P2P Lending Platform News Round-up

by The Secret Investor

Totals lent to date (26 th May 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £109,545,470 

Funding Circle - £1,295,508,960

FundingKnight - £30,712,000

FundingSecure - £37,072,593

Money & Co –  £6 million approx

Rebuildingsociety - £9,532,677

ThinCats - £173,350,000

Invest and Fund - £1 million plus

LendingCrowd - £4.5 million

ArchOver - £16,862,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000

RateSetter - £1,223,401,526

Lending Works - £28,224,181

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £109,545,470 – increase of £1,362,000 – 1.26% growth.

With 6 loans due to be drawn down around the time this blog was compiled and a further 35 in the pipeline, the turnover on this site continues to be healthy.

Highlighted Loan: 

A couple of loans were due for drawdown yesterday. One of these was to raise £281,250 to help with the purchase of a hotel in Wales. The borrowers had successfully run this business a decade previously before moving to Italy. They returned to find the hotel in receivership but have sound plans to restore the balance sheet. With a proven track record and an LTV below 50%, an annual return of 9% pa looks good value.

Platform News: 

Assetz Capital's 30 Day Access Account with its 4.25% pa rate of return has certainly proved very popular with £5 million invested within 3 weeks of the launch.

Certainly a better level of interest than many bank accounts.

Funding Circle

Lent to Date: £1,295,508,960 – increase of £28,752,860 – 2.27% growth. This fortnight has seen the highest growth since the end of March. Not sure whether this will continue as there were 27 new loan requests were listed on the site when this blog was compiled – roughly half what it was two weeks ago.

Secret Investor's Activity: 

This remains the site which I have the most exposure to because they have the largest number of loans listed.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Loan of £101.8k to an expanding franchise that operates after school and holiday clubs for kids (D risk rating, 13.8% pa return). I was impressed by their turnover which has doubled to over £1 million in the most recent set of figures. Profitable business too. There are risks – are the management team capable of coping with the continued rapid growth? The credit rating was also quite low. For such a good rate of return, risks have to be taken however.

Highlighted Rejected Loan: 

No loans rejected in the past fortnight although one was very close. There was a 12 word proposition which didn't give any information about the company. Fortunately, the borrower responded in the Q&A more than adequately. They were a wholesaler and retailer of drinks who was looking to refinance their expensive debt facilities. Turnover had increased 8 fold in the past 12 months – that was a major factor in my decision to invest. Hope it is not a flash in the pan. The loan was for £52,640 and risk band C with a 11.9% pa return.

Defaults: 

None of my loans defaulted in the past fortnight. I have invested in almost 500 businesses via this site.

FundingKnight

Lent to Date: £30,712,000 – increase of £50,000 – 0.16% growth. There were 0 auctions ongoing when this blog was compiled.

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.

Highlighted Loan: 

At the start of the month, FundingSecure expected May to be a relatively quiet period, however I think they are going to be proved wrong as they have been providing investors with plenty of loans with which to diversify their holdings – mostly to property developers. My favourite of these was to a borrower in Newcastle who had been let down by another lender and was therefore looking for £720k in a hurry to avoid missing out on  purchase. He was therefore offering higher than usual returns of 13% pa to smaller investors while those with more capital available were being tempted with rates of up to 17% pa. Buying Second Hand: Good deals continue to abound on the secondary market. When cash comes into my FundingSecure account I now always look at the loan parts being sold before checking the auctions. Returns in the mid-teens are usually available on loans being sold at a discount.

A State of Recovery: 

The debt on one of my four loans that are in trouble has been recovered following the sale of a motor vehicle. It is impressive how quickly things have happened as it is only 6 weeks since the loan was defaulted. This compares well with other sites which often have to set up 5 year payment plans with guarantors. Just goes to show the value of asset backed lending.

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: £9,532,677 – increase of £75,000 – 0.16% growth. 

The site has undertaken some very interesting number crunching. Had the same amount been invested in all the loans ReBS have hosted since inception this would have provided a return of 15.5% Annual Equivalent Rate (AER) after bad debts. Most interesting of all is the impact that the level of security has on investor's income. Where loans were only covered by personal guarantees (ie not backed by assets such as property) the returns fall to 8.88% AER.

Highlighted Loan: 

A small Indian restaurant chain is looking to raise £50k to develop their online delivery service. The business was making good profit and security was provided by both a company and personal guarantee. Looking to maximise my returns, I have bid at the highest rate of 17% pa (albeit I was only re-investing repayments which amounted to a tenner!).

