End-April P2P Lending Platform News Round-up

Totals lent to date (24th April 2019)

*All data correct at the time this blog was compiled.

LOANS TO BUSINESSES

Assetz Capital - £775,700,000

Crowd2Fund - £27,010,000
Funding Circle - £5,000,000,000
FundingSecure - £303,570,210
Money & Co - £6 million approx
Rebuildingsociety - £15,200,000
ThinCats - £443,539,000
Invest and Fund - £60 million
LendingCrowd - £57,325,556
ArchOver - £95,986,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.1 billion

Lending Works - £166,945,669

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £775,700,000 - £6.2 million growth (0.81%) in the past fortnight.

When this blog was compiled, there were 95 loans in the pipeline with 2 imminently due to be drawndown.

Highlighted Loan: Property Developer in the Midlands requested their first <£449k tranche of a facility valued at almost £2 million. The first drawndown will clear a bridging loan used to purchase the site and allow Assetz Capital to take over the First Charge from the previous lender. Remaining tranches will be used to fund development costs. The loan is expected to be repaid from sales proceeds when the GDV will be 65%. The borrower is reported to have plenty of experience with projects of this nature therefore the return of 7.5% pa caused me to believe this was a reasonable investment.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across different sections of the platform's portfolio and are covered by a discretionary Provision Fund (the target rates of return are in brackets):

Quick Access Account (4.1% pa)

30 Day Access Account (5.1% pa)

90 Day Access Account (5.75% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Crowd2Fund

Lent to Date: £27.01 million.

Since the last blog, I have received 5 email notifications about new auctions launching on the site.

Highlighted Loan: Electrical wholesalers requested £128k to increase their stock levels. Their strategy is to undercut competitors thus their margins are very tight nonetheless they have been very successful with their most recent annual profits hitting £98k. I always feel lending to buy stock is risky in case it doesn't sell and, even with a return of 13% pa, I wasn't tempted. A larger company with even bigger buying power could undercut this business.

Funding Circle

Lent to Date: £5 billion

Funding Circle are unique amongst the major P2P platforms that lend to SMEs in not allowing investors to choose who they lend to. Instead two managed accounts are offered which distribute funds across differing risk profiles of loans within their portfolio. These options are projected to offer returns in the ranges of 4.3% - 4.7% pa and 4.5% - 6.5% pa.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site express concerns over the apparent lack of due diligence that is undertaken although Funding Circle's pursuit of bad debt is reportedly better than any other platform. Nonetheless, the official projected rates of return have been on a downward trend for some months – as underlined in the Platform News section.

Platform News: In the space of what seems to be a matter of months, Funding Circle have made a further revision downwards to their projected rates of return. Their riskier "Balanced" offering has had the lower element of the prediction reduced by a whole 1% pa so that they are advising investors to expect a return of between 4.5% and 6.5% pa. This range is so wide, they may as well just say they have no idea what income will be returned! The upper and lower values that make up the range for the safer "Conservative" product are both around 0.5% pa lower.

FundingSecure

Lent to Date: £303,570,210 at end of March – figures updated monthly.

When this blog was compiled there were 6 auctions taking place.

Highlighted Loan: A borrower required £308k to purchase a former ecclesiastical dwelling in South Wales which they plan to renovate before refinancing on a buy to let mortgage. The work require is reportedly not substantial therefore FundingSecure judged that a 6 month term would be adequate. The LTV was a high 70% which deterred me from taking up the 13% pa rate of return that was available.

Defaults: A little worryingly, there have been very few updates in the past fortnight on the many late loans I have on this platform. Hopefully, this is just due to the Easter holidays.

Money & Co

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

There were 2 auctions taking place when this blog was compiled and one of these appeared to be the first new borrower (to retail investors at least) since a German Property Developer launched a stream of funding requests last Summer.

The new customer was another Property Developer although this one was based in the North East of England. They wished to add 3 dwellings to their buy-to-let portfolio and requested a £150k capital injection however there were no details of the security being offer, indeed just like the German Property Developer, there was no financial information provided whatsoever although standard Money & Co policy is to lend against no more than two-thirds of the value of the security. Investors were offered a return of 8% for another apparent shot in the dark.

Platform News: I guess the aforementioned lack of detail about individual borrowers is a sign of things to come as Nicola Horlick – founder of Money & Co – has announced plans to offer investors a portfolio rather than allowing them to choose the individual loans they wish to get involved in.

rebuildingsociety

Lent to Date: £15,200,000.

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

Highlighted Loan: Returning borrower requested £131k to help fund the latest addition to their portfolio of fuel stations. They have a good track record of repayments and the latest site, which is profitable, was being sold by the owner who is retiring. It is expected that upgrades to the shop area will generate further revenue. I had invested with the borrower previously and decided to do so again for a return of 20% pa.

ThinCats

Lent to Date: £443,539,000.

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

Highlighted Loan: Independent Financial Advisors were looking to expand through acquisition and requested £271k to progress their first take-over. This was the first tranche of a facility totalling >£575k to finance a transaction that will take 2 years to complete. The fact that it will take so long to raise the required funds coupled with the business' lack of experience in merging with other enterprises led me to believe this was very high risk for which the 9.5% pa return offered was too low.

Invest & Fund

Lent to Date: £60 million – latest figures

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

Highlighted Loan: Property Developers from the Midlands requested their fourth >£62k tranche from a £720k facility to convert disused commercial premises into 10 apartments. The latest report from the Monitoring Surveyors did not highlight any issues and when completion occurs (scheduled for August) the GDV is expected to be 53% which makes the return of 8% look good.

LendingCrowd

Lent to Date: £57,325,556 – increase of £804,840 (1.42%) in the past fortnight.

This site has been relatively quiet over the Easter period but on the evening this blog was compiled, 2 auctions were listed.

Highlighted Loan: Landscape Gardeners requested £82.5k to fund their ongoing expansion. Their Annual Profits and Net Assets comfortably covered the amount being borrowed at £192k and <£300k respectively however these figures were 18 months out of date. Anything could have happened since that time so I gave this a miss. When I reviewed this offering, other investors were getting an average return of 7.73% pa.

ArchOver

Lent to Date: £95,986,000.

There were 4 auctions taking place when this blog was compiled.

Highlighted Loan: An Asbestos Removal company requested £185k to refinance an existing ArchOver loan as they look to consolidate their offices and warehouse facility in one location during the course of the Summer – this will save £85k per year. Security is provided via a charge over future income and insurance was provided by Coface. Investors were offered a return of 6.7% pa.

CapitalRise

Lent to Date: £25 million approx. (latest available figure)

No loans were added to the site in the past fortnight.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.1 billion – latest figure available.

Returns: Interest rates are set according to supply and demand. They currently range from 3.1% pa to 5.6% pa depending on the length of the investment. These figures have diverged in the past fortnight as the lower rate has reduced by 0.6% and the higher one increased by the same amount.

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 has received the Queen's Award for Enterprise in recognition of its excellence in innovation.

Lending Works

Lent to Date: £166,945,669 – an increase of £2,906,724 in the past fortnight – 1.77%.

Returns: 5.0% pa and 6.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. These rates have been locked until 5th May to avoid volatility during the busiest time for IFISAs.

As well as a Provision Fund to cover investor's risks, 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.