How to Invest Into Equity of P2P Lending Marketplaces

One of the main developments in UK p2p lending this autumn is the IPO (initial public offering) of Funding Circle. It will be open for investors that commit at least £1,000 through an intermediary (see list of participating intermediaries). Investing at the IPO means investors will invest at a very late stage of the growth phase of a startup. This article and this article suggest that it might not be a good idea to invest in an IPO.

But is there really a chance to invest into equity of a p2p lending marketplace at an early stage, if you are not an employee, business angel or VC? Up to a few years ago the answer would have been NO. But crowdfunding for equity came into use a recently and a surprising number of p2p lending companies have used this route to raise funding.

In this article I will look at the p2p lending services that have used British equity crowdfunding platform Seedrs to raise money. Some of these p2p lending company funding rounds have taken place years ago, but the interesting point is that Seedrs has a secondary market and new investors can buy shares from existing investors that invested earlier through Seedrs. The secondary market opens every first Tuesday of a month (next on Oct. 2nd) and stays open for a week. Some of the shares on offer are in high demand and often sell out within an hour. If you’d like to buy on the secondary market you should open your Seedrs account now, as you’ll need time to verify it and deposit funds prior to the market opening.

P2P Lending Startups that raised funding rounds through Seedrs

Assetz logoAssetz Capital
Assetz Capital is a UK platform for SME loans. Assetz raised two rounds on Seedrs for an aggregate of 5.3 million GBP. The last round was in October 2017 at a pre-money valuation of 50M GBP. Shares of Assetz capital are usually in high demand on the Seedrs secondary market.

Brickowner logoBrickowner
Brickowner is a UK property investment platform. Brickowner raised four rounds for an aggregate of 0.4 million GBP. The last round was a converible in March 2018. The pre-money valuation in Nov. 2017 was 2.5M GBP. There is usually some availability of Brickowner shares on the secondary market.

Crowdlords
Crowdlords is UK property crowdfunding platform. Crowdlords raised one round for 0.2M GBP in Nov. 2014. The current pre-emption round is at a pre-money valuation of 3.2M GBP. There is usually limited availability of Crowdlords shares on the secondary market.

Crowdstacker
Crowdstaecker is a UK platform for SME loans. Crowdstacker is running a round right now for 0.8 million GBP at a pre-money valuation of 19.5M GBP.

Crowdproperty logoCrowdproperty
Crowdproperty is a UK platform for property development finance. Crowdproperty raised 0.9M GBP at a pre-money valuation of 5.9M GBP in November 2017. There is usually some availability of Crowdproperty shares on the secondary market.

Flender logoFlender
Flender runs a platform for Irish SME loans. Flender raised on Seedrs round of 0.5M GBP at a pre-money valuation of 4.5M GBP in January 2017. Supply of Flender shares on the secondary market is scarce.

Investly logoInvestly
Investly is a platform for invoice financing operating in the UK and Estonia. Investly raised on Seedrs round of 0.7M GBP at a pre-money valuation of 6.6M GBP in March 2018. Investly shares have been in high demand on the secondary market.

Landbay logoLandbay
Landbay is a UK platform for buy-to-let mortage lending. Landbay did multiple Seedrs rounds from 2013 till 2018. The last round was in March 2018 at a pre-money valuation of 28.9M GBP. There is usually good availability of Landbay shares on the secondary market.

Orca logoOrca Money
Orca is an aggregator for UK p2p lending investments. Orca is running a round right now for 0.5M GBP at a pre-money valuation of 1.8M GBP.

Welendus logoWelendus
Welendus is a UK platform for short-term loans. Welendus raised 1.3M GBP GBP through 3 Seedrs campaigns including the currently running round at a pre-money vaulation of 6.0M GBP.

There are shares of mulitple other interesting fintechs available on the Seedrs secondary market, including Commuter Club which has an interesting connection to p2p lending: The loans for the transport tickets were financed first by Ratesetter lenders and now by Zopa lenders. There is usually good availability of Commuter Club shares on the secondary market.

