Funding Secure – 12 Month Results

12 month results

The first full year results for lending through Funding Secure are as follows –

Expected ROI (Annualised) 12.00%
Actual ROI (Annualised) 3.08%

The ‘Expected ROI’ figure is taken from the average headline figure across each of the loan parts held over the last 12 months. The ‘Actual ROI’ has come in significantly lower at 3.08%. Now the first thing to say is any platform that offers 12.00 – 16.00% potential returns is inherently high risk as the borrower would paying an interest rate of 20.00 – 30.00%. Part of the reason the return figure is so low is because I’ve chosen to withdraw most of the repayments given a slightly skewed figure based on remaining problematic loans. That said approximately 50.00% of the loans I lent against are gone overdue some of these are in default with little prospect for recovery. Most of the income has been generated by selling the loan parts early at a discount which has also applied downward pressure on returns.

Funding Secure boasts total lending of in excess of £290,000,000 up to the end of these 12 months, with active investors (which it calls members) in excess of of 5000.

Conclusion

So although it looks bad I’m still refining my approach to lending with Funding Secure and I think an improved strategy could deliver  more worthwhile returns. For now Funding Secure will remain active in my portfolio in measured way while I continue to experiment, but i’m under no illusions it will be one the highest risk platforms in my portfolio.

Funding Circle – 18 Month Results

18 Month Results

The results for lending through Funding Circle over the past 18 months are as follows –

Expected ROI (Annualised) 7.20%
Actual ROI (Annualised) 8.23%

The ‘Expected ROI’ is taken from Funding Circles own marketing material. The ‘Actual ROI’ has come in significantly higher. The ‘Expected’ figure takes into account a predicted level of defaults, I only had one loan part in the 18 months ‘downgraded’. This meant the loan part in question issued a warning of possible problems with repayments, despite this the loan part still made and is continuing to make repayments, so I think I have lucky with my account performing above average, which explains why I’m currently running over 1.00% above Funding Circles own predictions. This of course is likely to change as loan holdings mature and the likelihood of missed repayments increases.

The other big news for Funding Circle in this 6 month period since the last results, is the conformation of it’s IPO. Due to launch in October 2018 this IPO is highly anticipated as being the first P2P company to IPO in the UK. Other IPOs for P2P companies have previously taken place on the other side of the pond with concerning results. Lending Club IPOd in 2014 with it’s share price dropping 30% within weeks, in now trades (09/2018) at a huge 85.00% discount on IPO price. A similar pattern is being expected by many financial analyst for Funding Circle.

Conclusion

Funding Circle is doing more than enough in both terms ‘Actual Returns’ and future prospects of continued returns to maintain its position as an integral part of my portfolio.

Referral Link For Funding Circle

This link provides a referral bonus of £100 Amazon gift card when a new customer signs up and invests £2000 for a full calendar month using the link (T&C’s apply). The bonus is split £50 gift card to the new customer and £50 gift card to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Unbolted – 6 Month Results

6 Month Results

The first half year results for lending through the Unbolted platform are as follows  –

Expected ROI (Annualised) 7.20%
Actual ROI (Annualised) 8.90%

The ‘Expected ROI’ is taken from the Unbolted website. The ‘Actual ROI’ at 8.90% is obviously significantly higher than expected. This is for one main reason the ‘Expected’ takes in to account a sensible level of defaults whereas the ‘Actual’ is taken from the ‘Interest Earned and Accrued’ figure in the account. Now some people factor in a predicted default rate in to a portfolio, I’m not personally a fan of this technique as a requires a crystal ball and it can quickly become very confusing and complicated subtracting and then later adding figures to a rolling portfolio. So I view the Unbolted figure with a certain degree of reduced expectation.

Unbolted chooses not to publish up to date statistics so it’s difficult to know how the loan book is doing in terms of growth, but with a £5.00 minimum loan part allowing for easy diversification I’ve had no problems with new funds being assigned (with-in a few days) over the last 6 months. A note of caution though, Unbolted has a very narrow borrower clientele, indeed many of the loans are provided against chatel to a single action house. So the true diversification level can be a little opaque with Unbolted, something to consider when working out your own risk appetite.

Conclusion

I’m happy with my Unbolted experience so far. Unbolted seems to run a tight ship with decent quality loans following a rigorous due diligence process. Although no defaults have been realised in my first 6 months I do expect this to change over the coming months as defaults are always to be expected when lending.

We Lend Us – 6 Month Results

6 Month Results

The first results for the first 6 months of lending through the We Lend Us platform are as follows –

Expected ROI (Annualised) 12.00%
Actual ROI (Annualised) 6.70%

It’s not been a bad start to my lending journey with We Lend Us. The expected ROI is the average of my lending setting for my required return. The actual ROI might not look too good in comparison but in this time I adjusted my portfolio allocation meaning I lost one months provision fund (PF) payment on the balance. Had i not made the adjustment the ROI would have been c.8.00%. What i did find a little frustrating was there was no reference to this loss of PF payment as a result of such amendments on the site (at least at the time), I also emailed to query this lost payment at the time and received no response. As I direct result I allocated funds elsewhere in the following few months.

My We Lend Us return is on track to grow to double digits for the full year and could prove to be one of the strongest performers with-in my portfolio. When i started with We Lend Us their entire loan book totaled £32,000, by the end of month 6 this had grown to c£700,000. We Lend Us made an announcement recently that the Provision Fund Purchase Delay would be set to 35 days as of mid January 2019 for everybody, this is significantly more than my current setting and I await the impact this move will have on returns over the coming months.

So in conclusion, despite the minor communication issue I am still relatively happy with We Lend Us and look forward to future growth in 2019.

