Mid-June's P2P Lending Platform News Round-up

Totals lent to date (13th June 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £529,000,000

Crowd2Fund - £17,120,000
Funding Circle - £3,400,000,000
FundingKnight - £31,485,000
FundingSecure - £251,633,026
Money & Co - £6 million approx
Rebuildingsociety - £12,700,000
ThinCats - £287,253,000
Invest and Fund - £3 million plus
LendingCrowd - £35,989,356
ArchOver - £68,616,000

PERSONAL P2P LENDING

Zopa - £3,370,000,000
RateSetter - £2,500,000,000

Lending Works - £112,876,709

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £529,000,000 - £11.3 million growth (2.18%) in the past fortnight.

After the downward blip reported in the last blog, volumes have returned to typical levels.

When this blog was compiled there were 76 loans in the pipeline with 3 imminently due to be drawndown.

Highlighted Loan: A Bridging Facility of <£125k was required by a borrower in Northern Ireland to pay for an architect to draw up plans for an apartment block on the site of a former fuel station. The site had been purchased from the Developer's father (such a close family involvement is always a concern to me) and the borrower had been in a state of bankruptcy for 12 months in the early 2010s. Although the LTV was 45%, what value would the site have if the architect's plans failed to meet the council's approval? Assetz Capital seemed to share my concerns as investors were offered a return of 10% pa – quite high for this site – but not high enough to tempt me!

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)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Platform News: Assetz Capital have undertaken a modest overhaul of the functionality of their website. One useful new feature enables investors to view how much they have automatically invested in any individual loan via the Managed Accounts. As I have some funds deposited in the Great British Business Account but also like to self-select, it will help me to avoid over-committing to any individual borrower although I have recently changed my strategy to invest larger amounts in specific loans with the intention of selling my holdings before maturity.

Crowd2Fund

Lent to Date: £17.12 million – latest available figure.

Over the past 2 weeks, 9 auctions were listed on the site.

Highlighted Loan: Renewable Energy Experts were looking to raise £53k to hire more staff and purchase hardware to grow their business. Profits last year were double the amount being borrowed although there was a loss in the previous 12 months. Net Assets were very healthy. The loan was Director Guaranteed but there were no details of their assets. For this shot in the dark, investors were offered a return of 11% pa.

Funding Circle

Lent to Date: £3,400,000,000

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 return 4.8% pa and 7.2% 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.

Platform News: Funding Circle have withdrawn investor's access to their loanbook and in future will only provide statistics on the performance of the platform's portfolio on a quarterly basis. This is a huge backwards step in terms of transparency and takes the platform closer to becoming the type of bank that the P2P industry was supposed to be the antithesis of.

FundingKnight

Lent to Date: £31,485,000 – no change.

There were 0 auctions ongoing when this blog was compiled – only 1 loan appeared on this site during 2017. The platform is planning a relaunch at some point in 2018 but there have been no signs of life so far.

FundingSecure

Lent to Date: £251,633,026 at end of May – monthly growth of £5,273,746 (2.14%).

Today 1 auction was launched on the site.

Highlighted Loan: The owner of two derelict pubs in a Northern city renewed their £114k loan while they await planning permission to demolish the premises and construct a hotel. Their submission has been agreed in principal by the local council and, once granted, refinancing via a development loan will be arranged. I felt this was worth a gamble for a return of 12% pa but will be happy to sell prior to maturity.

Defaults: Not much news (good or bad) on my defaulted loans over the past fortnight. FundingSecure, however, have announced they have decided to allocate more staff to managing late loans. FundingSecure only default loans where they consider there is no chance of the borrower repaying but where there is clear evidence of refinancing or a likelihood of a sale, they will extend the term – seemingly indefinitely in some cases. This appears to be quite a shift of policy compared to when I began investing on this site at which time the platform was an online pawn broker. I think an increase in returns to investors should be considered.

Wheeling & Dealing: I have 3 loans that have been slow to sell despite offering a discount – let's hope if they are not taken off my hands that they don't fall into the "late" category.

Money & Co

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

When this blog was compiled there were 2 auctions taking place. Throughput on this site is centred upon repeated borrowing by the same businesses.

Highlighted Loan: The company that is willing to buy any home is still waiting for its seventh £200k tranche of funding to be filled – I believe it was listed when I compiled the last blog a fortnight ago. It is still 16% away from the target. My issue with the business plan of this operation is that it buys properties at 80% of the market value which is significantly higher than the 70% maximum LTV that most P2P sites require as security.

rebuildingsociety

Lent to Date: £12,700,000 – £300,000 growth (2.42%) in the past fortnight.

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

Highlighted Loan: Care agency was looking to raise >£81k to help with Working Capital for newly won contracts. They also wished to incorporate their operations into a limited company. Security was provided by Personal Guarantees and a Second Charge over a property. I re-invested some repayments at the maximum bid rate which was 15% pa for this loan.

ThinCats

Lent to Date: £287,253,000 – £1,364,000 growth (0.48%) in the past fortnight.

There were 0 auctions taking place when this blog was compiled (the above growth appears to be due to loans mentioned in the previous blog being drawndown).

Invest & Fund

Lent to Date: Over £3 million

There were 0 auctions taking place when this blog was compiled.

Highlighted Loan: A Property Developer in the Midlands who is constructing the second phase of a development to construct 7 houses on former farmland returned for a seventh >£46k tranche of funding (total facility >£3.1 million) as the third and fourth dwellings approached completion. Investors were offered a return of 9.5% pa.

LendingCrowd

Lent to Date: £35,989,356 – fortnightly increase of £1,359,180 – 3.92% growth.

1 new auction was listed on this site on the morning this blog was compiled.

Highlighted Loan: Owners of a couple of supermarkets in London requested >£85k to refurbish one of their premises however, while Net Assets comfortably covered the amount being borrowed, the most recent profit figure was £28k. There was no indication of the security that was backing this proposition. Given the low profit figure, I was surprised LendingCrowd gave this an A rating. When I reviewed this loan, investors were getting an average return of 9.48% pa but I wasn't tempted.

ArchOver

Lent to Date: £68,616,000 – no charge.

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

Highlighted Loan: Providers of financial analytical software were looking to raise up to £300k to help with the transition of their business model from the delivery of projects to providing ongoing services. This funding will add to the half million pounds already borrowed via ArchOver. Security was provided by a charge over future income and a return of 7.25% pa was offered.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.37 billion – an increase of £40 million over the past 2 weeks – 1.2% growth.

Returns: Zopa's 2 accounts offer returns of 4.0% and 4.6% pa with the latter allocating some funds to riskier loans that offer higher returns.

Zopa distribute investor's money mostly to unsecured consumer loans.

Ratesetter

Lent to Date: £2.5 billion.

Returns: Interest rates are set according to supply and demand. They currently range from 2.3% pa to 4.3% pa depending on the length of the investment. These figures have reduced by 0.5% and 0.7% compared to a couple of weeks 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: Ratesetter's promotion which sees £100 given to new investors who lend £1,000 for a year ends on 30th June.

Lending Works

Lent to Date: £112,876,709 – an increase of £2,987,606 over the past 2 weeks – 2.72% growth.

Lending Works have passed the £100 million lent mark.

Returns: 4.5% pa and 6.0% pa via an IFISA or standard account for 3 and 5 year investments respectively. These have not changed over the past 6 weeks.

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