Secret Investor: Assetz Capital lower cost of borrowing and Zopa ties up with Saffron Building Society

Totals lent to date (5th October 2017)

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

LOANS TO BUSINESSES

Assetz Capital - £352,430,481

Crowd2Fund - £4,000,000
Funding Circle - £2,759,018,366
FundingKnight - £31,485,000
FundingSecure - £162,140,508
Money & Co - £6 million approx
Rebuildingsociety - £11,800,000
ThinCats - £254,955,000
Invest and Fund - £3 million plus
LendingCrowd - £19,138,036
ArchOver - £47,630,000

PERSONAL P2P LENDING

Zopa - £2,660,000,000
RateSetter - £2,099,808,816

Lending Works - £71,919,952

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £352,430,481 – fortnightly increase of £28,623,491 – 8.84% growth.

This is the site's highest fortnightly growth.

When this blog was compiled there were 65 loans in the pipeline with 1 imminently due to be drawndown.

Highlighted Loan: Property Developer in London was looking to raise £2.375 million to fund a variety of small projects. Security is provided by the site of a former car dealership which is close to receiving planning permission for a combined 6 storey residential/retail development. The LTV is 55% although this may change if the planning authorisation is turned down (AC report this is unlikely to happen). Further security is provided by a Company Debenture and a Personal Guarantee. An additional concern is that the borrower's spouse has served a jail sentence for smuggling. Given the downsides to this loan, it is no surprise that investors were offered a return of 9% pa. This was still too low to tempt me however. Nonetheless, the amount of detail AC provide about loans is greatly appreciated.

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 (3.75% pa)

30 Day Access Account (4.25% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account (7% pa)

Green Energy Income Account (7% pa)

Platform News: Assetz Capital have cut their rates for certain property backed loans. When listed in the Manually Selectable section of their platform these are offering investors returns as low as 5% pa – less than the target return on AC's Provision Fund covered Property Secured Investment Account. Many are surprised at the lowering of rates given there is a consensus of opinion the property market is due for a reset.

Crowd2Fund

Lent to Date: £4 million – latest figure available.

There were 3 auctions added to the site in the past fortnight. As loans are listed for 30 days, only recent additions are noted in this blog.

Highlighted Loan: Food packagers returned to Crowd2Fund to raise £30k to fund recruitment and marketing. Their most recent profits just about covered the cost of the loan but Net Assets were negligible. As the term was only for 24 months, it seemed as though it would be a struggle to cover the loan if the marketing activity failed to attract significantly more business.

Funding Circle

Lent to Date: £2,759,018,366 – fortnightly increase of £49,819,125 – 1.84% growth.

Since this became a AutoBid only platform the navigation menus no longer include any links to the page that lists loan requests however it is still accessible if you directly enter the URL (fortunately it was still in my browsing history). The facility to bid on individual loans has been removed but at least the borrowers who are raising capital via the platform can be monitored although their financial summary information – a source of key information – is no longer available.

When this blog was compiled, there were no loan requests listed but as funds are automatically allocated, all requests for capital are rapidly met.

Highlighted Loan:

Recently, a drone hire company was raising >£31k to purchase surveying equipment to fit on their remote controlled micro aircraft. This was an A rated loan offering a return of 7.3% pa. It was good that an asset was being purchased and hopefully it will increase demand for the drones although, with no financial information available, the loan cannot be properly assessed.

Defaulted Loans Update: Last week wasn't too good with 2 defaults. The first was to a hair and beauty salon but Funding Circle never provided an explanation for the default! However, the borrower's repayments had been patchy and the plan to bring things back on track by selling a property never materialised. I have £63 outstanding.

The other loan was to builders who have entered a formal insolvency process. With £31 of my capital unpaid this brought the total loss to over £100 in 1 day.

I had one further default this week. The borrower was a high-clothing retailer in London. They are 4 months in arrears having only made 7 repayments. Fortunately, my initial investment was just £20, less than £2 of which have been repaid.

Despite reducing my exposure on Funding Circle, the defaults keep on coming. Whether this due to an economic down turn or the platform's policy of processing loan requests as fast as possible, I am not sure.

FundingKnight

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

There were 0 auctions ongoing when this blog was compiled – only 1 loan has appeared on this site in 2017. The platform is planning a relaunch in 2018.

FundingSecure

Lent to Date: £162,140,508 at the end of August – total updated monthly and September's data has not yet been released.

