P2P Lending Platform News Round-up

by The Secret Investor

FundingCircle join Zopa in the exclusive £1 billion lent club… The various P2P platforms were remarkably busy in the weeks leading up to Christmas

Totals lent to date (24th December 2015)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £86,376,589
Funding Circle - £1,002,720,180
FundingKnight - £28,646,500
FundingSecure - £17,761,624
Money & Co –  £6 million approx
Rebuildingsociety - £8,567,425
ThinCats - £145,859,000
Invest and Fund - £1 million plus
LendingCrowd - £3.7 million
ArchOver - £10,915,000

PERSONAL P2P LENDING

Zopa - £1,220,000,000
RateSetter - £955,665,189

Lending Works - £18,615,800

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £86,376,589 – increase of £2,630,129 – 3.14% growth.

After a quiet few weeks, this platform was really busy in the lead up to Christmas with borrowers raising over £2.5 million after a number of loans were drawndown.

4 loans currently require funding, 1 loan is being drawndown today (Christmas Eve) and a further 2 are due to be drawn-down during January. These have returns of 9.25% and 10% pa.

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

Highlighted Loan: A property developer in the South of England looked to raise £350,000 to convert a retail space into a residential flat. The term of the loan was for 12 months and security was provided by a first charge over the 6 flats and a debenture on rental income. This provided a Loan to Value of just over 50% and investors received a return of 9.5% pa. The loan was fully funded and drawndown in no time which was good news for the borrower.

Platform News: Helpfully Assetz Capital now email their investors when new loans are added to the site.

Funding Circle

Lent to Date: £1,002,720,180 – increase of £26,913,540 – 2.76% growth.

Funding Circle exceeded the £1 billion total lent mark on 23rd December. Boosted by institutional investors financing deals, over half of this amount was handed to borrowers during 2015.

Secret Investor's Activity: The loans that offer the highest returns get filled very quickly therefore I have switched on Auto-Bid. Below is a summary of my activity in the past fortnight.

Accepted:

Worktop manufacturer. Required £105k loan for business expansion (C Rated – 11.9% return). Confirmed via Q&A that contracts were in place.

Holiday park: Required £80k loan for renovations (C Rated – 11.6% return). Quite an up-market park that hosts weddings – always a licence to print money and this was confirmed by the profits in the financial summary.

Technology company: Required almost £130k. Cash flow problem due to a late payment from a client. E Rated loan offering 17.4% - hope the bill is paid.

Construction company specialising in art installations: Just under £50k was required to fund refurbishment of their premises (C Rated – 11.9% return).

Building contractors: Required just over £50k for expansion. As they are London based, this seemed like a reasonably safe investment (C Rated – 11.9% return).

Rejects:

Furniture supplier: Required £63k loan for business expansion (C Rated – 11.9% return). Very short proposal. Wanted funds for hiring staff and website development but no detailed plans. Credit score also very low.

Importer of electronic goods: Required £157.9k to import goods ahead of the Chinese New Year. Been through difficult times after their main customer for e-cig products went elsewhere but then said this accounts for only 1% of their product line. Something didn't add up so this went for sale, a little reluctantly as this was E Rated and offered a return off 17.7%.

Keepsake franchise: Required £52k loan for relaunch. Blamed troubles on the economic crisis. I felt they should have recovered by now. Also wasn't impressed by the products on their website.

Wheeling and dealing: Having previously sold part loans at a 0.1% premium, I decided to push the boat out a little. Of the 3 rejected loans above, I listed 2 at a 0.5% premium and the one for the keepsake franchise with a 0.2% mark-up. Sales are listed on the Funding Circle website for about 2 weeks. The latter sold after 10 days but the 0.5% premium ones are still unsold with 2 days to go before they are delisted. I will be trying again in the New Year at a lower price.

Defaults: Although this site has scaled up to the point where there are several loans defaulting each week, fortunately none of mine were moved into this status over the past fortnight.

FundingKnight

Lent to Date: £28,646,500 – increase of £430,000 – 1.52% growth.

Two auctions were listed on Christmas Eve.