Growth Street – An Introduction

Introduction

Growth Street Exchange Limited (full name) is a UK based, business focused P2P lender launched in 2015. The minimum deposit and minimum loan part for Growth Street is £10, made via bank transfer only. Current advertised annual return is 5.3%.

How Growth Street works is interesting, once a deposit has cleared you place an order on the market for the deposit to be assigned to a loan (Growth Street is ‘black box’ in nature so it chose the loans for you although you can view more detail on a loan once it’s been assigned) . All loans however are on one month rolling contracts. This means your deposit plus interest is redeposited back to your account balance at the end of the month, to be re-instructed for lending on new loan. This effectively means a total account closure/withdrawal could be performed in as little as a one month. This potentially makes Growth Street one of the most liquid P2P offerings on the market to date. Worth noting this is excluding the effects of defaults, which would be ‘unsellable’.

Growth Street does not offer a secondary market place so you are tied in for at least the month of the contract.

Growth Street Summary Page

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Summary Page for Growth Street

Money On Loan – shows the total balance currently assigned to loans.

Money On Market – shows the any open orders awaiting loan part assignment.

Holding Account Balance – shows any funds not yet on loan or queued for lending, with a minimum loan part of £10, cash drag is a factor with Growth Street. These holding balance funds can be withdrawn at anytime.

Current Interest Accrued (Unpaid) – is the outstanding interest on live loan part that should be expected with-in the next four weeks.

Interest paid to date – is the total interest paid on the deposited balance excluding accrued interest.

To perform a total account withdrawal you will first need to turn off the ‘Reinvestment’ instruction, accessible from the top right dropdown menu on the main website.

Money Thing – 6 Month Results

6 Month Results

The first 6 months results of investing through the Money Thing platform are as follows –

Expected ROI 12.00%
Actual ROI 8.22%

I have calculated the ‘Expected ROI’ for this platform as an average between the stated rate of return, ’10-18%’ average being 14% and I have factored in the frequency of these returns level offerings, there is currently (1/09/2018) only one  18% offering out of 100 live loans so I have revised the average down to 12% accordingly.

As you can see the ‘Actual ROI’ is currently 8.22%. One of my loan holdings became ‘Non Performing’ in this period meaning the loan is either not paying interest as expected or at all . Cash drag is a factor too, a minimum of £1 buy in’s means you pretty much always have residual pennies on account, coupled with a relatively slow new loan generation (currently one about every 10 days), I’m actually quite happy with current ROI. There have been no other major platform developments to report at this time.

Conclusion

I have no reason to consider dropping Money Thing from my portfolio at this time, in fact based on ROI it’s currently one of my strongest performers. Loan generation could be quicker but at least they are assessing loan applications with adequate time and thoroughness.

We Lend Us – An Introduction

Introduction

We Lend Us specialises in short term, unsecured personal loans. Some may call it a payday loan company but unfortunately these days that term is so toxic it might not be helpful describing them in that way (but thats essentially what they do). The difference with We Lend Us is they utilise P2P investment and provide a potential return.

We Lend Us are fully regulated by the FCA through parent company PTP Funding Limited. We Lend Us only launched at the end of 2017 so its a very new company. They performed a number of successful Seeders campaigns pre-launch to fund the business venture. They are also a member of Level 39, Europes biggest Fintech accelerator. Unfortunately We Lend Us are so new there are no full year financials as of yet. Advertised rates of return vary from 5-15% based on risk appetite. Loans are borrowed to £500 maximum, with a repayment time of 1-3 months, however interest can be as high as 250% APR. This may be a lower rate than many competitors in the same space, but it’s still a very high cost of borrowing.

We Lend Us works in two stages, firstly you have to set how you want your deposit to be lent out. Clicking the modify button shown on the page below will open the ‘Investment Criteria’ window. The Auto-Mach setting will allow you to choose loans between 5-15% return, the higher the return the higher the risk. The Auto-Diversify setting allows you to stipulate the maximum (minimum being £10) you want to invest in a single loan, forcing funds to be diversified across multiple loans, potentially reducing risk of losses. The third setting is the Provision Fund setting, allowing you to define your tolerance of a late payment, from 7-30 days before We Lend Us step in and utilise the provision fund to reimburse the invested principle. Any expected interest is defaulted in this instance. (see below for more detail on the provision fund).

You can also assign any unassigned moneys to an investment fund. One quirk with We Lend Us is you can actually set up multiple funds based on different criteria with in the same account.  So once you have all the settings decided you click save and move on to the second part of the process, essentially sitting back and waiting for your funds to be assigned and start earning you a return. If you make a further deposit in to you account you will have to manually assign it to which ever fund and criteria you want to lend through.

Manage Investments page

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We Lend Us investment page 

The main page for We Lend Us is the Investment page and it’s as basic as it gets –

Balance – shows the total amount of monies on the We Lend Us Platform.

Total Earned – shows interest earned from successfully resolved loans.

Queued – any monies assigned to a fund but awaiting a loan.

Lent Out – shows the total of funds currently on loan.

Investment Portfolio –  summarises the chosen settings for the investment fund (the settings displayed on this example should not be viewed as a personal recommendation of what you should set your fund to for desired results. It is up to you to play around with settings and find what works for you).

Withdrawal History – shows any withdrawals made from the platform.

The Provision Fund

We Lend Us do operate a provision fund which as explained earlier with reimburse the invested principle when a loan passes your defined late payment tolerance period. Now in normal conditions any interest on that loan part would not be reimbursed to the lender, however We Lend Us are currently using a short term month by month rolling promotion while in soft launch which does in fact reimburse the otherwise forfeited interest. But it should be assumed that this will not last for ever. So the example shown is a £100 deposit but the further £1.37 is actually the reimbursement via the promotion which is why its not shown as earnings (this is highlighted on a further page on the platform, but the rest of the information is identical to what is show in the example).