tag:blogger.com,1999:blog-42013272175688207292024-02-29T07:25:51.373+00:00UK Peer to Peer Lending GuideThe UK Peer to Peer Lending Guide is a blog for ordinary people, rather than financial experts. In a nutshell, all you every wanted to know about P2P Lending but were afraid to ask!
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.comBlogger30125tag:blogger.com,1999:blog-4201327217568820729.post-21220491663060064372016-03-27T15:01:00.001+01:002016-05-09T23:57:11.943+01:00UK Peer to Peer Lending (PtPL) – Identifying and Managing Risk by Assessing Platform Health<div class="separator" style="clear: both; text-align: center;">
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<a href="http://prending.blogspot.co.uk/2016/03/uk-peer-to-peer-lending-ptpl.html" target="_blank">In my previous post</a>, I outlined some of the factors
leading to PtPL losses. In this post
I’ll look specifically at the risks associated with individual PtP platforms. By the way, don’t believe the likes of Lord
Adair Turner with his ‘Peer to Peer is Doomed’ nonsense. Lord Turner has significant interest in a
traditional business loans company hence his (biased) condemnation of Peer to
Peer Lending!<o:p></o:p></div>
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I’ll ignore the big three; Zopa, Ratesetter and Funding
Circle as their returns are relatively low (typically 4% - 7%) and the first
two have provision funds to (hopefully) cover any losses. The sites I favour pay 12% or more but with
this comes obvious increased risk.
Typical examples are Saving Stream, Funding Secure and Money Thing. <o:p></o:p></div>
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These platforms offer all their loans secured against
material assets such as land, property, cars, boats, planes and works of
art. Incidentally, this is a much better deal
than Funding Circle, where most of the loans are unsecured and the buyer must therefore factor in defaults with limited or no recovery of capital or remaining
interest. <o:p></o:p></div>
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Here are two key ways to evaluate these platforms:</div>
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<b><span style="color: #3d85c6;">Number ONE: Look at the state of the Secondary Market</span></b></h3>
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These three platforms each have a secondary market where you
can buy and sell loans held by other people rather than buying new loans. But why would you want to do that, I hear you
ask? Well, you may wish to buy additional
loans in order to diversify, ie spread your cash across more loans rather than
waiting for new loans to appear.
Alternatively you may want to suddenly withdraw some cash rather than
waiting until the end of a loan. <o:p></o:p></div>
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So what to look for?
After Christmas 2015 there was a UK PtP loan famine. In other words there was nothing available on
the secondary markets. This is good news
if you are selling loans but frustrating if you want to buy. Now (late March) there is something of a
glut. The three platforms I mentioned
all have loans to buy on the secondary market.
<o:p></o:p></div>
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What to look out for is platforms with too much on offer on
the secondary market or worse still new
loans that are not fully funded. If the
platform offers the ability for sellers to off load unwanted loans at a discount, then are
there a lot loans offered at a discount that are still not selling? This may suggest that lenders are keen to
offload existing loans even at a loss.