P2P-Banking has a pre-launch notification service for upcoming new Seedrs campaigns. Sign up and you get a head start on new campaigns which might potentially include Assetz Exchange, a new Brickowner round and p2p lending startup Neo Finance.

Summing up: While there are other sources for shares in p2p lending companies, Seedrs is a good place to start looking.

This article is not an investment advice. Investing in startups bears significant risks, including total loss of investment.

Assetz Capital IFISA Launches

Assetz Capital has launched the IFISA offer allowing UK taxpayers to use the 20,000 GBP tax-free allowance while investing on the p2p lending platform.

New and existing Assetz Capital investors can open an IFISA wrapper on the platform and then invest into any automated Assetz investment account in December. The IFISA is also set to include the popular Manual Loan Investment Account (MLIA) in the New Year.
The IFISA is flexible and offers investments into p2p lons with interest rates ranging from 3.75% to 12%.
 
Stuart Law, CEO at Assetz Capital said: “Our IFISA …[is] great new tax-free investment choice for those that are new to peer-to-peer lending, but we also feel strongly about delivering a product that caters for our thousands of long-standing investors who prefer to choose their own loan investments within the Manual Loan Investment Account. That’s why we were determined to ensure that the MLIA will be allowed in our IFISA shortly after launch. … We will also shortly be releasing a queuing system in case we have excess demand for the IFISA that will allow our existing and faithful investors priority access to the tax free returns.”
Stuart Law gave P2P-Banking an informative interview in November.
The Assetz Capital IFISA offer has been added to the P2P-Banking IFISA comparison table today.

Interview with Stuart Law, CEO and co-founder of Assetz Capital

What is Assetz Capital about?

Assetz Capital is now the UK’s second-largest peer-to-peer business and property lender and also the second largest in Europe.  Since 2014, we have been providing competitive loans to credit-worthy SMEs and attractive returns to investors. We provide fairer and more accessible business lending to small and medium sized businesses and property developers throughout the UK.

Since our launch, we have lent more than 350 million GBP to credit worthy businesses whilst providing returns of 30m GBP to our investors using a number of automated investment accounts that earn gross rates of return between 3.75% – 7% per annum and also permitting manual lending at rates often above that. Almost all funding to date has come from retail investors and maintaining support for retail investment is one of our business aims.

What are the three main advantages for investors?

Firstly, we only lend to businesses who we assess as credit worthy businesses with tangible assets. Tangible security is taken for each and every loan – which is unusual for peer-to-peer lenders – in order to reduce the risk of capital losses for investors, while also lowering the cost of borrowing for businesses. We also deploy traditional credit assessment techniques rather than rely solely computer-based borrower assessments, meaning our processes are fast, meticulous and human. As a result of our processes, Assetz Capital’s expected loss rates are amongst the lowest in the industry (currently standing at just 0.35% across our live loan book).

Secondly, we cater for all types of investors. In the past four years, we have experienced strong annual growth year on year, and have attracted a wide set of sophisticated and consumer retail investors, as well as attracting family office and institutional investment. We believe it is because we have demonstrated excellent credit skills and loan performance, while delivering strong net yields.

Thirdly, we are also the only major UK P2P platform to still offer a manual investment option. This allows investors to choose exactly which borrowers to lend to, allowing them to cultivate a bespoke investment portfolio and choose appropriate levels of risk in their investments. For those wanting automated accounts, we offer a wide selection ranging from our Access Accounts to a Green Energy Account, all of which cater to those with less time to invest. This combination of accounts offers the type of control that an individual investor may require, allowing people to pick and choose from a wide range of individual loan opportunities, and also the ability to automatically lend if they are time-poor.

What are the three main advantages for borrowers?

Assetz Capital has been providing small and mid-sized businesses with flexible and quick access to funding for future business and employment growth with competitive rates.

Rather than being just a website with automated credit assessments, Assetz Capital is run by finance, banking, credit and lending professionals with huge industry experience, alongside our large UK-wide network of employed Regional Relationship Directors who visit potential borrowers and help structure the loans.  I believe that this is unique to the P2P industry, and is reassuring to both business borrowers and lenders that behind the technology and website there are actual, qualified humans with relevant experience to help structure good quality transactions. Borrowers really appreciate the ability to structure their loan requirements face to face with experienced professionals instead of encountering the “computer-says-no” problem of today’s banking industry.

