P2P Lending Platform News Round-up

by The Secret Investor

Ratesetter overtakes FundingCircle by lending more than them in the past fortnight… ThinCats list a £3.5 million loan which they claim is the largest ever on a P2P platform that is not secured by property. 

Totals lent to date (28th April 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £106,508,194
Funding Circle - £1,241,058,540
FundingKnight - £30,462,000
FundingSecure - £32,676,324
Money & Co –  £6 million approx
Rebuildingsociety - £9,457,677
ThinCats - £165,302,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £15,237,000

PERSONAL P2P LENDING

Zopa - £1,420,000,000
RateSetter - £1,176,070,993

Lending Works - £26,747,132

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £106,508,194 – increase of £2,814,088 – 2.71% growth.

It has been a busy fortnight at Assetz Capital with borrowers raising almost £3 million. This trend looks like continuing with 38 upcoming and pipeline loans listed when this blog was compiled.

The site was particularly busy last weekend with 4 bridging loans being drawn-down. These covered quite a diverse range of assets – wind turbine, recycling site, property and a piece of land being purchased with the possibility that it will be purchased by a nationwide chain of coffee shops. The first three of these offered returns of around 8% and, as the Great British Business and Green Energy Income Accounts return 7% with the protection of a provision fund, I didn't believe the slightly higher rate made it worthwhile investing directly into these loans.

The final offering promised a return of 9.84% pa (precisely!) but, although the borrower made positive comments, there was no firm agreement that the coffee empire would add this specific location to its portfolio. The LTV however was very low at 34% but I would have been looking for a return well into double digits before investing.

Funding Circle

Lent to Date: £1,241,058,540 – increase of £27,211,440 – 2.24% growth.

In early March the total lent figure was increasing at over £30 million per fortnight but then it reduced to £24 million per 2 week period. Things seem to be on an upward trend again as since my last blog growth has been £27 million.

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

Secret Investor's Activity: Despite Funding Circle offering iPads to those investing 5 figure sums before 16th May, loans continue to fill slowly enough for me to review and bid on them without resorting to turning on AutoBid.

Below are highlights from my activity in the past fortnight:

Highlighted Loan Invested in:

Loan of £52k to enable an IT business to service an expanding pipeline of work (C risk rating, 11.9% return). A profitable business and hopefully the expected growth will materialise. The profits should cover the loan if it doesn't. It appears from the admittedly limited information available that it would require a major downswing in fortunes for the borrower not to be able to repay.

Highlighted Rejected Loan:

The good side of crowdfunding. High end audio/video installers were looking to raise £69k to pay off another loan (D risk rating, 14.1%). The Q&A alerted me to a number of discrepancies. Firstly, the borrower had taken out another FC loan for £50k a few days previously. Secondly, one of the queries prompted a quick Google search whereby I discovered the same company had a further loan from ReBuildingSociety that began last August. Presumably this was the one they were looking to pay off as it had a slightly higher interest rate however in the short time that loan had been active, many payments had been missed… despite apparently struggling to honour that debt they were almost doubling their borrowings. One wonders what Funding Circle's risk assessors were thinking of. One also wonders what other investors had in mind as the loan was fully funded just 2 hours after being listed. Presumably they were all auto-bidders.

Defaults: Although the site defaulted 10 loans last week, I have not had any of mine go bad in the past fortnight and, thanks to the debt restructuring plans that were set up a few months ago, I now have a steady trickle of recovery payments coming in. These equate to roughly £15 a month.

FundingKnight

Lent to Date: £30,462,000 – increase of £35,000 – 0.12% growth.

There was 1 auction ongoing when this blog was compiled.

Highlighted Loan: A trainer of Sales Executives was looking to raise £35k of expansion capital. They are part of a franchise but are looking to garner more trade directly as there is no commission to pay in those circumstances. As with any funding for growth, there is a risk that the extra business will not materialise however even if this does not happen then it appears from the balance sheet that the loan would still be affordable over its 2 year term. The Target Interest Rate is 12.5% pa. This seems like a good deal.

FundingSecure

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

At the time this blog was compiled, 5 auctions were taking place.

