UK

Saving Stream Review – My Experiences

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Saving Stream LogoExactly 4 months ago I deposited money at Saving Stream and started lending. Saving Stream is a UK p2p lending marketplace operated by Lendy Ltd. that facilitates bridging loans, that is short-term loans for typically less than a year, secured by commercial property. Investors can see valuation documents for each listed loan. Saving Stream operates since January 2013 and with 25 million GBP loan volume originated since launch it is one of the mid-sized p2p lending sites in the UK.

Saving Stream is open to international investors; you don’t have to be a UK resident. Investors are paid 12% interest, accumulating starting at the day they bid on a loan. The interest is paid monthly (starting with drawdown); the principal amount is repaid at the end of the loan term. Saving Stream does not charge investors any fees.

Since I don’t have a UK bank account I used Transferwise when depositing money in order to save on bank fees. For larger amounts (approx. >1,000 EUR) it might be even more efficient to use Currencyfair so check that too.

Some of the smaller loans (e.g. 200,000 GBP) fill within hours of coming onto the marketplace. I do like that I can deposit money (Cashier>Deposit>Step 1) and bid with this money without having to actually wait for the money to arrive (which usually took 1-3 days with Transferwise).

Saving Stream Loan Listing
Screenshot of Saving Stream loans listed

The Saving Stream p2p lending marketplace is very simplistic and easy to handle. There is a view of the live loans. Only the green ones have amounts open for bidding. The secondary market does not have a seperate view but is integrated into the live loans view. There are no fees and markups/discounts when buying and selling on the secondary market. So when a loan part is listed for sale, the amount is just added to the available amount for this loan. Continue reading →

International P2P Lending Sites – Loan Volumes March 2015

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In March Lendinvest reported a surge in loan originations and had an exceptional month with more volume originated than Ratesetter or Funding Circle. I do monitor development of p2p lending figures 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 services.
Investors living in markets with no or limited choice of local p2p lending services can check this list of marketplaces open to international investors.

p2p-lending-volume-03-2015
Table: P2P Lending Volumes in March 2015. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month

Notice to p2p lending services not listed: Continue reading →

Funding Empire Now Offers Asset Backed Loans

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Funding Empire LogoFunding Empire entered a cooperation with the Business Lending Exchange (BLX) to offer asset backed loans on the marketplace. These new asset backed loan investments will be backed by realisable security and go through BLX’s proven and experienced credit assessment process – they will be available to Funding Empire investors from tomorrow.

Parag Patel is managing director of Funding Empire, a growing peer-to-peer business lending platform. Announcing the new product, he said: ‘This is the first step in an ambitious plan to deliver a number of different peer-to-peer investment products that we have designed to cater for all kinds of investors and their varying risk profiles. Asset finance offers funding for businesses and is a long established traditional finance product backed by tangible security. In this new model our lenders will receive monthly capital and interest repayments, unlike many other asset backed lending repayment structures that defer payment of capital and sometimes also interest, until the end of the loan term. We have had huge demand for a non-property based, asset backed product that provides monthly income – and we’ve responded to that demand.‘

Loans under this model will be for a maximum of 50,000 GBP over a maximum term of 3 years providing monthly capital and interest repayments to lenders. Loan requests will typically last between 5-7 days and will operate as fixed rate auctions. They will end either when the loan request is filled or it expires. Loan parts from this model can be traded as normal on our secondary loan market. Continue reading →

Seedrs Review – My Experiences Since Joining

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Seedrs logo15 month ago I joined the British platform Seedrs and started to invest in startups I consider interesting. Since then I have built my small portfolio, holding equity stakes in more than a dozen mostly British companies. In this article I share my experiences in the process.

What is it about?

On Seedrs startups can pitch to raise money offering investors an equity stake in the company. This is called p2p equity or equity crowdfunding. The startup discloses information about their product, plans (e.g. intended impact, monetisation strategy, use of proceed) and achievements so far to registered users. There is further information about the market they operate in and the team is presented.
The equity share offered is stated (e.g. 5%). This and the amount to be raised (e.g. 75,000 GBP) define the valuation of the startup that the startup has applied (in this example 1,425,000 pre-money, so post-money, that is after completed funding the startup’s valuation would be 1,500,000 GBP and the 5% equity share of the new investors represent 5% of 1,500,000 = 75,000 GBP raised). Note that the valuation is based solely on what the startup deems appropriate. Of course if the startup aims to high it risks that there is not enough investor demand and the funding fails.

How to get started as an investor?
I just signed up online and submitted some documents to verify my identity. The process is pretty straightforward. Seedrs is open to international investors, so investors do not have to be UK residents.

After signing up, investors can browse the pitches that are currently raising money. A pitch is usually open for 60 days, but maybe closed early by the startup if the goal is reached earlier.

Seedrs Screenshot
Current screenshot showing some of the open pitches

Clicking on any one of the pitches reveals the detailed information. It also shows who has invested and how much. Investors can opt to show their bid as ‘Anonymous’ in order not to disclose thier name to the Seedrs community. When an investor likes a pitch bidding is possible through the “Invest” button. As long as the pitch is below 100% funding an investor can bid first, and pay later (within 7 days of the pitch completing 100% funding). Once the pitch reaches over 100% it is marked as “overfunding” and investors can only bid, if they have already deposited funds available in their account. Payment is possible via bank transfer or credit card.

What happens after the funding

Seedrs completes all the paperwork with the startup. As Seedrs acts as a nominee for investors the individual investor does not have to do anything. The nominee structure means that the startup does not have to deal with each of the many individual investors but rather only with Seedrs as Seedrs represents all of these investors. Seedrs charges the investors a fee of 7.5% on the profits the investors make (note that this is not a fee on the investment amount (example: an investor invests 200 GBP in a pitch. Should there be an exit later where the value of the investors shares is now 300 GBP then Seedrs charges 7.5% of the 100 GBP profit; therefore the investor would be paid back 292.50 GBP). Note that your investment will be illiquid until the exit; as there are restrictions on selling the shares. Continue reading →