Secret Investor: Invest & Fund to offer higher risk loans at greater returns and a new investment strategy for Funding Secure

Totals lent to date (7th February 2018)

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

LOANS TO BUSINESSES

Assetz Capital - £425,900,000

Crowd2Fund - £4,000,000
Funding Circle - £3,200,000,000
FundingKnight - £31,485,000
FundingSecure - £220,364,659
Money & Co - £6 million approx
Rebuildingsociety - £12,200,000
ThinCats - £274,579,000
Invest and Fund - £3 million plus
LendingCrowd - £25,663,576
ArchOver - £60,229,000

PERSONAL P2P LENDING

Zopa - £3,010,000,000
RateSetter - £2,326,398,780

Lending Works – £89,805,222

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £425,900,000 - >£11 million growth in the past fortnight

When this blog was compiled there were 68 loans in the pipeline and 2 were imminently due to be drawndown.

Highlighted Loan: Restauranteurs from the North West were looking raise £225k to consolidate existing commercial debt and clear their own private debt. They have a profitable, award-winning business and the current valuation of the premises, for which a first charge was offered, provided an LTV of 64%. The only concern was that the borrowers are a married couple who have recently separated however, because Sicilian chefs were employed to prepare the Italian cuisine, the business could easily be sold as a going concern if they decided they are not able to work together as well as live together. I therefore invested for a return of 7.5% pa.

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 version 2 (6.25% pa)

Green Energy Income Account (7% pa) – New capital coming into this account have been paused due to the lack of available loans meeting the investment criteria.

Crowd2Fund

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

Over the past 2 weeks, 4 auctions have appeared.

Highlighted Loan: Providers of Business Intelligence software were looking to raise £60k of working capital to fund their expanding operations. They made over £90k of profit last year but suggested via the Q&A that they only have one key client which is a concern. Apparently underlining the risks, investors were offered a return of 12.5% pa instead of the usual 10.5% on this site.

Funding Circle

Lent to Date: £3,200,000,000

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 options are offered which distribute funds across differing risk profiles of loans within their portfolio. These are options are projected to return 4.8% pa and 7.2% pa.

Defaulted Loans Update: Despite significantly reducing my holdings, the defaults keep on coming – I am astounded and also relieved to have done so much selling since AutoBid became compulsory in September.

Two more loans went bad last week due to chilled food suppliers and corporate consultants both finding themselves in arrears.

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 at some point in 2018.

FundingSecure

Lent to Date: £220,364,659 at the end of January – monthly growth of £7,268,850 (3.41%).

Today 0 auctions were launched on the site. This is quite unusual as there are normally at least 3 or 4 loans appearing each day although often they are renewals.

Highlighted Loan: Property Developer renewed and slightly increased the loan they required to finish a house in Somerset. Contracts have already been exchanged subject to the completion of the works which encouraged me to invest for a return of 13% pa.

Defaults: Good news. One of several loans that I have which are defaulted was recovered last week (both capital and interest) when Farmland in Cornwall was sold.

Wheeling & Dealing: Recently, I have changed my strategy on this site. Because there is not enough throughput to spread my capital around as thinly as I would wish, I have invested larger sums in new loans with the intention of selling them half way through the 6 month term reducing my exposure to defaults. A couple of these investments reached my 90 day cut-off this week and sold, with a 0.5% discount, in a matter of hours. So long as I am able to quickly re-invest, this should still provide a double digit annual return.

Money & Co

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

When this blog was compiled there were 2 auctions taking place.

Highlighted Loan: The £50k 9th tranche of funding requested by purchasers of a financial services company mentioned in the previous blog has only been 7% filled over the past fortnight despite investors being offered an 8% pa return. Clearly many feel perplexed by the need for these capital injections which have been raised at regular intervals over the past year despite the financial information not being updated during that time. It still represents percentages rather than absolute numbers.

rebuildingsociety

Lent to Date: £12,200,000 – fortnightly increase of £100,000 (0.83%).

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

Highlighted Loan: Bar wishing to consolidate debt after refurbishments overran was looking to raise >£90k. Working capital was also required to enable larger deposits to be paid to agents to bring more popular bands to the now enlarged venue. Security was provided by a Personal Guarantee, All Assets Debenture and a Property Charge. In conjunction with the balance sheet of the business, this brought the maximum bid rate down from 20% pa to 16% pa. I contributed a couple of tenners that had recently been repaid from other loans.

ThinCats

Lent to Date: £274,579,000 –  – fortnightly increase of £2,797,000 (1.03%).

There were 2 auctions taking place when this blog was compiled but both were related to the same borrower.

Highlighted Loan: A borrower in Northern Ireland who is constructing a race circuit on the site of a former quarry requested £1.525 million to refinance the bridging loan used to purchase the site. In the past, many plans to build tracks have failed however the repayments are not dependent on income from motorsport activities instead they will be funded by the land-fill and mineral extraction enterprises which are already ongoing. All seemed good, except the loan was split with £1.125 million being borrowed from investors at a rate of 10% pa with the remaining £400k offering a return of 13% pa. The latter ranks behind the first suggesting there is a doubt that the full amount will be repaid.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: Property Developer in the Midlands who is constructing 7 houses, returned to the site for their fourth tranche of funding. This was for just under £100k out of a total facility of more than £3.1 million. The construction process had been progressing well and there is some talk of the project finishing ahead of schedule. A return of 9% pa was offered.

Platform News: Invest & Fund plan to offer riskier Property Development loans to investors. These will be second charges or mezzanine finance with LTVs above the site's usual 75% LTV limit. A return of 15% to 20% pa will be offered which doesn't seem all that generous considering the > 75% LTV when my experience on other sites suggests many valuations are optimistic.

LendingCrowd

Lent to Date: £25,663,576 – fortnightly increase of £775,360 – 3.12% growth.

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

Highlighted Loan: Builders' Merchants from Scotland were looking to raise £52k of working capital to purchase stock after a 60% increase in business resulted in them hitting their credit limits with suppliers. This was a very popular loan which was fully funded within hours of it being listed. I got a share of the action for a return of 9% pa.

ArchOver

Lent to Date: £60,229,000 – no change.

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

Highlighted Loan: Financial Advisors returned to ArchOver to refinance the £200k loan which was enabling their business to grow. In the past year, more staff have been taken on and the company is now operating from larger premises. Security will be provided by ArchOver having control over the bank account into which revenues are paid however, unlike many loans on this site, there was no insurance but investors were offered the higher rate of return of 8% pa.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £3.01 billion – an increase of £30 million over the past 2 weeks – 1.01% 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.

Platform News: Zopa passed the £3 billion lent mark with a third of that figure provided to borrowers in 2017 alone.

Ratesetter

Lent to Date: £2,326,398,780 – an increase of £31,428,714 over the past 2 weeks – 1.37% growth.

Ratesetter seem to have recovered from the improprieties of 2017 with over £30 million distributed to borrowers in the past fortnight. Back in August/September it was half that level.

Returns: Interest rates are set according to supply and demand. They currently range from 3.5% pa to 5.1% pa depending on the length of the investment. Over the past 2 weeks these figures have increased by 0.1% and decreased by 0.5% respectively.

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 will be one of the last major P2P platforms to launch their IFISA when they make the tax-free wrapper available to their existing investors tomorrow (8th February). To manage demand, the plan is not to invite new customers to open an IFISA until 1st March.

Lending Works

Lent to Date: £89,805,222.

Lending Works are another platform who have decided to only quote an approximate value for their totals lent.

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 couple of 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.