You then need to find out why they may be unhappy with the platform. This brings me neatly to the second point. <o:p></o:p></div>
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<span style="color: #3d85c6;">Number TWO: Read <a href="http://p2pindependentforum.com/" target="_blank">the PtP Independent Forum</a> </span></h3>
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The forum is UK-based but is also frequented by lenders in
mainland Europe. The financial expertise on this forum is amazing. Find out what
experienced lenders think of each platform and the quality of loans being
offered. Do others share your concern
about a particular platform? Use the forum
to find out the default record of individual platforms and how often the
capital and unpaid interest were eventually recovered.<o:p></o:p></div>
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Finally, as long as you keep well informed and don’t lend
what you can’t afford to loose, I think you'll find PtPL is a much safer bet than
playing the stock market roulette!<br />
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<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-14839267574251978132016-03-05T17:48:00.002+00:002016-03-05T18:38:10.174+00:00UK Peer to Peer Lending (PtPL) – Identifying and Managing Risk and Tips to Avoid Losses<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0quWlcaI8UzSaAfDxT1znEvOE22qgO2imoIScITeqqW11Ko4lEwTGnjZn6QwJYdsY8PNjNyaGIvLj5e2-1Sc6XYtNND6ScQ2sDdFXcPCe71OVqozqZMxNH4nTDk2ut3u8epruoN9rBVZe/s1600/risk.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0quWlcaI8UzSaAfDxT1znEvOE22qgO2imoIScITeqqW11Ko4lEwTGnjZn6QwJYdsY8PNjNyaGIvLj5e2-1Sc6XYtNND6ScQ2sDdFXcPCe71OVqozqZMxNH4nTDk2ut3u8epruoN9rBVZe/s320/risk.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="color: #3d85c6;">Evaluating Financial Risk</span></td></tr>
</tbody></table>
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<span style="color: #3d85c6;">Provision Funds</span></h3>
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<o:p></o:p></div>
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Platforms such as Ratesetter and Zopa include a provision
fund to cover any expected defaults.
This is one reason why the rates of interest offered are relatively
low. The best interest on offer is
between5% and 6% with Ratesetter if you are prepared to lend your money for 5
years.</div>
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<o:p></o:p></div>
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This post will focus on platforms with no provision fund
where defaults may directly affect the returns available to the lender. <o:p></o:p><br />
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<span style="color: #3d85c6;">Unsecured Loans</span></h3>
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<o:p></o:p></div>
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Funding Circle (FC) provide an estimate of the percentage
loans expected to default, based on historical data for each class of
loan. However, their loans are typically
for small businesses and the failure rate, in my experience, may be higher than
the FC prediction and recovery rates are relatively small because the majority
of their loans are unsecured (ie not underwritten by a tangible asset such as
property or land).</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZgzSiSs-7YrVwKyENIubGfxJjnviu1uPbC0MWMuHnp8K_mOPDunI7uF6D0POINRyW2pYCE8B27txbZxcDE3UGheuggTkoCvIa_9JEAEJAsW26KcfXVZiV8lHKR2izh4cmQ_AtJwBCYVnA/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZgzSiSs-7YrVwKyENIubGfxJjnviu1uPbC0MWMuHnp8K_mOPDunI7uF6D0POINRyW2pYCE8B27txbZxcDE3UGheuggTkoCvIa_9JEAEJAsW26KcfXVZiV8lHKR2izh4cmQ_AtJwBCYVnA/s1600/Saving+Stream+Logo.png" /></a></div>
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<span style="color: #3d85c6;">Secured Loans at 12%</span></h3>
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I now avoid unsecured loans and prefer platforms such as
Saving Stream and Money Thing. Saving
Stream loans are almost exclusively secured against property and land while
Money Thing has a broader mix of assets that also include artworks and