Today 1 auctions appeared on the site.

Highlighted Loan: A £52.5k loan secured against a Porsche racing car was renewed last week. I had invested in the original loan but opted not to renew as the borrower doesn't appear to have an exit strategy. Although the LTV is 50%, racing car values tend to plummet at the end of each season as new, improved models are launched for the following year.

Defaults: I have had my second loss on this site. £75 worth of capital was reduced to £22.84 when the asset was sold at much less than the original valuation figure. FundingSecure are trying to make further recoveries from the borrower and have asked for details of the loan not to be published so I won't blow their cover except to say this was an asset class they were unfamiliar with and I will aim to only invest in loans secured against assets in areas where FS have experience in future.

Money & Co

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

When this blog was compiled there was 1 auction taking place. This was the sixth tranche of funding to facilitate the take-over of a financial services company which was highlighted in previous blogs.

rebuildingsociety

Lent to Date: £11,800,000 – fortnightly increase of £100,000 – 0.85% growth.

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

Highlighted Loan: Building Contractor was looking to raise >£26k to provide Working Capital for a £1.8 million project to construct flats. The funding was required while the borrower waited to receive a soon-to-arrive grant worth £650k from the council who have also agreed to buy the premises on completion. Despite the prospect of seemingly guaranteed repayment, investors could put in bids up to 20% pa.

This sounds almost too good to be true but this loan is the first of the new breed on ReBS where VAT receipts have been submitted in lieu of the most recent set of Management Accounts. I assume this is why the borrower has not been able to raise finance from somewhere that offers lower rates of return.

If this loan is as good as it sounds then ReBS may have come up with a niche that will be a honeypot for investors. I have made bid so will find out whether this is fool's gold or the real thing.

ThinCats

Lent to Date: £254,955,000 – fortnightly increase of £7,150,000 – 2.89% growth.

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

Highlighted Loan: Owners of a Central London Boat Business were looking to raise £6.7 million to refinance the loan they used to buy the company last year and to provide working capital. The firm owns a considerable amount of prime real estate which provides an LTV of 45%. The loan has been fully underwritten by ESF Capital, ThinCats' owners, and investors are offered a return of 8.5% pa.

Platform News: ThinCats have announced plans to open up their platform to institutional investors. While this is good news for borrowers as it will create a larger pool of capital to fund their requirements, TC say this will also benefit investors as it will bring a greater number of loans to the site allowing diversity to increase.

Invest & Fund

Lent to Date: Over £3 million

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

LendingCrowd

Lent to Date: £19,138,036 – fortnightly increase of £858,190 – 4.69% growth.

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

Highlighted Loan: Convenience store in the Midlands required £54.5k for refurbishments. The financials weren't that brilliant and the proposal was pretty basic (and repetitive) so I decided to pass even though the average rate of return was 12.5% when I reviewed this loan.

ArchOver

Lent to Date: £47,630,000 – fortnightly increase of £1,033,000 – 2.22% growth.

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

Highlighted Loan: Firm of accountants returned to ArchOver to refinance £250k that had been lent by the platform to consolidate existing debt and to fund expansion plans. The loan was secured via a charge over Accounts Receivable and insured by Coface. With a return of 7% pa, the loan proved popular and it took no time for the funding requirements to be met.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £2.66 billion – fortnightly increase of £30 million – 1.14% growth.

Returns: Zopa's 2 accounts offer returns of 3.7% and 4.5% pa with the latter allocating some funds to riskier loans that offer higher returns.

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

Platform News: In future, Zopa investors will be lending money to borrowers from the Saffron Building Society via 11 branches across Hertfordshire, Essex and Suffolk. Funding customers in the High Street will result in P2P lending becoming even more mainstream.

Ratesetter

Lent to Date: £2,099,808,816 – fortnightly increase of £28,657,517 – 1.38% growth.

This is the site's highest fortnightly throughput since July.

Returns: Interest rates are set according to supply and demand. They currently range from 3.9% pa to 5.5% pa depending on the length of the investment. The lower rate has increased by 0.3% but the higher rate has reduced by 0.4%.

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: £71,919,952 – fortnightly increase of £1,420,509 – 2.01% growth.

Returns: 4.0% pa and 5.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. The latter has increased by 0.3% compared to a fortnight ago and has risen by 0.5% over the past 4 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 Advisor.