Secret Investor: Funding Circle become FCA authorised and Zopa launch their IFISA

Last post: Jun 1, 2017

Funding Circle have received full authorisation from the FCA although, looking ahead, they appear a little concerned as to how they will cope with the expected demand from investors when they introduce an IFISA product now they have permission to do so… Zopa are managing this problem by initially offering their IFISA to existing customers only

Funding Circle have received full authorisation from the FCA although, looking ahead, they appear a little concerned as to how they will cope with the expected demand from investors when they introduce an IFISA product now they have permission to do so… Zopa are managing this problem by initially offering their IFISA to existing customers only.

Totals lent to date (1st June 2017)

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


Assetz Capital - £259,029,279
Funding Circle - £2,342,529,869
FundingKnight - £31,485,000
FundingSecure - £119,466,284
Money & Co - £6 million approx
Rebuildingsociety - £11,500,000
ThinCats - £237,671,000
Invest and Fund - £3 million plus
LendingCrowd - £11,928,041
ArchOver - £36,023,000



Zopa - £2,320,000,000
RateSetter – £1,909,543,266

Lending Works – £53,201,934



Assetz Capital  

Lent to Date: £259,029,279 – fortnightly increase of £4,657,107 – 1.83% growth.

When this blog was compiled, there were 74 upcoming loans with 1 imminently due to be drawndown.

Highlighted Loan: Property developers were looking to borrow £1.17 million over 2 years to enable them to renew a bridging loan while they complete the refurbishment of 34 flats. Some of the properties are already rented out and the income from these will service the interest only monthly payments with the capital repaid at the end of the term via a conventional mortgage when all the work has been completed. The borrowers have other income streams and are able to offer many levels of security including First Charges over the apartment blocks, a Company Debenture and Personal Guarantees. But with a return offered of 7% pa, investors may as well place funds in Assetz Capital's Great British Business Account which offers the same rate plus the additional security of a Provision Fund.

Managed Accounts: The following accounts automatically distribute funds on behalf of investors across the platform's portfolio and are covered by a Provision Fund:

Quick Access Account (3.75% pa return); 30 Day Access Account (4.75% pa return until 6th June when it will revert to the standard 4.25 pa); Great British Business and Green Energy Income Accounts (both of these offer a return of 7% pa).

Platform News: What a difference half a percent makes! Since this was temporarily added to the rate of return on the 30 Day Access Account some 7 weeks ago, £23 million of funds have been attracted.

Funding Circle

Lent to Date: £2,342,529,869 – fortnightly increase of £46,713,175 – 2.03% growth.

There were 5 auctions ongoing when this blog was compiled although as loan requests tend to fill in a matter of hours on this site, that is not a fair reflection of throughput.

Secret Investor's Activity: This is one of the sites which I have the most exposure to -because they have the largest number of manually selectable loans.

Below are highlights from my activity over the past fortnight:

Highlighted Loan Invested in:

Expansion Loan of >£53k to bed manufacturers (E risk rating 21.5% pa return). Funds were being used to purchase a CNC machine which will reduce manufacturing time and hence increase the efficiency of the business. Although the Net Assets figure was very low, the annual profits covered the loan – also an asset was being purchased. I believe I have invested in riskier businesses for returns much less than 21.5% pa.

Highlighted Rejected Loan:

Expansion Loan of £26.5k to cashmere retailers (C risk rating 13.5% pa return). All looked good – a rational proposal and healthy balance sheet but then I noticed they already had a Funding Circle loan. When checking that out, it was for over £50k and had only been taken out at the start of this year. There was no indication that the loan was going to be repaid by the new one so the firm's borrowing was ramping up quite rapidly. It may have been the case that they originally wanted to borrow circa £80k but didn't meet FC's criteria for being lent such a high amount but are now in an improved financial situation. As there was no such explanation I decided to play it safe and not bid.

