P2P Lending Platform News Round-up

by The Secret Investor

On your marks… get set… wait! 6th April was supposed to be the start date for the Innovative Finance ISAs (IFISAs) but the Financial Conduct Authority (FCA) have only given the authority to offer such products to a small number of platforms – none of these are the major names… So the anticipated influx of funds from Cash ISAs will be delayed.

Totals lent to date (31st March 2016)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £102,221,106
Funding Circle - £1,189,680,620
FundingKnight - £30,357,000
FundingSecure - £25,672,899
Money & Co –  £6 million approx
Rebuildingsociety - £9,389,685
ThinCats - £161,495,000
Invest and Fund - £1 million plus
LendingCrowd - £4.5 million
ArchOver - £15,237,000

PERSONAL P2P LENDING

Zopa - £1,270,000,000
RateSetter - £1,124,289,312
Lending Works - £25,054,175

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £102,221,106 – increase of £3,160,350 – 3.19% growth.

Assetz Capital continues to be quite a busy platform and the £3 million lent in the past fortnight has taken the total for the site past the £100 million mark.

This growth looks set to continue as there were 40 upcoming and pipeline loans listed on the site when this blog was compiled.

Highlighted Loan: Hopefully this is not a jinx but I really liked the sound of a bridging loan that was scheduled to be drawn down yesterday (30th March). A developer was looking to raise £115k to release capital for their next project with security against 3 newly developed properties that were already on the market looking for buyers. Repayment is due following the first sale. Loan to Value was just 17% however, presumably due to the developer's lack of experience, the return was as high as 8.75% pa.

Platform News: For one month only… Assetz Capital have upped the interest rate on one of their fixed return protected accounts. The Quick Access Account will pay 4.25% pa for the month of April – up from 3.75%. This is quite a significant announcement as any unallocated funds are automatically placed here. The rates on the Great British Business and Green Energy Income Accounts remain at 7% pa.

Funding Circle

Lent to Date: £1,189,680,620 – increase of £24,103,320 – 2.07% growth.

Possibly due to the Easter holiday period, the total lent in the past fortnight was £7 million less than the previous one. The throughput is still massive at over £24 million.

41 new loan requests were listed on the site 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. Having said that, despite the lower volumes, many high return loans seem to be taking longer to fill recently and there were a few that I was able to bid on before the actions closed.

Below are highlights from my activity in the past fortnight:

Highlighted Accepted Loan:

Loan of £260k to help a firm of solicitors expand (D risk rating, 14.1% return). Profitable business but there were a couple of negatives – poor credit rating, size of loan, risk of expansion plans being unsuccessful – however to get a return of 14.1% pa, risks have to be taken.

Highlight Rejected Loan:

None! All loans that Auto-Bid added to my portfolio had reasonable propositions and good responses in the Q&As. With loans taking longer to fill lately this has given borrowers more time to provide answers.

Defaults: During the weekending 18th March, Funding Circle reported that they had defaulted 14 loans, a week later a further 11 were listed. In the latter category 6 were B rated or higher which tends to justify my focus on chasing high returns rather than low risk.

The number of defaults is the highest I can remember although, with an ever expanding loan book, an upward trend in this area is bound to occur.

In the past fortnight two of my borrowers became defaulters. Neither seem to be in a position to pay off the debt so it looks as though I have lost a total of just over £80. One of these was a care home – I always though healthcare was quite a safe area so this is something of a surprise. It will be interesting to find out what went wrong, if the borrower can be tracked down!

FundingKnight

Lent to Date: £30,357,000 – increase of £225,000 – 0.75% growth.

Loans continue to trickle through on this platform and there was 1 auction ongoing when this blog was compiled.

Highlighted Loan: A property developer looked to raise £125k across 2 loans which had 2 and 3 year terms. The extra capital was required to help the company meet increasing demand. There didn't appear to be any major reasons not to invest and the reserve rate of return was 11% pa (and 0.5% more for the 3 year loan).

FundingSecure

Lent to Date: £25,672,899 at the end of February.