portfolios of goods such as electronics or jewellery. Surprisingly these sites both offer annual interest of around 12% with no fees charged to the lender. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq4xg_JSyFOgAEoWHbvUEBTwNzSRK7DrcS56egNWNaHCHdEA-AzejYYyfZEvJmHLuuT84x6XPckAf7QqdDT3x9PLD44-JoJshxf_q5FAeVQHwjlJeVXULYsb5EnEc7nIw6Et480KHYw7UB/s1600/zU6rw4QV_400x400.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq4xg_JSyFOgAEoWHbvUEBTwNzSRK7DrcS56egNWNaHCHdEA-AzejYYyfZEvJmHLuuT84x6XPckAf7QqdDT3x9PLD44-JoJshxf_q5FAeVQHwjlJeVXULYsb5EnEc7nIw6Et480KHYw7UB/s200/zU6rw4QV_400x400.jpeg" width="200" /></a></div>
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<span style="background-color: white;"><span style="color: #3d85c6;">Minimising Losses</span></span></h3>
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My tip to minimise losses is to spread your money across as
many loans as possible. Another tip is
to further diversify by lending through several PtPL platforms. You should also assess the risk associated
with individual loans. For example, if
property is to be developed, is the business case for the loan realistic based
on current market conditions?<br />
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<span style="color: #3d85c6;">Accuracy of Valuation</span></h3>
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Something important to consider is the accuracy of the
valuation of the asset. Platforms
usually quote the Loan To Value (of the asset), abbreviated to LTV, as a
percentage. So, for example, a loan for £100,000
secured by an asset worth £200,000 would have an LTV of 50%. The lower the LTV the less likely you are to
lose money due to a default coupled with a poor valuation. </div>
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Beware works of art where the estimated value may be
optimistic depending on the state of the market and current fashions. In the case of a default, the actual value of
the asset must cover money owed to the platform, the lenders capital and
interest as well as selling costs, legal fees, transport costs etc.<br />
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<span style="color: #3d85c6;">Evaluating PtPL Platforms</span></h3>
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<b>In my next post I’ll explore how we can evaluate the risk in individual PtPL
platforms and identify how likely they are to have loans that default where the capital or interest owed are not fully recovered.</b><br />
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<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-605257673641930202016-03-01T16:22:00.000+00:002016-03-04T17:57:25.959+00:00How to DO Peer to Peer Lending (PtPL) – Part 2<h3 style="clear: both; text-align: left;">
<span style="color: #3d85c6;">Practical Peer to Peer lending Advice</span></h3>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6kWqq6PxU6RifT1pvRTKE3XeiVOv-akEtGX0DDFaUdlGBzGe0KoCwsT0pffjfXojCXxfuW6uzaCzmYrcDo8QTXUDSbV0d71im7HvhmDblTihAzigWfDxnWwbKBj7eLKnNParccnJtcB7x/s1600/interest+coins.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6kWqq6PxU6RifT1pvRTKE3XeiVOv-akEtGX0DDFaUdlGBzGe0KoCwsT0pffjfXojCXxfuW6uzaCzmYrcDo8QTXUDSbV0d71im7HvhmDblTihAzigWfDxnWwbKBj7eLKnNParccnJtcB7x/s320/interest+coins.jpg" width="320" /></a></div>
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In my <a href="http://prending.blogspot.co.uk/2016/02/how-to-actually-do-peer-to-peer-lending.html" target="_blank"><span style="font-size: large;">previous post</span></a> I gave tips on how to try PtPL
with minimum risk. I covered platforms
such as Ratesetter (RS) and Funding Circle (FC). In this post I shall look at Asset-based
Lending on platforms such as Saving Stream (SS), Money Thing (MT) and Funding
Secure (FS). These offer far higher
rates of interest with some (manageable) risk as well as making it relatively easy to
get your capital back quickly via a Secondary Market.<o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSxnGzZ09S4aQ8uZatld1VJ3v6t2lMxbaFNnU5-1-dmtBpBUbPSZKN8P4jUUkWhY9nUZaecnPKVHBX-pVpvuW3MGbp5LQ4JVrpP6aqAXarGaVGaAZ4ZPKlYIOvduY9La4Ps48JIAs0mdN/s1600/RateSetter-Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSxnGzZ09S4aQ8uZatld1VJ3v6t2lMxbaFNnU5-1-dmtBpBUbPSZKN8P4jUUkWhY9nUZaecnPKVHBX-pVpvuW3MGbp5LQ4JVrpP6aqAXarGaVGaAZ4ZPKlYIOvduY9La4Ps48JIAs0mdN/s200/RateSetter-Logo.png" width="200" /></a></div>
