September P2P Lending Platform News Round-up

Totals lent to date (11th September 2019)

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

LOANS TO BUSINESSES

Assetz Capital - £879,200,000

Crowd2Fund - £31,480,000
Funding Circle - £5.4 billion
FundingSecure - £315,581,236
Money & Co - £6 million approx
Rebuildingsociety - £15,800,000
ThinCats - £511,073,000
Invest and Fund - £60 million
LendingCrowd - £64,933,896
ArchOver - £107,736,000

CapitalRise - £25 million

PERSONAL P2P LENDING

RateSetter - £3.4 billion

Lending Works - £192,277,066

…………..

LOANS TO BUSINESS

Assetz Capital

Lent to Date: £879,200,000 - £19.5 million (2.27%) since the last blog.

When this blog was compiled, there were 103 loans in the pipeline with 2 imminently due to be drawndown as Assetz Capital's pipeline continues to expand.

Highlighted Loan: Borrower from the North West requested the first >£125k tranche of a >£500k facility to construct a new 5 bedroom house. The initial funding will be used to refinance the development plot with the remainder covering the build process. The plan was to repay the loan once the property has been sold – the GDV was 64% and investors were offered a return of 6.5% 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 (4.1% pa)

30 Day Access Account (5.1% pa)

90 Day Access Account (5.75% pa)

Property Secured Investment Account (5.5% pa)

Great British Business Account version 2 (6.25% pa)

Platform News: Assetz Capital offer £150 of Cashback to new investors. To access the offer — which is available on any of Assetz Capital's accounts — they need to invest a minimum of £5,000 for at least 12 months.

Crowd2Fund

Lent to Date: £31.48 million.

Since the last blog, I have received 1 email notifications about new auctions launching on the site.

Highlighted Loan: Financial Advisors and Wealth Managers requested £120k to enable the younger members of the management team to buy shares from the current sole owner who is planning to gradually reduce his role in the company. This is the first phase of a process that will eventually see them relinquish their majority shareholding. I am no fan of this sort of loan as there is no benefit to the operation of the business, only personal gain to one individual. Investors were offered a return of 12% pa.

Funding Circle

Lent to Date: £5.4 billion

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 managed accounts are offered which distribute funds across differing risk profiles of loans within their portfolio. At the moment, these options are projected to offer returns in the ranges of 4.3% - 4.7% pa and 4.5% - 6.5% pa.

As an active rather than passive investor, I am no longer involved with Funding Circle however posters on forums who remain with this site have expressed concerns over the apparent lack of due diligence that is undertaken. Matters may improve as in its latest update to shareholders, Funding Circle advise that they are lowering their growth forecast due to them tightening their criteria for accepting higher risk loans.

Further concerns are being expressed about the liquidity of the site as the amount of time required to sell loans has been increasing according to those posting on forums – over 100 days seems to be the norm.

FundingSecure

Lent to Date: £315,581,236 at end of August – monthly growth of £3,184,101 (1.02%).

When this blog was compiled there were 4 auctions taking place.

Highlighted Loan: The seventh £60k tranche of a £2.75 million facility to construct 20 dwellings on the site of a former public house was listed when this blog was compiled. The development was to be phased so that some of the properties would be sold before further drawdowns were undertaken to finish the other plots. This will ensure that the LTV will remain below 65%. Updates from the Quantity Surveyors are provided on this loan – that never happened under the old FundingSecure management. Investors were offered a return of 12% pa.  

Defaults: Thanks to the new management structure (see below) I have had lots of updates on my many outstanding loans but little in the way of repayments.

Platform News: Funding Secure have written to all their investors emphasising their commitment to reduce the backlog of overdue loans. To that effect, they have recruited a team of specialists covering the following areas: An in-house lawyer with recovery expertise to oversee every case… An expert in loan book servicing and monitoring to ensure current performing loans do not become non-performing… A well-respected national property recovery provider who will assist with some of the more problematic parts of the loan book… A specialist national insolvency practitioner to deal with individuals, companies and non-property loans.

As a thank you for the patience shown by their investors, FundingSecure are offering bonus interest rates when loans are funded between now and the end of September. The bonuses vary according to the amount contributed and range from 0.25% pa for anything less than £500 to 1.25% pa when £10,000 and over is invested.