Defaulted Loans Update: Loan to an art dealer was defaulted last week. The borrower has developed a life changing health problem and had to stop trading for a while but has been making partial payments for a number of months. Although I have £64 of capital outstanding, it looks like I will get some of that recovered at least.

Today another loan defaulted. This was to a letting agency. They had missed a number of payments but had always brought their affairs up to date however they have another Funding Circle loan which is 4 months in arrears therefore this one has also been defaulted. Just over half on my original £20 investment is outstanding.

Platform News: Funding Circle have received full authorisation from the FCA. They now plan to offer an IFISA although, reading between the lines of their press release, they have some concerns about how they are going to manage supply and demand.


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.


Lent to Date: £119,466,284 at the end of April – total updated monthly.

There were 4 auctions ongoing when this blog was compiled.

Highlighted Loans: Borrower in Liverpool requested £450k to buy a property. They offered a plot of development land as security. This is a former bowling green that has planning permission for the construction of a four storey nursing home. The loan will be repaid using development finance. I find the most important statistic on this site is the LTV as it indicates the likely chances of recovery should the loan not be repaid. For this plot of land it was 60% - 10% below the maximum this platform permits – which was a good sign. The return offered was 13% pa with bonuses up to 4% for large injections of capital.

Defaults: In my last blog I wrote, "The assets held against 2 or 3 of my defaulted loans seem to be getting closer to being sold" but frustratingly little progress appears to have been made since then.

Money & Co

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

When this blog was compiled there were 2 auctions taking place both of which were raising additional funds for the guaranteed to buy a home business and marquee company covered in previous blogs. Strangely, even though they have been active for a month, both are only just over 20% funded. It appears as though Money & Co's existing investors feel they have enough exposure to these two businesses.


Lent to Date: £11,500,000 – no change in the past fortnight.

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

Highlighted Loan: A sports commentator was looking to raise >£52k to pay off the overdue tax bill of a former director who is also his soon-to-be ex-wife. The charge from the HMRC arose after their accountant failed to provide notification of dividends. Security is provided via a Personal Guarantee – the borrower is expected to be worth £90k following the divorce settlement. He also receives £200k per annum from a broadcast company. This all seems abit messy and, given the high interest rates of ReBS, is an expensive way to pay off the bill given the borrower's levels of annual income. Is there more to this than has been disclosed? I wasn't tempted to invest.


Lent to Date: £237,671,000 – fortnightly increase of £180,000 – 0.08% growth.

A surprisingly small increase, the fortnightly growth for ThinCats is usually in the millions.

There were 5 active auctions taking place when this blog was compiled.

Highlighted Loan: A bridging loan of £450k was requested by a property developer in the North East to purchase a mill and convert it into 4 terraced houses. The facility will be drawndown in tranches as required by each phase of the renovation. The initial capital injection of £105k will facilitate the purchase of the site and offers an LTV of 61%. By the end of the project, the £450k total will have a GDV of 58%. This seemed quite a straight forward bridging loan on which investors could earn 11.5% pa over the 15 month term.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: The tranches for existing loans keep coming on this platform although it seems a long time since a new borrower has been introduced to I&F lenders. Shortly after the last blog went to press, a property developer from the South East returned for his sixth injection of capital – just under £84k out of a total facility of £2.1 million – to continue the construction of 8 x 2 bedroom flats. The latest report by the monitoring surveyors did not highlight any major concerns and investors were offered a return of 9.5% pa.


Lent to Date: £11,928,041 – fortnightly increase of £812,760 – 7.31% growth.

There were 0 active auctions taking place when this blog was compiled although several have been listed in the past fortnight. To avoid funds being tied up for too long, investors only have 24 hours to decide whether to commit to each loan.

Highlighted Loan: A London based chain of Asian supermarkets was looking to raise £54.5k to fund a marketing campaign on local radio. The balance sheet indicated that the loan could comfortably be repaid over the 5 year term. With the auction imminently due to end, I was able to put in a bid of 11.3% pa when the average was 8.4%.

