Which P2P Lending Marketplaces in Europe Accept American Investors?

European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors. But if you are a US resident, you may have made the experience that you cannot register on some marketplaces. This is mainly due to KYC (know-your-customer) and AML (anti-money-laundering) requirements, which get more complicated if the client is outside Europe.

I have asked many of the European p2p lending marketplaces, whether they accecpt US residents and US companies as investors.

Here is an overview of 5 services (sorted aplphabetically) that do allow US investors. I have not provided a review for each of the service as the article would have gotten too long, but you can easily find news and reviews by entering the company name into the search box on the upper right of this blog.

On some platforms you need a bank account in the European Union. In most cases Transferwise borderless or Revolut will help (while technically e-money accounts, they function pretty similar to bank accounts) and do not charge any monthly fees. They are both very useful for currency conversion (Revolut is better). On Assetz Capital the currency is GBP. On the other marketplaces it is EUR. Mintos has additional currencies. Transferwise borderless is available in all US states except Hawaii and Nevada. Revolut is currently rolling out the service in the US.

Mentioned new customer cashbacks were correct at the time of the publication of this article. If you are reading the article at a later time, it may have changed. A current list of cashback offers is here.

Assetz Capital

Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest. Other product types offer higher rates.
US investors are welcome. UK bank is account required – see notes above. US companies are eligible, but verification might take longer than for individuals. Expect 1-10 days for company registration.

Assetz Capital cashback for new investors: 50-250 GBP (dependent on investment amount; minimum 1000 GBP). To get it just register using this link: Assetz Capital registration and start lending

bondora-logo-2016bBondora

Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.
US investors need to be accredited investors to use Bondora. A bank account in the European Union is not necessary. US companies are eligible to invest. Bondora recommends that interested US investors and companies contact them at investor@bondora.com or by phone at +44 1568 6300 06 (during business hours, Mo-Fr: 9–17 EET) to check eligibility and clear any questions concerning registration.

Bondora cashback for new investors: 5 EUR, to get it just register using this link: Bondora registration and start lending

Estateguru LogoEstateguru

Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.
US residents are eligible, if they have a bank account in the EEA (European Economic Area) – see notes above. The answer by Estateguru states that a Revolut or Transferwise account is not sufficient for registration purposes but may be used for deposits later. US companies can invest, if they have a bank account in the EEA.

Estateguru cashback for new investors: 0.5% (1% in October) cashback on all investments in the first 3 months. To get it just register using this link: Estateguru registration and start lending

FlenderFlender

Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.
US investors and US companies are eligible.

Flender cashback for new investors: 5% on all investments in the first 30 days after signup. Register using this link Flender registration and start lending

Mintos

Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.

US investors and US companies are welcome. A bank account in the EEA (European Economic Area is required) – see notes above.

Mintos cashback for new investors: 1% cashback on all investments in the first 90 days. To get it just register using this link: Mintos registration and start lending

 

The following companies replied to my query that they do not accept US investors: DoFinance, Grupeer (may change in future), Monethera, Ratesetter, Robocash, Swaper, Twino, Wisefund, Zopa

P2P lending bears high risks, including total loss of investment. This article is not investment advice.

October Stops Catering to German Retail Investors

Marketplace October has just announced that due to regulatory requierements it won’t enable retail investors from Germany to invest into any new projects starting next week

In July 2019 we announced that we were going to launch October in Germany by the end of the year after the arrival of our local CEO, Thorsten Seeger. This is now coming fast with our first recruitments and operations in Munich.

For regulatory reasons we cannot open German projects to individuals. This is because the BaFin (German Federal Financial Supervisory Authority) requires the use of a fronting bank to allow retail investment in loans. We have studied this possibility, which has been chosen by other platforms, but the additional constraints and costs make this an unacceptable alternative under our business model.

German projects will only be funded by our institutional lenders (nor Spanish, Italian, French or Dutch retail lenders will be able to German projects). Additionally, lenders who are tax-resident in Germany will not be able to lend to any projects on the platform. Now that we operate locally, we have to apply local restrictions.