We’re also a lean business, and as such we have lower overheads than traditional lending institutions.  Coupled with the fact that we only lend to credit worthy businesses holding tangible assets, this means our cost of borrowing for businesses is kept low.

With the uncertainty that has come with Brexit, we have found that our platform is overcoming some of the issues which many UK businesses are currently facing.  We believe that fixed rate loans offer businesses a stable way to predict part of their finances, regardless of external market conditions. Brexit may put pressure on banks to reduce loan availability or raise rates substantially, but alternative finance providers such as Assetz Capital are continuing to offer fixed rate loans.

What ROI have investors made on average on the platform in the past?

As a business, we are totally transparent with our top-line numbers, and these are updated live in a prominent position on our website. In just over four years, investors on Assetz Capital have collectively earned gross returns of around 30 million GBP on their investments, relating to more than 350 million GBP in loans to date.  We have a big announcement at the beginning of November that further endorses these results.

Stuart LawAssetz Capital has succeeded in growing loan originations sharply in the past 12 months. How did you achieve that and were intermediaries like brokers a major factor?

While much of our loan origination is organic, brokers have also played a vital role in referring many small and medium sized businesses to us. To date, more than 350 successfully funded projects have come through brokers, and we predict that this will grow to approaching 1,000 by the end of the 2018 year.  In fact, this has been so successful, we are actively working to increase our broker network significantly in the next two years, and have recently revealed a strategy to further support brokers through a number of methods.

For example, our network of nationwide Regional Relationship Directors is supporting more brokers locally. We are also offering new product and pricing improvements to further build our relationships with brokers. Our face to face approach is very much liked by brokers and their borrowers alike and this is also a factor in our success, as is the experience of our team.

What will the soon to be launched Assetz Capital IFISA offer? Will it offer the same range of investments and interest rates as currently? Will the IFISA be flexible?

Now that we have achieved full authorisation from the UK regulator, the Financial Conduct Authority (FCA), we are preparing to launch our Innovative Finance ISA (IFISA), which should be ready by the end of 2017.  While I can’t reveal all the details at time of writing, it will be highly flexible as it is an extension of our very successful model.  There is no intention to have any ISA fees for normal transactions and we also intend for our main lending investment accounts to also be available at the same rates in the ISA. We also intend to release our next generation investment dashboard that we believe will keep it at the forefront of the industry.

Will you soft launch it to existing investors first or will it be open to all from day one?

We will open the account to all comers straight away, not just existing investors.

I heard Assetz Capital is profitable? Can you walk me through some of the key facts of the financial side of the company, please?

Very few FinTech businesses are even close to breaking even, so it was a momentous day this year when we proudly claimed we made a seven-figure profit (GBP) for the last financial year to March 31st 2017.  I believe that this is a testimony to our business model where we refuse to believe fast growth should be at the cost of profit and cashflow. While several others built their loan books up quickly with a more lenient approach to credit and very substantial levels of outside investment to cover trading losses, we took a more cautious approach to credit risk and built our entire business on an initial seed funding round of 1m GBP and Series A equity raising of just 5m GBP more. We have now lent similar levels to the whole of 2016/17 year in the first six months of this year and also booked profits of around the same as last year in this period. We have a healthy balance sheet and have just announced a new Series B equity raise that will bolster it further.

You are currently raising 1 million GBP through a crowdfunding for equity round on Seedrs. What will you use these funds for?

We had a very successful raise of 3.2m GBP on Seedrs in 2015, and now we are looking to fund a number of short-term capital expenditure projects, which are aimed to help the company continue its substantial growth.  We believe that this may well be the last one prior to an institutional investment round or IPO but we will keep this under review and are really pleased to have not just delivered thousands of people great levels of interest through our platform but also delivered hundreds of investors a strong equity growth also as a result of the Series B being priced at 250% approximately of Series A carried out two and a half years ago..

