Funding Secure – An Introduction


Funding Secure started life in 2012 as a pawnbroking P2P platform. To date it has issued £175 million worth of loans and advertises an investor base 3,500. Although it started life as a pawnbroking platform, for the last 3 years it has taken on property backed loans also. Funding Secure loans are usually for 6 month terms and unlike some platforms who pay a monthly return, loans accrue interest daily but is not paid until the end of the term and only if the loan is settled.

Minimum deposit for Funding Secure is £100 made by bank transfer, with a £25 minimum loan part purchase. Rates of return on offer range from 12.00% to 16.00% per annum. There are no charges for lenders and Funding Secure offers a secondary market for early sell out dependant on a buyer being available.

The Secondary Market

Funding Secure’s secondary market place is a little more complicated than some of it’s competitors. When it comes to tax liabilities the individual left holding the investment at term is liable for the entire term. For example if you snap up a 3 month old loan hold it for the remaining 3 months you are liable for the tax on profit for the full 6 months. This is because the interest for the whole term is paid to whoever holding the loan part at maturity. To reflect this you can pick up secondary loans for as much as 1% discount (or a 1% premium if demand for a particular loan is high, or is closer to maturity) .

On the flip side of this if you are selling primary loans, and effectively passing on the tax liability, or selling for a premium (up to 1%) you can make a tidy profit (with a significant volume) when the it comes to tax liabilities at the end of the financial year. I would seriously suggest holding off from getting involved in the secondary market if you are either new to P2P or the Funding Secure platform for at least the first year because if you are not too savvy you may end picking up problematic loans with tax liabilities you ratter wouldn’t have. Some loans get dumped for a reason.

The Funding Secure dash board

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The Funding Secure dashboard

Available funds – is the in-active balance on your account. This can either be invested (£25 minimum) or withdrawn.

My current investments – shows the total principle you currently have invested in loan parts. These funds can only be released on term and repayment of the loan, or a successful sale on the secondary market place.

Allocated funds – shows any funds you have put to a loan part that have not yet been accepted (interest will not accrue until the borrower accepts you offer of funds). It can take a little a while for offers to be accepted ( I’ve experienced as long as 3 weeks ).

Available investments – lists the investments currently available on the platform for investment. Information includes –

  • Reference – the loan ID.
  • Title – a brief description.
  • Amount – total size of the loan.
  • Rate – Anual ROI.
  • LTV – is the Loan to value of the security (capped at 70%).
  • Progress – shows how much of the loan has been funded so far.
  • Updated (scroll right) – shows any recent material changes to the loan.
  • Invest (scroll right) – shows the button to invest.

Bricklane – 6 Month Results

6 Month Results

The results for the first 6 months of investing through Bricklane are in, and they are as follows –

Expected ROI 5.00%
Actual ROI 0.54%

Now there needs to be some background to these figures for them to make a little more sense. The Expected ROI is taken from a few published figures from 3rd parties and I levelled 5.00 % as a sensible average target. The fact is Bricklane don’t make a big deal of an expected return, partly because regulations require at least 2 years of track record to advertise a return as a figure (which Bricklane are not quite there), but the main reason being Bricklane is very different to a traditional P2P investment platform ( in-fact it actually classifies as an ISA) . It’s easy to calculate an expected return based on the given percentage for each loan part, but with Bricklane you are investing in a share of an overall property portfolio, plus a share of the rental dividend pro rata.

So although a near 90% disparity between ‘Expected ROI’ and ‘Actual ROI’ looks worrying, it’s not as bad as a seems. Bricklane charge a 2% deposit fee (ouch) on balances under £25’000 (1% for over £25’000), plus a 0.85% annual servicing fee. This meant it took a couple of weeks short of 6 months to realise a profit. If that trend continues for the next 6 months (without anymore deposits) that would result in an annual return of just north of 2%, based on portfolio growth. That is only one revenue stream though, the second being a share of rental income paid every 6 months.

At the time of writing this blog I have now received my first share of rental income dividend, however because it fell just behind the 6 months cut off for compiling these figures (it will be included in the figures for month 7) I didn’t want to distort the results for 6 months. I’ve give you a clue though, 5.00% annual ROI is looking fair right now.