Highlighted Loan: One of the largest loans FundingSecure listed this month was for a property developer looking to raise £852k to convert a hotel in Wales into retirement flats. As all except one of the rooms already had wheelchair accessible en suite bathrooms this seemed a very feasible project. Those with the capital available could add 4% pa to the 12% pa base rate if they invested £100k

Waiting for assets to be sold: Still no major developments on the 4 loans I have invested in which have repayments overdue although a set of expensive carpets and a prestige car are up for sale.

Going for a song: FundingSecure was the recipient of April's P2P capital injection from the Secret Investor. Towards the end of the month I still had some capital waiting to be invested so I ventured into the Secondary Market. There were quite a large number of loans being sold at discounts, the highest of which were 0.75% on loan parts that had been purchased at 16% pa. I was happy to pick these up.

Money & Co

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

The auction to fund a city professional looking to raise £307k to purchase two coffee shops in the North of England is coming to a close. All the capital has been raised.

rebuildingsociety

Lent to Date: £9,457,677 – increase of £40,080 – 0.43% growth.

5 auctions were active on this site when this blog was compiled.

Highlighted Loan: This site appeared to display the bad side of Crowdfunding. A borrower owned a couple of chip shops and was looking to raise £50k to undertake some refurbishment work. Despite being an established, profitable business a minority of the site's investors asked some quite aggressive and personal questions which didn't appear to have any relevance. There have been a number of defaults on this site which may have made everyone "jumpy" (one of the borrowers I lent to recently omitted to provide information about other loans they had taken out and are now defaulters) but, even so, such behaviour can only be detrimental to P2P Lending as it will put off potential "good" borrowers.

ThinCats

Lent to Date: £165,302,000 – increase of £2,175,000 – 1.33% growth.

This is quite a busy site at the moment with 12 auctions active when this blog was compiled.

Highlighted Loans: A manufacturer of large format circuit boards that are currently used at mobile phone mast locations is looking for £300k of expansion capital to transfer its technology into other arenas such as the aerospace and automotive sectors. Their offerings would provide significant weight savings in comparison to the wiring harnesses currently used. The borrower claims no other company produces comparable items which, if true, makes the 12% pa return very attractive.

Platform news: Thin Cats claim to have listed the largest non-property secured P2P loan when a specialist insurance company raised £3.5 million to consolidate existing lending. The deal was underwritten by ThinCats' owners ESF Capital but the site's investors were still requested to contribute £1 million. Due to the perceived low risks of lending to such a large organisation, the return was 9% pa.

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 2 auctions taking place when this blog was compiled.

Highlighted Loan: An operator of care homes in the Midlands was looking to raise £250k to undertake a programme of refurbishments. It is a very profitable business with an expected turnover of £10 million by the end of the decade. I was happy to invest at 11.7% pa with the slight concern as to whether the business will be able to cope with the growing pains of expansion. Risks must be taken to obtain double digit returns however.

ArchOver

Lent to Date: £15,237,000 – latest figure available.

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

Highlighted Loan: Structural engineers who are involved in large scale projects – such as the plant that produces the new polymer banknotes – is looking to raise £1 million to expand their business and also to clear their overdraft. The loan will be repaid over 2 years at a healthy rate of 7.25% pa considering that the capital has a high level of security in the shape of a first, floating charge on the borrower's Accounts Receivable and the loan is also insured.

INVESTUP PORTFOLIO

There were 21 auctions taking place when this blog was compiled. All bar one of these 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 one loan not listed on sites elsewhere in the blog was a 12% pa interest only 3 year deal of up to £0.5 million to a finance house that enables motor dealers to buy stock. This is quite a good return although investors will have no direct visibility of who their funds are lent to as the finance house are just the middle men. Ablrate are the platform hosting this deal.

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.

Ratesetter

Lent to Date: £1,176,070,993 – increase of £28,118,460 – 2.45% growth.

Ratesetter are growing at an even faster rate than Funding Circle.

Returns: Interest rates are set according to supply and demand. They currently range from 3.0% 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.

Lending Works

Lent to Date: £26,747,132 – increase of £716,008 – 2.75% growth.

Returns: 4.7% and 6.1% 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.