Platform News: 

Rebuilding Society have taken action to try to encourage lenders to make bids earlier in auctions. They will pay the average rate of interest as at the end of the auction from the point where an investor places a bid. Therefore, if a bid is made 5 days before the end of an auction, the lender will be paid (by ReBS) for those days. The scheme will be active until the end of June and will be reviewed at the point. It may become a permanent feature of the site. Certainly the length of time funds are inactive on this site is a concern and, judging by how well loans had filled when this blog was compiled, the measure has had a positive effect.

ThinCats

Lent to Date: £173,350,000 – increase of £3,045,000 – 1.79% growth. There were 4 auctions active when this blog was compiled.

Highlighted Loans: 

A regular ThinCats borrower, a broker who finds capital for property developers, is looking to raise £400k. This is their thirteenth such loan and offers a return of 10% pa. A debenture over the brokerage business is offered as security plus a personal guarantee. 

Platform News: 

The ThinCats Lending Club (TLC) are currently raising their 41 st loan. This will be re-invested in multiple loans on the ThinCats platform. Although the minimum investment is still £1,000 the TLC enables small and/or less experienced investors to use the site while still seeing their assets diversified. The downside, when compared to other sites, is that there is no control over the borrowers that funds are lent to. The target rate is 8% pa but bonus payments are made at the end of the term if additional profits are made. As most loans on the ThinCats platform offer returns over 10% pa, such profits are likely to occur assuming there are no defaults. There is no provision fund so, in the worst case scenario, investors could receive less than 8% or even lose their capital. The Secret Investor has only recently understood how the TLC works. Although he likes to pick and choose who he lends to, this does seem very appealing. When available via an IFISA, he could get involved.

Invest & Fund

Lent to Date: Over £1 million

There were 3 auctions taking place when this blog was compiled although they were all about to close. All were bridging loans totalling £222k to the same property developer. The loans were of a 3 month duration and offered very high returns of 19.5% to 21%.

LendingCrowd

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

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

Highlighted Loans: 

A prestige car sales operation was looking to raise £200k which will be paid back over 4 years to set up a dealership. LendingCrowd gave the business an "A" rating and the average rate of return at the time of writing was just under 10% pa. However, I have some concerns as the company has grown rapidly through enabling customers with a high profile to purchase vehicles discreetly from home. They seem to be moving away from the distinctive USP that has brought them success.

ArchOver

Lent to Date: £16,862,000 – no change although the figure does not seem to be updated regularly.

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

Highlighted Loan: 

Slowly but surely ArchOver are broadening the range of borrowers that they find funds for. This week they were raising £750k to enable a firm of research chemists to purchase an advanced refrigeration unit. Their existing facility no longer meets environmental standards and they are currently renting a compliant replacement. 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 CIFS.

Plaftorm News: 

ArchOver have announced a formal partnership with GapCap – provider of invoice financing. As these two companies serve borrowers with differing requirements, they plan to refer clients to each other.

INVESTUP PORTFOLIO

There were 18 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.

The number of loans listed on InvestUp from Crowd2Fund is increasing – no doubt their growth is due to them being one of the first platforms authorised to offer an IFISA. Their diversity is getting to the point where I am considering investing directly into that site to get tax free returns. One of their loans which caught my eye was to a tailoring business with Saville Row connections that is looking to expand into the Chinese market although this may not be as good a move as it would have been a few years ago given the declining rate of that country's economy. A subsidiary of the business has also signed a detail to supply suits to a major UK retailer so at least they haven't got all their eggs in one basket.

They were looking to raise £90k over 3 years. A return of 9.5% pa was on offer and, as an added sweetener, discounts of up to 25% were available to investors purchasing their products.

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.

Platform News: 

Zopa have launched a piece of software that plugs-in to retailer's websites to enable customers to get finance (subject to them meeting the criteria of the Zopa risk engine). One of the first to use this technology is mobile phone seller www.unshackled.com

Ratesetter

Lent to Date: £1,223,401,526 – increase of £21,501,721 – 1.79% growth.

Returns: 

Interest rates are set according to supply and demand. They currently range from 2.7% to 5.9% 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: £28,224,181 – increase of £701,268 – 2.55% growth.

Returns: 

4.7% and 5.9% 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.