Secret Investor: Zopa submit an application to become a bank

Last post: Nov 17, 2016

Interest rates on Personal P2P Loans continue to plummet… Zopa submit an application to become a bank… Assetz Capital list 9 loans to fund Wind Turbine Projects ahead of the withdrawal of Government subsidies

Totals lent to date (17th November 2016)
*All data correct at the time this blog was compiled.

Assetz Capital – £179,607,409
Funding Circle - £1,675,395,960
FundingKnight - £31,220,000
FundingSecure - £70,982,338
Money & Co –  £6 million approx
Rebuildingsociety – £10,400,000
ThinCats - £203,353,000
Invest and Fund - £1 million plus
LendingCrowd - £7,623,881
ArchOver - £24,630,000

Zopa - £1,800,000,000
RateSetter – £1,543,845,098
Lending Works – £37,176,812

Assetz Capital  
Lent to Date: £179,607,409 – fortnightly increase of £3,597,385 – 2.04% growth.
When this blog was compiled, there were 62 upcoming loans with 7 imminently due to be drawndown.
Highlighted Loans: Assetz Capital had no less than 9 loans to fund Wind Turbine projects imminently due to be drawndown last week as borrowers looked to set things up before the Government withdraw their subsidies for such initiatives. The amounts being raised ranged from £111k to £363k. All these deals offered returns of 8% pa which led me to believe it was safer to invest in the Green Energy Income Account to earn 7% pa from the same and similar loans while receiving the protection of a Provision Fund.
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).
Troubled Loan Update: In my 22nd September blog, I mentioned a borrower who had got into financial difficulties due to the weak pound following Brexit increasing the cost of imports. This week investors were invited to vote on a proposal to give a 1 year capital repayment holiday to enable the borrower to bring his finances back in order. This seems very reasonable and hopefully, in the interim, the Government will have announced some sort of Brexit strategy that will have given currency markets confidence to invest in the pound.

Funding Circle
Lent to Date: £1,675,395,960 – fortnightly increase of £47,588,440 – 2.92% growth.
This fortnight's total is down slightly on the previous period's record breaking level but is still the second highest for this platform.
There were 37 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 in the past fortnight:
Highlighted Loan Invested in:
Expansion Loan of >£78k to craft brewers (C risk rating, 11.9% pa return). Loan is required to purchase a canning machine. Their latest profit/loss account had a tiny 3 figure balance and I very nearly rejected this one but I was swayed because the money is being used to buy an asset while the company has a strong export record which should be helped by the weak pound.
Highlighted Rejected Loan:
Expansion & Growth Loan of >£208k requested by IT Security business (C risk rating, 12.5% return): Another woeful proposition consisting of 11 words. I had to use Google to get an idea of what the company did…
Defaulted Loans Update: Last Thursday was something of a nightmare with £130 worth of my investments across 3 loans defaulting. A fourth loan was defaulted this week but, with only 2 repayments remaining, I only had £1.31 of capital outstanding in that one.
Platform News: At a recent Investor's Evening, FundingCircle revealed that in anticipation of a post-Brexit recession, they altered the criteria used for accepting property development loans. They now require an LTV of 60-65% when previously they accepted a ratio of 70%. This is the only change they have made to their risk assessment criteria following the referendum.

Lent to Date: £31,220,000 – no change.
There were 0 auctions ongoing when this blog was compiled and there haven't been since September.
Platform News: FundingKnight have relocated to the same Basingstoke offices as their sister company, Platform Black, who offer invoice and supply chain financing for SMEs. They hope this will enable a more complete service to be offered to borrowers.

Lent to Date: £70,982,338 at the end of October. Monthly growth of £5,801,370 (8.9%).
Total updated monthly.
There were 13 auctions ongoing when this blog was compiled.
Highlighted Loan: Nice to see a good old fashioned asset backed loan last week in amongst all the property developers raising funds. This came from a borrower who was raising £3k with a pair of gold earrings valued at £5k offered as security.
Defaults: I am still waiting for the domain names and high-end car to be sold plus the loan to the Scottish Boatyard to be refinanced. Meanwhile a fourth loan, secured against a watch has defaulted.
Platform News: In a bid to boost their asset-backed portfolio, FundingSecure recently exhibited at Alexandra Palace's Classic & Sports Car Show. Useful contacts are reported to have been made.

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: £10,400,000 – the site now only reports this figure to the nearest £0.1 million.
There were 3 active auctions when this blog was compiled although 2 of these had been on the site for some time without reaching 50% funding.
Highlighted Loan: A firm of electricians required £30k to service a couple of recently won contracts. They seem to be in quite a cut throat business with one customer renegading on payments and forcing bankruptcy a few years ago. With their finances back in order I decided to invest a small amount at a return of 15% pa. With a target 10x smaller than the other loans looking for funding on this platform, this borrower has raised the full amount they requested.

Lent to Date: £203,353,000 – fortnightly increase of £1,250,000 – 0.62% growth.
There were 10 active auctions when this blog was compiled.
Highlighted Loan: Due to a contract to convert vehicles into taxis, an automotive component manufacturer requires a total of £500k for cashflow ahead of receiving payment from another piece of work in the middle of next year. Originally, they were wary about being able to raise the full amount but when the initial £250k was raised in just over 24 hours the decision was taken to return to raise the remaining amount. A return of 12% pa is offered although security is only available via a second charge over the company's accounts.

Invest & Fund
Lent to Date: Over £1 million
There were 0 active auctions when this blog was compiled.

Lent to Date: £7,623,881 – fortnightly increase of £214,100 – 1.45% growth.
There was 1 auction taking place when this blog was compiled.
Highlighted Loan: Scaffolding business which also has an in-house design team was looking for £157.5k to support the ongoing growth of the enterprise. This is an asset rich organisation which Lending Crowd rated at A+ therefore a return of just under 10% pa was the highest investors could achieve.

Lent to Date: £24,630,000 – no change.
There was 1 auction taking place when this blog was compiled.
Highlighted Loan: A regular customer of ArchOver who helps finance SMEs returned to the site for a further injection of £400k. These funds are going to be used specifically to assist one of the country's major motoring breakdown operations and a supplier of healthy drinks. Investors are offered a return of 6% pa which is lower than that offered by many platforms in this section of the blog but, as is usually the case for this site, a higher level of security is provided via a first, floating charge on the borrower's Accounts Receivable and the loan is also insured.

This platform, which lists loans from multiple sites, had 13 auctions taking place today although many were from P2P lenders covered elsewhere in this blog.

Site was launched in early October and has listed 2 loans so far.
There were 0 auctions taking place when this blog was compiled.

Lent to Date:  £1.8 Billion – latest figure available.
Returns: Zopa's 3 accounts offer returns of 3.3%, 3.9% and 6.3% pa depending on the levels of access and whether or not they are covered by the Provision Fund. A further 0.2% has been shaved off the returns of the latter two accounts.
Zopa distribute investor's money mostly to unsecured consumer loans.
Platform News: Zopa have submitted an application to become a bank to enable them to expand on the number of products they can offer. The process could take up to 2 years.

Lent to Date: £1,543,845,098 – fortnightly increase of £25,548,046 – 1.68% growth.
Returns: Interest rates are set according to supply and demand. They currently range from 2.6% to 4.1% depending on the length of the investment. The latter has reduced by a whole 0.9% over the past fortnight.
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: £37,176,812 – fortnightly increase of £701,310 – 1.92% growth.
Returns: 3.6% and 4.8% for 3 and 5 year investments respectively. Both figures have reduced by 0.4% over the past fortnight.
As well as a Provision Fund to cover investor's finances, 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.