Platform News: LendingCrowd have introduced their self-selected ISA which will sit alongside their managed fund. This good news for those investors who have time to analyse individual loans as my self-select activity is returning 9% pa (albeit not in an ISA wrapper as my allowance has been allocated to another platform) versus 6% pa for the managed account.


Lent to Date: £36,023,000 – fortnightly increase of £1,500,000 – 4.34% growth.

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

Highlighted Loan: One of the riskiest loans I had seen listed on ArchOver appeared last week which was a surprise as I regard the platform as sitting low down on the risk/reward curve. It concerned a facilities management company that had branched out into the installation of solar panels only for the government to withdraw the subsidies. This resulted in the business making a loss that was almost two-thirds of the £150k working capital facility they are refinancing. They also have another £500k loan.

To redress the situation with the loss incurred by the failure of the solar panel side of the business, they had diversified into battery storage and assurances were provided that this field would be just as lucrative. It did seem to require an act of faith to believe this would be the case. There were charges over All Assets and the Accounts Receivable plus the loan was insured by Coface which made it a technically safe investment despite my concerns about the future of the business therefore the return on offer was only 7% pa.

Platform News: ArchOver have introduced a "Refer a Friend" scheme. This seems more generous than most with both the new and referring investors receiving £75 however £5k has to be distributed to borrowers within 90 days by the newcomer. On many sites, the offer is a £25 bonus when an initial £1k is invested.


This platform, which lists loans from multiple sites, had 8 auctions taking place today and all were from P2P Lenders covered elsewhere in this blog (5 were from ThinCats).




Lent to Date:  £2.32 billion – fortnightly increase of £30 million – 1.31% growth.

Returns: Zopa's 3 accounts offer returns of 2.9%, 3.7% and 6.1% 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.

Platform News: Having recently been granted full authorisation by the FCA, Zopa have announced plans for the introduction of their IFISA. As part of the process, they are also undertaking a major restructuring of their account offerings with the removal of both the Free Access product and their "Safeguard" Provision Fund.

This means Zopa's customers will always have to pay a 1% charge when selling loans and not have the protection of a Provision Fund but they will earn a return of 3.9% pa instead of 3.7% pa (or 2.9% pa with Free Access)

Zopa advise that the Provision Fund was only introduced to prevent customers from paying tax on bad debt but since then the HMRC have changed the rules so that this is no longer the case.

The third existing "Plus" account, which invests in riskier loans and offers a return of 6.1% pa is continuing unchanged and will be available as an IFISA.

To avoid demand from investors exceeding the number of loans available, Zopa are taking a phased approach to the introduction of the IFISA. Although the scheme is being introduced on 15th June, it will only be available to existing Zopa customers who wish to invest new capital. From the start of July, it will be possible for them to transfer funds from existing Zopa accounts. A month later, existing customers can make transfers from other ISAs that they may have opened with other providers and then, finally, the IFISA will be made available to new customers.

These are indeed busy times at Zopa as they have also announced a £32m cash injection from an Indian venture company which will help with their transformation into a bank.


Lent to Date: £1,909,543,266 – fortnightly increase of £27,771,980 – 1.48% growth.

Having dipped 2 weeks ago, growth has returned to its usual level.

Returns: Interest rates are set according to supply and demand. They currently range from 2.8% pa to 4.5% pa depending on the length of the investment. Compared to a fortnight ago, the former figure is unchanged while the latter has recovered from its all-time low of 3.2% recorded in the last blog.

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: £53,201,934 – fortnightly increase of £1,370,709 – 2.64% growth.

Lending Works has now provided borrowers with more than £50 million of capital.

Returns: 3.3% pa and 4.4% pa via an IFISA or standard account for 3 and 5 year investments respectively. The lower rate has reduced by 0.1% over the past fortnight while the latter is unchanged.

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.