To conclude, I must admit I’ve been lukewarm about Bricklane for months, thinking a 2.00% annual ROI (- 1.00% when factoring in inflation) is hardly call for cracking out the party poppers. Now with the rental income dividend paid, it starting to look a little more rosy. What i have always liked about Bricklane though is firstly it’s heavy weight backing ( backed by Zoopla ), secondly you are invested in owned bricks and mortar, not a debt transaction that can default like most P2P property platforms, finally there are no withdrawal transactions or secondary market queuing. So once you have paid the deposit you money is theoretically accessible at any time.

I am considering increasing my investment in Bricklane but it means writing off most of this years gains (at the cost of a 2% deposit charge) for higher gains later on down the line, which of course are never guaranteed.

Lendy Results – 12 Month

12 month review

1 year has now elapsed since i started investing with Lendy and the results are as follows –

Expected ROI 11.83%
Actual ROI 3.77%
No. Live Loan Parts 12
No. Loan parts with repayments overdue 9 (75.0%)

To compare these 12 month results with the previous 6 month results, the ‘Expected ROI’ has been reduced as i picked up a couple of 11% loan parts rather than the usual 12% loan parts. As for the ‘Actual ROI’ i should point out firstly a change in strategy. Several months ago i decided to sell off all my healthy loan parts and withdraw 20% (the most i could sell) of my liability from Lendy. This was a result of increasing concern about the lack of action on deteriorating/overdue loans. This action has been a factor in the gap widening from ‘expected’ to ‘actual ROI’ from 61.83 % to 68.13 %, although even with this factored in the trend is still diminishing returns, as part of the return is made up from affiliate credit earned through this blog.

Loan parts were also reduced in the sell off from 16 to 12. A massive 9 (10) of 12 are over due or in difficulties. The possible 10th is one the most perplexing instances i have seen from Lendy. This was a London based property loan that went live before due diligence was complete and it was quickly discovered that the borrow did not have the facility to repay the loan. As a result secondary trading of the loan was immediately suspended and hence investors have now been left holding a loan they can not dispose of as a result of Lendy making a rookie error. I should add though at this time interest payments are being made but i believe Lendy are being very optimistic to dispose of this loan with in the agreed term, so i believe this is destined to become yet another over due loan.

I have drastically changed my strategy over the last few months from fairly passive to aggressively selling loan parts very early. Despite this returns have continued to diminish. Some loan parts in possession are now approaching 500 days over due with little end in sight. While some loan difficulties are understandable, i.e legal process such probate where Lendy has zero control for a protracted period. There are other loan parts that have promised resolution by the end of the month, month after month with no action. I also have concerns that several huge loans (plus £10 mil) have gone live with Lendy in the last couple of months, given the recent administration of Collateral UK , with an £8.5 million loan being a possible contributing factor, this makes me a little nervous. While i’m not suggesting such a drastic outcome for Lendy given their much bigger investor base and larger cash reserves, it is still increasing risk to a larger number of investors and if the loans were to fail the shock waves could very worrying.

Lendy has also announced that it will be Cowes Week title sponsor again this year, personally i’m ambivalent about this as i didn’t really witness much of uptake of new investors after last years sponsorship, but i have a very small window in to the platform. Lendy has also introduced an improved friend referral scheme. A referral through a unique link (as i use on this blog) now results in a 5% (up from 1%) share of the new friends account interest for the first 12 months, based on £1000 minimum deposit, plus a £50 bonus for both the introducer and the new customer, based on £1000 being invested for 3 months consecutively. This potentially now makes Lendy’s referral scheme one of the most generous on the market.

As for Lendy’s future within my portfolio, i have already taken steps to reduce my liability and will continue to reduce to a predetermined level when i am able to. I would need to see some serious action and repayment of the problematic loan parts over the next 6 months to consider Lendy having a long term future with-in my portfolio.

Collateral UK announces administration.