Money & Co

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

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

Highlighted Loan: A company which tunes car engines by reprogramming their ECUs requested £280k to take the opportunity to purchase a business operating in the same field as the owner was retiring. As manufacturers restrict access to the tools required to make these modifications, this represented a golden opportunity. The only security offered was a Personal Guarantee and, reflecting this, investors were offered a return of 10% pa.

rebuildingsociety

Lent to Date: £15,800,000 latest figure available.

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

Highlighted Loan: A recruitment company operating in the HealthCare field requested >£81k to update their IT infrastructure. Their figures suggested that the savings from moving to a cloud-based system will cover the capital being borrowed during the course of the 5 year term while Personal Guarantees were offered by directors who had a number of properties. I was tempted to invest a very small amount for a return of 18% pa.

ThinCats

Lent to Date: £511,073,000.

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

Invest & Fund

Lent to Date: £60 million – latest figure available.

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

Highlighted Loan: Property Developers from the Midlands requested their eighth <£50k tranche of a <£1 million facility as they continue to convert former offices into 145 apartments. The latest report from the Monitoring Surveyor indicates that the works are expected to completion on schedule during September. At that point, the GDV is expected to be 66.6% while investors were offered a return of 7.5% pa.

LendingCrowd

Lent to Date: £64,933,896 – increase of £970,940 (1.52%) since the last blog.

On the evening this blog was compiled, 0 auctions were taking place.

Highlighted Loan: Interior outfitters who operate in prisons plus mental healthcare and automotive fields requested £79.5k to refinance existing debt, purchase electric vehicles and hire more staff. Net Assets were only just above the amount being borrowed while Annual Profits were £30k. There were no indications as to whether contracts were inplace to finance the additional people and vehicles or if there was a degree of speculation going on. Without clarification, I wasn't willing to invest. When the loan was reviewed other investors were getting an average return of 13.89% pa.

ArchOver

Lent to Date: £107,736,000.

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

Highlighted Loan: A company that has developed software that will enable buildings to become as energy efficient as possible requested £140k to help with their Working Capital requirements. The loan will be repaid by part of a £206k R&D Rebate from HMRC. Investors were offered a return of 9.5% pa.

Late Arrival: The R&D loan that had twice been delayed – firstly because the application to the taxman for the R&D rebate was late being submitted and then due to HMRC having a high workload – was repaid just after the last blog went to press. I was a little relieved as this was one of the first high return loans of this nature that ArchOver had listed.

A few days later, a second R&D loan also fell late also due to delays in progressing the rebate from HMRC. Assuming the outcome will eventually be the same, this is good news as the returns increased from 10% pa to a penalty rate of 12% pa.

CapitalRise

Lent to Date: £25 million approx. (latest available figure)

CapitalRise have listed 1 loan since the last blog.

Highlighted Loan: Recently listed was the first £720k tranche of a £1.09 million facility to modernise 3 apartments in the heart of London. The initial drawdown will enable the property to be purchased while the remainder will fund the development. The good thing about CapitalRise is that they always allow plenty of time for sales or refinancing – up to 8 months usually as is the case with this loan where the borrower intends to obtain a buy to let mortgage when the works are completed. The projected GDV is 62.6% pa and investors were offered a return of 8.5% pa.

PERSONAL P2P LENDING

Ratesetter

Lent to Date: £3.4 billion – latest figure available.

Returns: Interest rates are set according to supply and demand. They currently range from 2.9% pa to 5.5% pa depending on the length of the investment. These figures are slightly lower than when the last blog was compiled.

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 are going to revamp their offerings on 3rd October. Out goes the Rolling market and in come products called Access, Plus and Max. These will be distinguished by their "Going Rate" of return and the fees charged on withdrawals – respectively these are 3%/zero fees, 4%/30 days of interest charged and 5%/90 days of interest charge.

The going rate will be set by Ratesetter – clearly this will give a more consistent rate of return – although investors will still be able to set a higher rate which will be met if there are no funds available to lenders at the going rate or a lower rate if they wish to get their money earning ahead of the crowd.

The current 1 Year and 5 Year markets will continue with rates set by supply and demand.

Lending Works

Lent to Date: £192,277,066 – an increase of £2,262,093 (1.19%) in the past fortnight.

Returns: 5.0% pa and 6.5% pa depending on whether or not investors require quick access to their funds via an IFISA or standard account for 3 and 5 year investments respectively

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.