We await the figure for March in the expectation of another record breaking month as there were 10 loans looking for funding when this blog was compiled.

Highlighted Loans: The number of bridging loans on this site keep on increasing – some of these have exceptionally low Loan to Value ratios. One of the best I have seen is 5.41%. Unless more than £10k is invested these deals offer 12% pa – still a healthy return which I am happy to accept as my limit is to invest no more than £80 per borrower on any platform. However last week I had the opportunity to invest in a loan that will earn 15% pa even to the smallest investor. Obviously, the higher return is a result of the greater risk involved – this was due to the security being provided by 2nd charges over 3 properties. First charges were to loans taken out by the borrower's ex-wife. I guess this has the potential to get messy if things don't go to plan which is why I invested the minimum amount - £25.

Waiting for assets to be sold: With it being Easter, there has been no progress with the sale of the assets relating to the 4 loans I have invested in that have repayments overdue.

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: £9,389,685 – increase of £54,090 – 0.58% growth.

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

Highlighted Loan: A teacher training business is looking to raise £50k to also offer accountancy qualifications. Security is provided by the property portfolios of two directors. This seems a fairly significant change to the market they operate in and concern was also expressed in the Q&A over the low profit margins which the borrowers hope to improve by negotiating their own contracts in future. Nonetheless, this seemed quite a risky investment although a return of over 16% pa on average had been secured.

ThinCats

Lent to Date: £161,495,000 – increase of £4,754,000 – 3.03% growth.

This has been one of the busiest fortnights on record for ThinCats.

There were 7 auctions active on this site when this blog was compiled.

Highlighted Loans: A computer games developer was looking to raise £150k to purchase the naming rights to produce Sherlock Holmes and Agatha Christie titles. They hope to release these in July. To my mind, murder mysteries appeal to an older generation than those who play computer games so I would be reluctant to invest in this loan despite a target interest rate of 14% pa. Further concern arises because although numerous items are offered as security, many are offered as second charges but at least the borrower has Personal Guarantee insurance.

Invest & Fund

Lent to Date: Over £1 million

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

Highlighted Loans: A property developer was looking to raise over £140k to complete 12 brand new flats. Although they had 15 years' experience of renovating properties this was the first time the borrower had undertaken a "new build" project. Given the risks of hitting unforeseen problems I felt a return of 9.5% pa was a little on the low side. Especially as it is going to be rolled up and paid at the end of the 18 month term. While not appealing to me as an investor, this looks to be an excellent deal for the borrower.

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 Loan: A jewellery manufacturer and wholesaler is looking raise £100k of expansion capital. The plans were very ambitious but lacked detail therefore I decided to pass on this particular deal. The average rate of return when this blog was being compiled was 10.66% pa.

ArchOver

Lent to Date: £15,237,000 – increase of £862,000 – 6.00% growth.

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

Highlighted Loan: Interest rates at ArchOver are increasing. An example of this is £100k of growth capital that Building Contractors based in London and the South East were looking to raise. Investors were offered a return of 7.25% pa which is 1% higher than typical loans on the platform were 6 months ago and putting them at a similar level to the protected accounts at Assetz Capital. Here at ArchOver loans are protected by a first, floating charge over borrowers' accounts receivable which will always be maintained at 125% of the value of the loan plus insurance is provided by Coface.

INVESTUP PORTFOLIO

There were 12 auctions taking place when this blog was compiled. All new loans were from sites covered elsewhere in this blog – reBuildingSociety, ThinCats and ArchOver – making this a good place to distribute funds from a central location.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.27 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: £1,124,289,312 – increase of £24,161,618 – 2.20% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.1% to 6.4% 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 released more details about their IFISA plans and, unlike other leading platforms, they expect to meet the FCA's requirements that investors keep their tax free funds separate from their other capital on the platform without forcing existing customers to open up a new account. There is no news as to when the FCA will allow this to be made available.

Lending Works

Lent to Date: £25,054,175 – increase of £992,984 – 4.13% growth.

Returns: 4.7% and 6.3% 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.