The UK based P2P lender Collateral UK announced today (28/02/2018) it has formally entered administration. The platform was taken offline on Monday 26th of February 2018 with nothing more than a ‘server upgrade’ landing page in it’s place. As speculation grew on forums over the next few days, from the plausible to out right ridiculous, as to the cause of this suspension in trading, a letter from the administrator was finally released late this evening.

The administrators letter cites the reason for the administration as ‘ The Company was operating in the belief that it was authorised and regulated by the Financial Conduct Authority under interim permission. It has transpired that this is not the case and consequently the Company has ceased lending ‘.

It is still very early stages in proceedings but it would appear invested capital will be secured and wound down in an orderly manner. However it is yet been clarified what will happen to cash on account, what will happen to investments not yet drawn down, what will happen to this months interest due tomorrow morning and if or when the platform will go back online. If the platform does not go back live, many investors maybe left scratching their heads in obtaining exact and up to date figures of what they have on the platform. This could cause difficulties with capital claims or tax filling.

Emotions are still raw at this time and it would unwise to speculate further on how this situation came about in the first place. Undoubtedly more will be revealed over the coming days and i will update accordingly. However some comfort should be taken from the fact this is by no means the worst case scenario, if played out as purported investor losses should be minimal if any.

This is exactly why all investments carry risk.

Collateral UK – An Introduction


Collateral UK was incorporated in 2014 to offer a peer-to-peer platform to investors interested in investing in the UK property market. It specialises in short-term asset backed bridging loans. Usually but not always the investment opportunities are based around purchasing new build properties from the developer, with investments repaid when a customer or tenant is found for the property. Typical terms are 90 to 180 days. The advertised ROI is 12% but this can vary across specific loan requests. Collateral UK also offer a secondary market allowing investors the opportunity to exit early if they feel the need to.

There is no minimum deposit or minimum investment on the Collateral UK platform. This platform only currently accepts bank transfers, it does not accept card payments.

Available Loans Page

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Image shows Collateral UK loan request page (with the property identity column removed).

The top row of the table (below the title row) shows the grand totals for all currently available loans. There are more rows on the platform than shown in this image so the totals look inaccurate but they are not.


Asset Value – shows the market value of the property requesting the loan.

Loan – is the value of the loan being requested on the assigned property.

% PA – displays the percentage ROI offered for each loan request.

LTV – shows the loan to value against the market value of the property. Collateral UK offer up to a maximum of 70% LTV against any property.

Available – is the current value of loan available for investment. If a loan is fully funded it is removed from this table until value becomes available again though an investor selling their loan part on the secondary market place.

Invested – Shows how much you currently have invested in to each loan request.

Remaining – displays the remaining time left on the loan term before expected repayment, in days.

Funded loans page

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The image shows the Loans Funded Page for Collateral UK (with the loan identity column removed).


Age – the number of days you have been invested in each loan request.

Amount – shows how much you currently have invested in each loan request.

Start – is the date you invested in the loan request.

LTV – shows the loan to value against the market value of the property. Collateral UK offer up to a maximum of 70% LTV against any property.

Remaining – displays the remaining time left on the loan term before expected repayment, in days.

Interest – shows how much interest has been accrued for each loan request to date. Interest is paid to the platform account at the end of each month.

Sell – is the option to sell the loan part on the secondary market.

Renew – sometimes a borrower may request a loan extension or a loan renewal. This option allows your investment to be automatically rolled over to the new loan request.

Landbay – An Introduction


Landbay is a peer-to-peer lending platform specialising in the UK buy to let property mortgage market. Landbay was established in 2013 in response to the resilience in the UK buy to let market thought the 2008 downturn despite property values dropping by 17%. Landbay is partnered with Zoopla (the UK’s biggest estate agent) so is considered to be well backed and relatively safe.

Investments on this platform are initially queued to await assignment to a suitable investment. However interest is paid on deposits (this has currently been suspended as of April 2017 due to excessive demand) even while in the investment que. Loan terms can be for as longs as 10 years on this platform.

Landbay’s minimum account deposit is £100 which can be invested in one of two options. Land Bay also operates a secondary market for an early investor exit option. You are also able to ‘Auto Invest’ interest earned to maximise returns.

The options LandBay currently offer

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Investment options available on the LandBay platform.

