Secret Investor: ReBuildingSociety receive full approval from the FCA
Totals lent to date (9th March 2017)
*All data correct at the time this blog was compiled.
LOANS TO BUSINESSES
Assetz Capital - £216,812,349
Funding Circle - £2,068,250,751
FundingKnight - £31,485,000
FundingSecure - £102,892,389
Money & Co - £6 million approx
Rebuildingsociety - £11,200,000
ThinCats - £223,757,000
Invest and Fund - £3 million plus
LendingCrowd - £9,996,121
ArchOver - £29,473,000
PERSONAL P2P LENDING
Zopa - £2,100,000,000
RateSetter – £1,771,063,948
Lending Works – £45,727,824
LOANS TO BUSINESS
Lent to Date: £216,812,349 – fortnightly increase of £2,022,191 – 0.94% growth.
When this blog was compiled, there were 52 upcoming loans with 2 imminently due to be drawndown.
Highlighted Loan: A borrower in the South West was looking to raise >£465k (including interest repayments) to refinance the purchase of a plot of land for which they have obtained outline planning permission for quite a large residential development. Once infrastructure such as road access has been put in place, the exit strategy will be the sale of the site to property developers or further refinance. The LTV ratio is currently below 50% and further security is provided through a Personal Guarantee. Investors were offered a return of 8% pa.
Managed Accounts: The following accounts automatically distribute funds on behalf of investors across the platform’s loans and are covered by a Provision Fund:
Quick Access Account (3.75% pa return); 30 Day Access Account (4.25% pa return); Great British Business and Green Energy Income Accounts (both of these offer a return of 7% pa).
Platform News: Following yesterday’s Budget, Assetz Capital’s CEO, Stuart Law, launched a scathing attack on Chancellor Phillip Hammond. He criticised the Government for a lack of direction over their Brexit strategy and the failure to fix a major flaw in the IFISA rules – namely that the public are unable to diversify by spreading their tax free allowance across multiple platforms which is a fundamental way to manage risk when investing in the P2P sphere.
Lent to Date: £2,068,250,751 – fortnightly increase of £55,193,290 – 2.74% growth.
There were 14 auctions ongoing when this blog was compiled.
Secret Investor’s Activity: This remains the site 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 <£32k to a public house (C risk rating, 13.5% pa return). The borrowers intend to use the funds to purchase outdoor structures to maximise the potential of their beer garden and also to obtain portable bar equipment so they can cater for weddings and birthday parties both of which should be good for business.
Highlighted Rejected Loan:
Loan for refurbishment of >£131k to refit convenience stores (C risk rating, 13.5% pa return). The main problem with this was that the net assets on the balance sheet were £75k – not much more than half the amount being borrowed. While I would imagine there is a guarantor covering this shortfall, Funding Circle never disclose such information. With only £75 in my FC account, I decided to wait for something more attractive.
Defaulted Loans Update: A drinks wholesaler who I had lent to was set to default today as they were 4 months in arrears with their payments and, when a Funding Circle agent visited their premises, they appeared to have ceased trading. Meanwhile, another of my defaulters, from way back in October 2015, who had only made 5 repayments now appears to have done a “runner” to Romania!
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: £102,892,389 at the end of February – monthly increase of £6,348,256 (6.58%).
The site has reached the £100 million Total Lent milestone just 7 months after getting to £50 million.
There were 3 auctions ongoing when this blog was compiled.
Highlighted Loans: A borrower raised £160k last week with the funds secured against a brand new high-end car. The vehicle was so new that the main dealer was to deliver it to FundingSecure’s storage facilities rather than to the owner themselves. Investors were offered a return of 12% pa.
Defaults: That sinking feeling…. A loan secured against 6 yachts was set to default just after the last blog went to press. The borrower is working hard to find a buyer for the vessels so hopefully the money will soon be redeemed.
Money & Co
Lent to Date: £6 million approx. (latest available figure)
When this blog was compiled there were 0 auctions taking place.
Lent to Date: £11,200,000 – no change.
There were 2 active auctions taking place when this blog was compiled.
Highlighted Loan: A chain of launderettes requested £106k to fit out their latest outlet, unfortunately they had only raised less than a third of this amount when the auction closed. With a first charge placed over the equipment being purchased plus Personal Guarantees, ReBS lowered the initial rate for this auction but, even so, those who invested would have received an average return over 18% pa. It will be interesting to see whether the borrower will accept the loan given how small a proportion of the requested amount was pledged. The lack of enthusiasm may be related to concerns over the value of the Personal Guarantee as, in the Q&A, the borrower confessed that all his assets are tied up in the business.