What are your views on Brexit, the impact on UK fintech in general and on p2p lending in particular?

With the many political, regulatory and economic twists and turns of 2017, uncertainty continues. While many of those involved in business and investment are nervous, there are others benefiting and seizing on opportunities. Since the Brexit vote, no one is really sure of what the longer-term impact will be on businesses, investors or the UK market in general, however from the P2P market perspective, this has been an important year to further solidify its stature and firmly place it as a viable alternative to banks for both investors and borrowers.

We see that Brexit has actually had a positive effect on P2P, and all indications signal that the industry will benefit further in 2018 as a result of banks seeming to entrench somewhat ahead of the outcome being more visible. The impact on wider Fintech is more varied and we see a disincentive to set up in London to some degree for some businesses but for those here I expect they will take a wait and see approach. The possible loss of the ability to ‘Passport’ UK regulatory permissions across Europe or vice versa could be the major loss for companies intending to operate both here and in Europe.

The main issue is that the result of the Brexit vote is still some way off and indeed it is entirely possible we could see a continuation of the recent economic strength if Brexit turns out well economically and some real challenges if it does not. It is too early to call but the former would be my expectation on balance.

Where do you see Assetz Capital in 3 years?

Assetz Capital will continue to grow, to offer new and innovative products to investors and borrowers, and to hold true to our founding principles of fairness to all our stakeholders including investors, borrowers, shareholders and staff. We have already seen growth of around 100 percent year on year since 2014, and we believe that this rate will continue.  We have very ambitious plans for the business, and certainly we see ourselves in three years as becoming one of the leading secured lenders to creditworthy businesses looking for additional funding as well as one of the top few P2P platforms for investors looking for choice, flexibility and fair, risk-adjusted returns.

We want to be recognised as being a real contributor to the economic success of the country, on several levels including helping house building volumes increase to address the housing shortage, helping businesses grow and increase employment, helping private investors earn more from their hard-earned capital, helping institutions deploy capital on market-leading risk return ratios and finally helping incentivise and contribute to a greater quality and breadth of financial education in today’s society.

P2P-Banking.com thanks Stuart Law for the interview.

Assetz Capital Launches Property Secured Investment Account

P2P Lending marketplace Assetz Capital today announced the launch of another account type. The Property Secured Investment Account (PSIA) is marketed as a way to invest exclusively in property backed loans with automatic diversification intended to help investors spread their risk across a diverse range of lending. Every single loan considered for this account is automatically selected or rejected upon the basis of the level of property security that it offers. The loans automatically selected for investment by this account are only those that have no expected loss in the case of that loan defaulting in the future, even after any estimated recovery costs.

The target rate for the Assetz PSIA account is 5.5%. (Interest is quoted gross at the target rate, although actual returns could be lower)

Assetz Capital Review – 30 Days Access Account with 4.75% Target Rate

Recently I opened an account at p2p lending marketplace Assetz Capital to gain some first hand experiences. Assetz Capital offers secured business loans to small and medium British SMEs. I decided to start with the 30 days access account as it is mostly hands off and deposited a tiny amount, which was credited within an hour. It currently offers a promotional target rate of 4.75% (instead of 4.25%) and allows to withdraw funds with 30 days notice in normal market conditions. Investors, who want to benefit from the promotional rate need to act now, as it is only applicable for deposits made until 11.59am on 6th June 2017 and is valid for a maximum of 90 days from the date of the deposit.

Assetz Capital has a minimum investment amount of 1 GBP. Assetz is open to international investors, but a UK bank account is required. If you do not have one, I suggest opening one at Transferwise. (UPDATE: but do check comment below this article, also see my Transferwise Borderless account article). All Assetz Capital (except the MLIA) investment accounts are protected by a provision fund. There are no fees for investors.