This means that you will not be able to lend on October as of next week. You will still be able to:

  • Receive repayments on your current projects,
  • Debit your October Account at any time.

We will provide you with your annual tax-summary (and this as long as you will be receiving repayments on your October Account).

We are really sorry to announce this news but have to comply with the German regulation. We have at heart to treat all our lenders, borrowers and partners equally wherever we operate. We will continue to work hard, with our peers in the European Crowdfunding Network, to allow German lenders on the platform in the future. How? We are confident that regulation, particularly at European level, will evolve to enable you to support the growth of European companies.

We are at your disposal should you have any questions.

International P2P Lending Volumes September 2019

The table lists the loan originations of p2p lending marketplaces for last month. Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 639 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms.

Milestones in culumulative volume lent crossed this month:

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA rates.


Table: P2P Lending Volumes in September 2019. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed: Continue reading

Estateguru Secondary Market Launch

Estateguru LogoAfter several month of waiting since the first announcement, the Estateguru secondary market will now launch. In the past weeks could participate in a closed beta test prior to the coming public launch of the market. Estateguru used this to get some feedback and to fine tune the wording (e.g. in the FAQ).

Overview of important facts about the Estateguru secondary market:

  • seller pays a 2% transaction fee
  • loans in all status can be offered, including late and in default
  • only the total loan part can be offered, it is not possible to split it and sell parts of it
  • seller can set the price at par or at premium. Discounts are not possible
  • buyer gets all repayments and interest after the sales transaction date
  • bought loans can not be resold for the next 30 days
  • each listing runs for 7 days. Unsold parts will be removed automatically

And now, without further ado, this is how the secondary market looks:

Estateguru secondary market
Fig. 1: Estateguru secondary market

On top of fig. 1 you can see the available filters. Also most columns can be used for sorting. The red highlighted loans are parts I listed for sale. I’ll now show you the steps necessary to sell a loan.

First I consented to this notice for activating the secondary market.

Secondary market activation
Fig. 2: Activating the secondary market

Then I went to my portfolio, selected the loan, I wanted to sell and clicked the “Sell” button on the right. Now I got to this screen:

Estateguru sell loan
Fig. 3: Setting the sales price

There is a slider on the upper right for the sales price. It is preset to 2% premium, to recover the sales fee. I set a higher premium here. Below the price the AROI for me (the seller) and the AROI for the buyer is shown. As the AROI is prominently featured in the market overview (see fig. 1) it is an important criteria for the buyer. And 3.56% is probably to low to achieve a sale. In fact this part did not sell in the 7 days (the other listed part #1301 did sell, see Fig 5.).

Here is the Estateguru AROI definition: ‘AROI (annualised return on investment) is an estimated annual return based on the total return on investment’.

After I clicked “Sell my claim” there is a screen for entering the password.And after that a display where Estateguru confirms that the loan is listed for sale


Fig 4.: Email I received notifying me of a successful sale of a loan

I like the overview table of the secondary market. As improvements I suggest to display the premium percentage and to allow filtering by status. Maybe that will be added in the next release. I also asked if they could add the ability to trade at discounts. The reply was that they wanted to offer an easy opportunity to sell loans and not overcomplicate the tool.

My first impression

The secondary market delivers what it aims to do: allow an early exit by selling loans. The 2% fee is relatively high, I expect that will keep the traded volume low. Sellers of late and defaulted loans will have to carefully consider the price set, as I think that with any positive news updates on the recovery status of the loan, the loan part will be bought, before the seller has a chance to read and react to the update.

 

International P2P Lending Volumes August 2019

The table lists the loan originations of p2p lending marketplaces for last month. Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms.

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA rates.

P2P Lending Statistic 08/2019
Table: P2P Lending Volumes in August 2019. Source: own research
*The Mintos figure is a bit too low this month, as it misses the originations from the last two days.

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed: Continue reading