Secret Investor: ThinCats to introduce a Lender fee of 1% on interest earned and Funding Circle offer an optimistic outlook on stress tests

Last post: Dec 15, 2017

AssetzCapital launch their IFISA this month while Ratesetter and ThinCats plan to do the same in the New Year… ThinCats will bring in a 1% fee on income for new customers after 1st January… FundingSecure Total Lending exceeds £200 million

Totals lent to date (13th December 2017)

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


Assetz Capital - £388,335,084

Crowd2Fund - £4,000,000
Funding Circle - £3,000,000,000
FundingKnight - £31,485,000
FundingSecure - £188,092,059
Money & Co - £6 million approx
Rebuildingsociety - £12,000,000
ThinCats - £260,890,000
Invest and Fund - £3 million plus
LendingCrowd - £23,464,296
ArchOver - £57,569,000



Zopa - £2,880,000,000
RateSetter - £2,232,344,514

Lending Works - £81,199,607



Assetz Capital

Lent to Date: £388,335,084 – fortnightly increase of £3,952,288 – 1.03% growth.

When this blog was compiled there were 64 loans in the pipeline with none imminently due to be drawndown.

Highlighted Loan: A borrower who is new to Property Development required £90k which was to be raised via an interest only loan. The capital will buy the second property in their portfolio with the first, which they have already refurbished and is about to be put on the letting market, offered as security along with a Personal Guarantee. The loan is to be serviced from the first property's returns but the monthly payments to Assetz Capital will be less than £150 below the expected income from the tenants which doesn't leave much remove for manoeuvre if unexpected maintenance costs arise although the borrow does also have a salaried income. Given the lack of experience and little in the way of contingency to service the loan, I felt the return of 6% pa offered to investors was way too low.

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)

Note: It can take a long time for funds to be allocated by the higher yielding accounts as they cover areas where there is a low throughput of loans.

Platform News: AssetzCapital plan to launch their IFISA before the end of 2017. Initially it will only be available on their managed accounts but in the New Year it will also be offered to those who manually choose the loans they invest in. AC claim they are the only one of the large P2P platforms to offer an IFISA to active investors. I suppose this is a reference to the big 3 of Funding Circle, Zopa and Ratesetter however AC rank someway behind these grandees in terms of throughput. They sit closer to the medium sized concerns of FundingSecure and ThinCats. The former already offers a "choose your own investment strategy" IFISA.


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

There were 6 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: Manufacturers of battery powered bicycles were looking to raise £50k to increase their stock levels. The financials for 2016 were reasonable but there was no data available for this year therefore I felt a return of 10% pa was a little on the low side.

Funding Circle

Lent to Date: £3,000,000,000

Funding Circle past the £3 billion lent mark last week. Thanks to the rapid approval process for borrowers, it has accumulated the most recent £1 billion in only 10 months.

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 7.5% pa although, as there appears to have been an increase in defaults over recent months, it wouldn't be a surprise if a significant number of investors failed to receive the expected amount of income.

Defaulted Loans Update: None of my remaining loans on this platform defaulted over the past fortnight.

The things you discover in a Stress Test: Funding Circle have published their 2017 Stress Test… and it makes for some very interesting reading. Throughout 2017 a typical return of 7.5% has been prominently displayed on the Funding Circle Home Page but, in the Stress Test, the typical return when there is no recession (as in the current situation) is 6.7% - much lower than the figure that has been advertised all year but possibly this assumes that some people will opt for the lower risk option that returns 4.8% pa. Nonetheless from my own and others' experiences of an increasing number of loans defaulting after a couple of months I suspect some bad news is being buried.

Funding Circle expect existing investors to earn a return of 5% pa in the event of a recession however I would expect a deviation far more than 1.7% for unsecured loans to SMEs if the economy got into difficulties.


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.


Lent to Date: £200,190,259 – Monthly growth of £12,098,200 (6.43%).

In November FundingSecure reached the milestone of providing more than £200 million to borrowers.

Today 4 auctions were launched on the site although most were existing borrowers who requested more finance.

Highlighted Loan: A borrower came to the platform last week requesting funding for not one but two development projects both of which were in London. The total amount being raised was just under £2.3 million which is a sizeable amount for this site. The LTV for each loan is towards the top end of FundingSecure's range at just under 70%. As, in reality, this is just one borrower and because recently non-standard loans have gone bad on this platform, I tentatively invested £75 into one of the developments.

Defaults: No new defaults in the past fortnight and, for my existing bad loans, a couple of properties and 6 yachts seem to be getting closer to finding buyers.

Selling on the Secondary Market: Earlier in the year I transferred a Cash ISA into the FundingSecure IFISA but it has been a struggle find enough loans invest in as my strategy was to invest no more than £75 per borrower. I upped my limit to £250 for loans that I felt particularly good about but have decided to sell the ones where I have this amount of exposure after 4 months. As loans are not repaid until after 6 months, this guarantees I will avoid defaults assuming I always find buyers. I usually try and sell with a discount of 0.2% but if that is unsuccessful then I am prepared to increase the discount to 0.5%. This strategy is still a work in progress but so far I have always found a buyer at 0.5%. With typical returns on this site of 13% pa which I can then compound by re-investing in other loans when sales complete, offering a 0.5% discount still leaves a healthy return.