Assetz Capital says the 30 days access account is extremly popular with investors. Since the promotion offer was launched 7 weeks ago, 23 million GBP have been deposited in this account. Assetz also offers a quick access account with 3.75% target rate, designed to provide immediate access to cash, in normal market conditions, for investors. Currently 19 million GBP are invested in this account. Further account types are the ‘Great British Business Account’ (GBBA) with 7% target rate, the ‘Green Energy Income Account’ (GEIA) with 7% target rate and the ‘Manual Loan Investment Account’ (MLIA) with 5.5% to 18% gross rate. See comparison of Assetz accounts. Assetz also features a secondary market without fees providing liquidity.

P2P Lending Service Assetz Capital to Launch Quick Access Account

Assetz Capital LogoBritish p2p lending marketplace Assetz Capital will launch a new ‘Quick Access Account’ (QAA) in the very near future.

The new account has a capped target rate of 3.75% gross per annum (before tax and any loan losses) and benefits from the added protection of a Provision Fund. The target rate can vary each month, being set at the beginning of each month based on the loans within the account, but the target rate will never fall below 3.75% gross per annum. Investors may invest up to 25,000 GBP each and the account will be capped at 1M GBP initially and is expected to grow in the future.

The QAA is designed to provide the highest possible speed of access to their money if an investor wishes to withdraw funds at any time, for whatever reason. In normal market conditions transferring funds between Assetz Capital Investment Accounts should be possible within seconds, while withdrawal of funds completely should happen within two days.

There is no fee for immediate access nor any notice period.

The accounts main use will likely not be long term investment, but rather help investors avoid cash-drag while waiting for new investment opportunities to open. Chris Mellish, Technical Director stated: “This isn’t an invest and hold account, ….  One feature … is that you can set your other accounts to automatically invest idle cash in the QAA.  So you could have 10K GBP invested in the MLIA, for example, waiting for a loan to draw down or waiting for .. loan units to become available and that money will earn 3.75% until it’s needed.  The system will automatically pull the money out of the QAA as soon as loan units become available on the loans you’re interested in.”

Stuart Law, CEO at Assetz Capital commented, “We believe that quick access to funds is a fundamental challenge in any investment product – whether it’s a bond, an ISA or a peer-to-peer product.  The Quick Access Account not only means that money can be accessed quickly, but because of Assetz Capital’s model, the account offers a target rate of 3.75% gross per annum which should appeal to those looking for good risk-adjusted returns.”

The Quick Access Account invests in both short and long-term loans and interest is earned and paid monthly. The account always retains substantial cash balances in order to facilitate quick access for investors who require their investment back on short notice and really helps address the issue on many P2P platforms where uninvested cash does not usually receive any return. An investor can press a button to choose to invest any spare cash they have at any time in the QAA and then release it when they wish to invest it elsewhere.

Mr Law, added: “This account really opens the world of peer-to-peer lending up to the mass market. Those investors who want to dip a toe in the water, earn a fair return and have quick access to their cash rather than be tied up in a 5 year loan can do so. Those who were worried about being able to access their funds quickly can be reassured that this product delivers that and therefore the returns on offer can be realised.” Continue reading

How I Explored P2P Lending – My Review Part I

This is part I of a guest post by British investor ‘GSV3Miac’.

About the author.. I spent 25 or so years in software engineering, programming everything from IBM mainframes to microchips in early Hotpoint washing machines. I must have been halfway competent (or not) since I wound up managing a software development group, a large IBM computer centre, workstations of networks and PCs. When my (American owned) factory shut down I spent the last year (in between managing the closure) retraining as an IFA. I qualified, but I never actually practised – I took my redundancy / pension and headed for the hills (of Shropshire). That was a while ago, so don’t expect me to know chapter and verse on the latest tax wrinkles! *grin*

How did I get into P2P (misnamed .. it’s largely P2B these days .. much of is headed for B2B!) lending? Blame my mother .. she died, and left me a sum of money which was not expected, and not really critical to my future. Having no children (there being, IMO, no people shortage on the planet) it is probably all headed for charities one day, so I thought I might as well have some fun with it. Before I did that, I had, of course, gone through the approved checklist .. i.e.

‘Emergency’ easy access cash account(s) .. tick.

Pay off the mortgage .. tick.

