143k to convert a hotel into affordable housing in the North West of England. They took out a loan of £191k in the Autumn to purchase the site and so this takes the total reasonably close to the £340k that the development is currently valued at although that will double once the flats have been completed. As affordable accommodation is in such short supply, this has great appeal to the morals of investors and, with a target rate of 13% pa, the material returns are quite attractive too. The downside is that this loan ranks behind the earlier one when it comes to the security which is held against the development and a personal guarantee. Also, the capital and interest will not be paid until the end of the 15 month term.

Invest & Fund

Lent to Date: Over £1 million

No new loans have been added to the platform since the New Year however Invest & Fund have advised that 5 loans are due to be added to the site in the near future.

LendingCrowd

Lent to Date: Over £3.7 million when the site last updated their figures.

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

Highlighted Loan: A luggage wholesaler was looking to raise £80k to import stock ahead of the busy summer season. The balance sheet showed plenty of profit so I made a bid at over 11% pa.

Platform News: On 3rd February, Lending Crowd CEO, Stuart Lunn, is speaking at an event about raising capital through Alternative Finance hosted by the Scottish Institute of Directors. Hopefully this will attract more borrowers to their site which has enjoyed quite a busy start to 2016. 

ArchOver

Lent to Date: £10,915,000 – no change in the past fortnight.

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

The most frequent borrower on the site – a company providing credit to SMEs – was raising £100k via 1 loan with an interest rate of 6.5%. This 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 11 loan auctions taking place when this blog was compiled.

Having been using the site in anger, I have discovered a couple of downsides. Firstly, when a loan I wish to invest in has been identified, there is a delay while funds are transferred into my InvestUp Account and a further delay while they are passed across to the partnering site. A week can pass before I am in a position to make a bid.

Another problem is that, although there is a Q&A tab for each loan, they don't link to the Q&A pages on the partnering sites so they are rather isolated. These pages are often key in my decision making.

It has also been a very quiet start to the year with only ReBuildingSociety and ThinCats adding new offerings in the past fortnight. Quite disappointing for a concept that I felt had so much promise but perhaps things are still lagging after the Festive Period.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.27 Billion – increase of £30 million – 2.42% growth.

Returns: Interest rates are 3.8% to 5% depending on the length of the investment. These are unchanged from a fortnight ago.

Zopa distribute investor's money mostly to unsecured consumer loans however capital is covered by a Provision Fund.

Ratesetter

Lent to Date: £1,000,438,028 – increase of £29,445,502 – 3% growth.

Ratesetter have joined the £1 billion lent club in the past fortnight. They claim to have achieved that milestone faster than any other site.

Returns: Interest rates are set according to supply and demand. They currently range from 3.3% to 6.1% depending on the length of the investment, both are slightly higher when compared to a fortnight ago.

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 increased their "Refer a Friend" bonus from £50 to £100.

Lending Works

Lent to Date: £20,243,148 – increase of £1,118,965 – 5.85% growth.

Lending Works are celebrating at the moment as they lent over £1 million in the past fortnight. This has taken their total past the £20 million mark.

Returns: 4.7% and 6.3% for 3 and 5 year investments respectively – the latter figure is slightly higher than 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.