Money & Co

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

When this blog was compiled there was 1 auction taking place.

Highlighted Loan: The purchasers of a financial services company returned to the site for their 8th tranche of funding - £50k was required. Investors were offered an 8% pa return. This is a curious one. Only percentages are provided in the financial summary rather than absolute figures but the blurb states the company is very profitable as their customers are all high net worth individuals so why does the purchaser of the business keep returning to Money & Co for relatively small sums?


Lent to Date: £12,000,000 – no change.

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

Highlighted Loan: Borrower was looking to raise £108.5k for the purchase of a beauty salon from the current owner who is retiring. Although turn-over is reducing, the buyer has plans to rejuvenate the business. Returns, and risks, are high on this site but for this loan these were reduced due to the borrower's home being offered as security therefore ReBS brought down the maximum rate of return by 3% to 17% pa. The property provided an LTV of 63% - better than many other platforms offering lower rates of return therefore I invested my usual small sum.


Lent to Date: £260,890,000 – fortnightly increase of £1,840,000 – 0.71% growth.

There were 4 auctions taking place when this blog was compiled however they only involved 2 borrowers each of whom were raising capital across a couple loans.

Highlighted Loan: A loan of £3.5 million appeared on the site towards the end of last week. The capital was required to partially fund the acquisition of financial advisors (30% of the total) with the remainder being deferred to be paid from profits. The concern about this loan was no security was offered beyond the value of the business. Should a mutiny take place and all the advisors leave, what would be left of the company? I am not sure I would invest in this at any price let alone for a quite lowly return of 9% pa.

(Lots of) Platform News: ThinCats have hired 5 "originators" who are located across the country. Their role is to bring more borrowers to the platform thereby increasing the number of lending opportunities.

The ThinCats IFISA is expected to be available early in the New Year. As with other platforms, to manage demand, at the outset the tax-free wrapper will only be available to existing customers. They do not expect to offer the IFISA to new investors until after the next tax year has begun in April.

To support their ongoing investment in the infrastructure of their systems, ThinCats are going to introduce a 1% charge on interest earned from 1st January 2018 however this will only apply to those who open accounts after that date. Therefore, for anyone who is considering signing up with ThinCats, now is the time to do so.

Invest & Fund

Lent to Date: Over £3 million

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

Highlighted Loan: After a hiatus, a property developer in Cheshire returned to the site to drawdown the fourth, fifth and sixth tranches of their £1.1 million facility. The three tranches totalled more than £180k. It has certainly been a bumpy ride with the Project Manager having been sacked, the police called in to investigate a possible fraud and a circa £245k cost overrun due to a number of items having been omitted from the original plans. As the overrun has been funded from the borrower's own funds and new contractors put in place, Invest & Fund were happy to restart the funding of the project. With a return of 9% pa, the 3 tranches were fully funded within hours of the email notification.


Lent to Date: £23,464,296 – fortnightly increase of £648,120 – 2.84% growth.

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

Highlighted Loan: One category of borrower I avoid lending to is solicitors. They have a reputation for taking out loans on P2P platforms, defaulting them and then using their legal know-how to avoid paying their debt. LendingCrowd listed one such proposition to investors last week when a firm of solicitors requested >£53k to fund the costs of taking cases to court as they are not paid until they conclude. As of October 2017 their profits before tax were 4x the amount being borrowed, so why weren't these costs covered from those? I passed when others were hoping for a return of well over 12% pa.,


Lent to Date: £57,569,000 – fortnightly increase of £4,200,000 – 7.87% growth.

There were 3 auctions taking place when this blog was compiled.

Highlighted Loan: Providers of loans to SMEs returned to ArchOver to refinance a £100k loan that was previously funded by the site's investors. The business has already raised £12 million via the platform and repaid £8 million of capital. The latest financing will be used to support an environmental water cleansing company. Security was provided by an all assets charge and insurance therefore investors were offered a return of 6.75% pa.



Lent to Date:  £2.88 billion – fortnightly increase of £40 million – 1.41% 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.


Lent to Date: £2,232,344,514 – fortnightly increase of £30,931,219 – 1.41% growth.

Returns: Interest rates are set according to supply and demand. They currently range from 3.9% pa to 5.1% pa depending on the length of the investment. Both figures are lower than a fortnight ago – by 0.2% and 0.8% 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 plan to launch their IFISA in February. Initially, the tax-free wrapper will only be available to existing investors but they hope to make it available to new customers shortly afterwards.

Lending Works

Lent to Date: £81,199,607 – fortnightly increase of £1,720,459 – 2.16% growth.

Returns: 4.0% pa and 5.5% pa via an IFISA or standard account for 3 and 5 year investments respectively. Compared to 2 weeks ago, the latter figure is 0.2% higher – back to where it was a month aga.

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.