Highlighted Loan: An expanding firm of Financial Consultants were looking to raise £50,000 to cover recruitment costs. The loan is secured via Personal Guarantees from the directors and has a reserve interest rate of 12% pa. An upbeat description of the company's activities was provided although some concern was expressed in the Q&A about the number of former businesses one of the directors has had in the past. The response was that none of these had any outstanding debt when they closed. If I was active on FundingKnight, I would probably have placed a small investment in this company.

FundingSecure

Lent to Date: £17,761,624 – Figure updated at the start of each month.

There were 2 loans available to invest in when this blog was compiled.

Highlighted Loans: In their monthly newsletter at the start of December, FundingSecure set expectations quite low with regards to how many lending opportunities there would be in the run-up to Christmas however the site has actually been quite busy. Even on 23rd December there were two bridging loans looking to raise over £1.5 million in total then at lunch time on Christmas Eve, a £15,500 loan was added to the site with security provided by a variety of items including a 19th Century clock and artefacts from the Titanic. All these featured loans return 12% pa.

The Pound in my Pocket: As the offerings on this site are so popular, investors are restricted to a maximum bid amount for the first 24 hours of each loan. In the past fortnight I have purchased £100 worth of two loans and then sold half of the investments a week later on the Secondary Market at 1% premium for a profit of £1! Hopefully, these little bonuses will mount up over the course of time.

Platform news: There have been further tweaks to how the Secondary Market operates, sellers are now prevented offloading part loans if prospective buyers would make anything less than a 4% pa return.

Money & Co

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

There were no auctions taking place when this report was compiled however one ran for just 3 days in the middle of December providing acquisition funding of £150,000 to enable the takeover of a training establishment. The 3 year loan offered a return of 9% pa.

rebuildingsociety

Lent to Date: £8,567,425 – figure from 1 month ago. No updates since.

There are 2 auctions active on this site.

Highlighted Loan: Midland based builder was looking for £25,000 to expand into the North West. They already had a major contract in place. I had one problem with this loan… it was already fully funded and no further bids were being accepted when I viewed it.

ThinCats

Lent to Date: £145,859,000 – increase of £4,670,000 – 3.31% growth.

This platform has had a really busy fortnight with totals lent increasing by over £4.5 million

11 loans are available to invest in.

Highlighted Loan: With a return of 14.5% a loan to purchase a restaurant offers one of the best returns seen on the ThinCats platform. £150,000 is looking to be raised but this loan is preceded by another loan that has first charges over the premises in question and the personal and business guarantees. Capital and interest will not be paid until the loan mature hence the high risk/reward.

Invest & Fund

Lent to Date: Over £1 million

There was one auction listed that required funding.

Highlighted loan: A bridging loan for over £1 million to redevelop a property in London. Investors are offered a return of 10% with a LTV of 56%. There will be no capital or interest repayments until maturity which is better news for the borrower than investors who have everything at risk for the entire term.

Platform News: Invest & Fund have advised that a further 3 loans are in the pipeline.

LendingCrowd

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

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

Highlighted Loan: I invested in a Scottish Events business looking to raise £95k of expansion capital. Their proposition was superbly written and, as they had been given a C Band risk rating, I put in a bid at 13.9% pa.

ArchOver

Lent to Date: £10,915,000 – increase £370,000 – 3.51% growth.

On Christmas Eve a regular borrower on the site – a company providing credit to SMEs – was raising £200k via 2 loans that had a 1 year and 2 year duration. These were offering returns of 6.5% and 7.5% respectively. This 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.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.22 Billion – increase of £20 million – 1.67% 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: £955,665,189 – increase of £26,767,538 – 2.88% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.2% to 6.1% depending on the length of the investment, the former is slightly up on 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: The nature of the Provision Fund has changed from being a discretionary trust to a legal company. This makes no change to the way it operates but it does mean that it will be a more robust entity.

Lending Works

Lent to Date: £18,615,800 – increase of £746,722 – 4.18% growth.

Lending Works is another P2P operator involved in personal loans that has seen an impressive increase in totals lent over the past fortnight.

Returns: 4.7% and 6.1% for 3 and 5 year investments respectively – unchanged 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.