ISA(s) .. tick

Pension Provisions .. tick

Stock market investments / bonds / shares / funds ..tick

OK, anything left can be risked a bit. (I accept that stocks and shares and even cash has =some= risk attached, but now we are looking at ‘high wire with no net’ type options .. VCTs, EIS schemes, and yep .. P2P lending). If you want to plan for ultimate disaster (Ebola pandemic, nuclear war and global financial meltdown) then probably investing in long dated canned food, and an underground shelter on an island upwind from everywhere, is your best bet. More modest (and likely) risks can be mitigated by spreading your investments around a lot, and by being conservative in your assumptions of what you might get back.

I started my P2P journey (in 2013) with Funding Circle (henceforth ‘FC’) and ZOPA, both of which I had heard about from a friend, and I dipped my toes in rather gingerly at first. ZOPA had been going for some time, and I probably missed their best years (when you could decide who to lend to, and later when you could at least still decide at what rate you’d lend). ZOPA had just introduced their ‘safeguarded’ lending, and started fixing the rates, so even their name (‘Zone Of Possible Agreement’) no longer made sense. I stopped lending with them after less than 6 months .. the rates were just not attractive (and unpredictably so). On the plus side, the exit from ZOPA was fairly cheap and painless.

As an alternative to ZOPA I went to look at Ratesetter (RS), which still lets you set the rate(s) you are willing to lend at over 1,3 or 5 years (or monthly). No control over who gets it, but at least some control over what they pay; and (like modern ZOPA) there is a provision fund which should hopefully protect you from bad debts. Exit from RS can be quite expensive though, so best to lend for no longer than you are sure you can do without the money for. Basically they charge you the difference between the rate you would have got for the actual period you lent for, and the rate you got by lending for a longer period. I still like them, for simplicity with just enough control to make it interesting, and I lend / recycle in the 3 and 5 year markets depending on the rates at the time (typically I expect at least an extra 1% for signing up for the extra 2 years). Continue reading

How I Selected My Preferred P2P Lending Marketplaces – Part II

This is part II of a guest post by British investor ‘Pete’. Read part I first.

The number P2P / P2B platforms in the UK has increased quite quickly over the past few years and I have currently settled on 3 further UK platforms that suit my needs and I strongly believe will be with us long term. In saying this I am not in possession of any privileged information and I am not by inference making any adverse comment about other platforms.

In alphabetical order

Ablrate

One of the new platforms (launched July 2014) that I have chosen to invest in and so far I have had a very positive experience. Specialising in secured Aircraft leasing and Plant and Machinery I have had the chance to diversify into a market that I knew little about before I started on my ‘due diligence’. The market may be new to me but there is a wealth of responsive experience behind Ablrate and coupled with a website update and promised increasing flow of loans I anticipate that my exposure with Ablrate will continue to grow. One interesting ‘innovation’ available on certain loans is ‘Instant Returns’. With long draw down times on some loans the potential for ‘dead money’ is large, instant returns circumvents this issue.

Assetz Capital

I have been investing with Assetz Capital since the second quarter of 2013 and have built up a diversified £ five digit portfolio of secured loans which continues to grow1. As with Ablrate there is a good, responsive and experienced team behind the web site, something that has become more than apparent when dealing with the occasional distressed loans that we must all expect when investing. Assetz Capital have big plans for expansion (they have already grown considerably since I started investing) and a relatively recent change to the way loan parts are bought has removed a very large percentage of the ‘dead money’ scenario that many of us early adopters experienced, not universally liked, I for one view it as a very positive move that has helped to push up my return on investment. I look forward to new opportunities this year.

1 I do not invest by choice in the provision fund protected ‘Green Energy Income Account’ preferring to take on the risk in return for a slightly higher returns.

Wellesley & Co

Again I was one of the early adopters and took advantage of some very attractive introductory rates that were offered. The loan and repayment terms suited my needs perfectly for tax planning purposes. Since then the rates have unsurprisingly been lowered and whilst Wellesley & Co have expanded rapidly and their range of investments on offer has expanded I find myself already invested in those areas with other platforms so I am running full term with my current investments whilst keeping an eye open on what is on offer.