Options are either a fixed rate of 3.69% ROI fixed for 5 years. Or at a tracker rate of 3.00% (plus LIBOR) ROI (Correct of April 2017).


The LandBay account dashboard

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The Landbay account dashboard

The dashboard is very simple for Landbay –

Cash balance – shows any funds on the platform that are not currently invested or queued for investment. You are free to withdraw any funds at any time in the cash balance.

Invested funds – this shows all your invested funds assigned to loan parts. It also shows funds that are queued and awaiting assignment to loan parts. There is currently an estimated 2 month waiting list for loan assignment (correct as of April 2017) due to excessive demand.

Lifetime Interest – shows the total earned interest over the life of the account. This is also where you can access your statements.

With investments still queued for investment information on this platform will remain sparse, but more information will be added once the investments become active.



Funding Circle – An Introduction


Funding Circle is a peer-to-peer lending platform, who established its UK operations in 2010, although it operates in 4 countries worldwide. The Funding Circle platform offers finance exclusively (as of spring 2017 Funding Circle dose not cater for property ) to businesses for growth and expansion, working capital loans or commercial development.

Funding Circle has an advertised average return of 6.5% ROI after bad debts and charges. This platform also operates a secondary market allowing investors to sell loan parts before term if an investor feels they need an early exit. Secondary loan part sales are subject to buyers being available in the market at the time, so this offers no guarantees of succesful loan part sales when an investor may need them. As of autumn 2017 you can no longer manually choose which loans to invest in, you can either invest in a ‘balanced’ (7.5% projected return) portfolio, of a ‘conservative’ (4.8% projected return) portfolio which the platform will then auto diversifies your funds accordingly. You can still sell part or all of your investment based on secondary market demand.

The minimum account deposit for Funding Circle is £100, with a minimum loan part set at £20. Loan terms are usually between 6 months and 5 years. The platform charges investors in two areas, a 1% (of the loan part value) annual service charge and a 0.25% transaction charge when selling loan parts on the secondary market.

The summary account page.

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Image shows the Funding Circle account summary page.

This is what the main account summary page looks like for Funding Circle. It’s very straight forward to understand. The top left box shows your totals in percentages –

Gross yield – refers to your average maximum advertised return across all your current invested loan parts.

Annualised Return – this is your actual annual ROI on all current invested loan parts added to your completed investments in the financial year. The figure also subtracts Funding Circle transaction fees and bad debts incurred.

Estimated fully diversified return – this is your estimated return over all current loan part investments, subtracting Funding Circle transaction fees and bad debts.

The bottom left box shows your all time earnings summary –

Earnings – shows your total paid (interest is only paid the same day each month you first invest in the loan part) return over the life time of the account (note: this is a grand total and is not broken down in to tax years, you will need to either work that out yourself when it comes time to pay your taxes, or a separate tax statement is available to account holders). Earnings are broken down in to four categories, interest, loan part sales, loan part purchases and promotions. These can been seen by clicking the ‘blue plus’ button next to ‘earnings’.

Fees – are Funding Circle’s annual service charge incurred. The service charge is set at 1% of the value of the loan part calculated over an annual term. In addition Funding circle also charge a transaction fee of 0.25% of the loan part value when selling loans on the secondary market.

Losses – show any bad debts you may have occurred. Losses are also broken down in to bad debts minus recoveries of the bad debt, this can be seen by clicking the ‘blue plus’ button next to ‘losses’.

Net earnings – is the sum of your earnings minus fees and losses.

The box on the right of the screen shows your funds summary –

Funding Circle total – is you total account balance on the Funding Circle platform. This includes any loan parts you are invested in as well as any balance you currently do not have invested in any loan parts.

Accrued interest – is any interest gained by your investments that has not yet been paid in to your account balance (accrued interest can not be withdrawn from the platform until it is paid at the end of the month).

The pie chart– is made up of 3 components; the blue section shows any funds put to a loan part but not yet accepted by the borrower; the green shows any funds accepted and is actively attributed to loan parts. There is also a grey section showing any funds on the account platform that are ‘idle’ or unassigned, this includes interest paid at the end of each month.