Platform News: Gobsmacked! That’s how I felt last week on receiving the news that ReBuildingSociety had received full authorisation from the FCA and will be able to offer an IFISA in the near future. I am amazed because this platform, while offering the highest rates of return, has an equally high default rate – 20% in the case of my holdings. Things have improved in the last 12 months since a person dedicated to chasing defaulters was employed however as the FCA are supposed to be looking after the interests of the ordinary man in the street I am surprised that this, the most high risk of operators, have received authorisation ahead of other platforms. It does appear as though whatever requirements the FCA are looking for in their approval mechanism, they are more easily met by the smaller P2P companies.
Lent to Date: £223,757,000 – fortnightly increase of £2,655,000 – 1.2% growth.
There were 3 active auctions taking place when this blog was compiled.
Highlighted Loan: A borrower was looking to raise £150k to purchase the Motorsport’s Clothing company he works for from his employer who is retiring. The latter has agreed to continue working unpaid for 6 months to smooth the handover. Security was provided via a Company Debenture and Personal Guarantee. The target rate of return was 10.5% pa.
Platform News: Having been unavailable for more than a week, ThinCats investors received notification that the Secondary Market had been restored on Monday, 27th February.
Invest & Fund
Lent to Date: Over £3 million
There were 2 active auctions taking place when this blog was compiled.
Highlighted Loan: A bridging loan in the region of £1.75 million is listed at the moment. This is going to be used to complete the purchase of a large residential property in the Home Counties. Planning permission is in place to allow the existing building to be demolished and replaced by 6 flats. There is a first charge over the development site although the LTV is currently over 70%. Additional security is provided via a debenture over the holding company and Personal Guarantees. The exit strategy is to raise development finance in 6 months. Before then, the borrower will be trying to enhance the planning permission. If this is not granted, then development work is expected to start this Summer. Investors were offered a return of 9.5% pa.
Lent to Date: £9,996,121 – fortnightly increase of £625,760 – 6.68% growth.
There were 0 active auctions taking place when this blog was compiled.
Highlighted Loan: A good news story – movie makers looking to invest in cutting edge technology returned to LendingCrowd for a fresh injection of £250k. Last year their £40k loan took their business to the next level and they now require funding for a virtual reality demo room. Their net assets comfortable cover the latest loan amount and so I was happy to bid at just under 10% pa.
Platform News: Apparently, LendingCrowd have received a number of requests for a “Self Select” IFISA rather than the managed fund with a target return of 6% pa they made available a few weeks ago. They have surveyed their investors to gauge demand. Such an offering would be of interest to me although the site doesn’t quite have enough loans to enable the £15k+ tax free allowance to be diversified as much as I would wish. It is very frustrating that it cannot be split over multiple sites.
Lent to Date: £29,473,000 – no change. As there is a steady trickle of loans going through the site, it may be that the headline figure on the home page has not been updated.
There was 1 auction taking place when this blog was compiled.
Highlighted Loan: Specialist window contractors returned to ArchOver to borrow £350k to enable their expansion plans to continue. This is the first of 3 tranches to refinance a £1 million facility taken out 2 years ago. Investors were offered a return of 7% with security provided by a charge against their Accounts Receivable and the loan is insured by HCC.
This platform, which lists loans from multiple sites, had just 4 auctions taking place today and all were from P2P Lenders covered elsewhere in this blog.
Site was launched in early October.
No new loans have been added to this site in the past fortnight.
PERSONAL P2P LENDING
Lent to Date: £2.1 billion – fortnightly increase of £40 million – 1.94% 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.
Lent to Date: £1,771,063,948 – fortnightly increase of £24,061,471 – 1.38% growth.
Returns: Interest rates are set according to supply and demand. They currently range from 3.2% pa to 5.2% pa depending on the length of the investment. Over the past fortnight, these figures have reduced by 0.4% and 0.3% 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 recently signed an agreement with the TaxAssist chain of accountancy practices to enable them to receive referrals from SMEs who require finance for working capital and/or growth.
Lent to Date: £45,727,824 – fortnightly increase of £2,319,422 – 5.34% growth.
This is the first time Lending Works’ borrowers have raised more the £2 million in a fortnight.
Returns: 3.8% pa and 4.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. The former amount has reduced by 0.2%
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.