Bondora

I also invest in one non UK platform, Bondora. This would probably be regarded as the ‘odd one out’ in my list of platforms. Far more volatile than the other platforms that I invest in Bondora has expanded rapidly since I started investing in the second quarter of 2013. I have experienced several changes to the platform, some which I have liked and several that I have not. I have experienced new markets being opened up and some eye watering rates of default in these new markets. That said and in spite of the treatment of defaults by the UK tax man and the strengthening of the Pound against the Euro (@16% since I started investing) my return after tax has remained positive. I spend more time on this relatively small percentage of my total investments to keep the returns positive than I do on any of the others. Continue reading

P2P Lending Experiences of a British Expat Living in the Eurozone

This is a guest post by British investor ‘JamesFrance‘.

Since retiring and leaving the UK to live in a warmer dryer part of Europe, I fortunately found myself able to live on less than my income, so had the problem of how to best manage these savings, which I wanted to protect from inflation and if possible achieve a positive return on by some type of short term investment. Unfortunately I never found a British savings account which would accept money from non residents, so I was obliged to accept a very low interest rate from my existing UK bank. I do have other long term investments so was prepared to take some risk to achieve a better return.

I had seen articles in the British press about Peer to Peer lending, which tended to refer to the big three, Zopa, Ratesetter and Funding Circle, none of which were prepared to allow a non resident to open an account, so I soon forgot about that as a possibility.   In August 2013 I read that another P2P business lending platform, Thincats, was joining the P2P finance association. I decided to look at their website and was surprised to learn that they could accept non resident investors.

Thincats is really for those with larger amounts to invest, having a minimum bid of 1000 GBP per loan, so it is difficult to achieve adequate diversification for relatively small sums without using their syndicates, which I didn’t find interesting, so I took the plunge and made 10 loans.   Needing 1000 GBP per loan meant that after that it took me some time to accumulate enough for my next bid, so I had the problem of uninvested money not earning until my next loan drew down.   I also found that some loans were repaid early which was reducing my returns because of the drawdown delays.   I think this would be an ideal platform for those with large amounts to invest, as they have a good flow of loans, there is plenty of information about the borrowing companies and once their new website is launched the process should be much easier.   A minimum 25 GBP fee for selling a loan on the secondary market makes it expensive to sell smaller amounts, which means that after several repayments a sale would not be economic.

By this time I was finding other possibilities with the help of websites such as P2P-Banking.com, where I read about isePankur in Estonia, which has an English language version and seemed ideal for any spare Euros languishing in my Euro account and only earning a secure 1% interest. isePankur now renamed Bondora, has been quite exciting to invest through as there have been many changes to the auto bidding system since I started there in September 2013, so just as I became used to the way my chioices were working out, it was all change so I had to start again to think of a good strategy.   They have been expanding rapidly and now issue personal loans in 4 European markets.   The defaut rates for their Spanish and Slovakian loans have been very high, so I have been avoiding those areas since that became apparent, which means time consuming manual investment because the auto bid system no longer allows choice of country.   I do not sell overdue loans on the secondary market, so my returns on the platform will be completely dependent on the eventual recovery of the defaulted loans, which will only become apparent after a few years.   The interest rates are high so I have accepted the level of risk involved. Continue reading

P2P Lending Marketplace is Raising 2M GBP via Seedrs

Assetz LogoP2P Lending Marketplace AssetzCapital is raising 2 million GBP via a convertible note on Seedrs from the crowd.

Assetz Capital is one of the established, medium sized UK p2p lending marketplaces. Since inception they originated over 60 million GBP in loan volume. I covered Assetz Capital in when I visited them last year. How a convertible note pitch differs from a ‘normal’ equity pitch on Seedrs is described in this document.

Minimum investment is 10 GBP. The valuation cap for this convertible is 60 million GBP and the discount rate is 10% provided that the convertible shares are issued within 12 months. In the event that the convertible shares are issued after 12 months, the discount rate shall increase by a rate of 0.8% per calendar month for a further 11 months, increasing to 20% in the 24th month. The discount rate will then be capped at 20% thereafter. Continue reading