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These 3 asset-based PtPL sites reduce risk by securing each
loan against a tangible asset such as property, art works, land, cars, planes
or industrial machinery. In the event of
a default, the asset can be sold by the platform and the proceeds used to pay
back the lenders. The main risks are therefore
platform failure or the asset valuation being too low.<o:p></o:p></div>
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These sites typically offer shorter loan terms than sites
like Ratesetter. Ratesetter’s best rate
is over a term of 5 years and pays typically 5-6%. <o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" /></a></div>
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Saving Stream pays 12% for a bridging loan of typically 12
months. In practice these loans may be
redeemed earlier or continue for longer depending on progress of the development
work required before the land or property is sold. <o:p></o:p></div>
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In the current market, you can immediately sell loans
without loss on the Saving Stream secondary market. It is also worth noting that SS, MT and FS
don’t charge any fees to lenders for buying or selling loans. <o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA79GrpOGffXFKPz_BOBHO6BOMaOdTCps4qhQxXypd9fnx-JbScPr6eQqLP-Q1zlhQUlt_RwleW1BBFbQSJGTITad7cZF2Wo3m_kYqmkM5t5NxiHiUjmAUWDQ76AMQlzewYH7vB5BpE5D9/s1600/Ablrate-Logo_drop_white-1024x237.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="74" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA79GrpOGffXFKPz_BOBHO6BOMaOdTCps4qhQxXypd9fnx-JbScPr6eQqLP-Q1zlhQUlt_RwleW1BBFbQSJGTITad7cZF2Wo3m_kYqmkM5t5NxiHiUjmAUWDQ76AMQlzewYH7vB5BpE5D9/s320/Ablrate-Logo_drop_white-1024x237.png" width="320" /></a></div>
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While Saving Stream originally lent against boats, they now
specialise in property and land. Money
Thing and Funding Secure offer a wider range of assets including cars and
artworks. More specialised sites, such
as Ablrate, lend against aircraft, industrial plant and shipping containers
with rates from around 10-14%. <o:p></o:p></div>
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It is obviously wise to spread your money across loans,
asset types and platforms. This
minimises the risk of asset value collapse, platform failure or individual loan
defaults.<o:p></o:p></div>
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Secondary markets are a useful means of further
diversification for your existing loans and a channel to reinvest returned
interest and capital on shorter term loans.<o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiscGSfqevPMwT1j79IRekoSST6OCbS-NbDbqfpNTQoV7YzwEZb1j12a3Et2EHiV_UC0Vu0vjqCmmB-QXCHT6x-2OmaBO92xyPsv8OL1cVAMVkw5olksSv6VvlBCr8BiEdeWFytFxuYW9Jd/s1600/zopa.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiscGSfqevPMwT1j79IRekoSST6OCbS-NbDbqfpNTQoV7YzwEZb1j12a3Et2EHiV_UC0Vu0vjqCmmB-QXCHT6x-2OmaBO92xyPsv8OL1cVAMVkw5olksSv6VvlBCr8BiEdeWFytFxuYW9Jd/s1600/zopa.png" /></a></div>
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If you work full time then be aware that sites like Zopa and
Ratesetter are relatively ‘hands off’ while the asset-based sites require more
‘hands on’ management. You may also wish
to look at the details of the individual asset-based loans, for example
valuation reports, to make sure you are comfortable with the stated purpose of
the loan.<o:p></o:p></div>
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So, finally, do give PtPL a shot. Start with small amounts across several
platforms and see how you get on. But
remember, don’t ever invest more than you can afford to lose. Having said that, I think that you’ll find
that PtPL is much less of a lottery than the stock market! <o:p></o:p></div>
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Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-62364457708232545222016-02-07T15:10:00.000+00:002016-02-07T20:24:20.717+00:00How to actually DO Peer to Peer Lending – in a nutshell, PRACTICAL PtPL<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0G3NOMqt4gFmzqcY5wbto_-bZTVknB-U7-SvD0LU892BBjcv571BZolRcXMo1UgjrqBdlr_JX-NWYk-f1trO-ulcQuerN-oHRsz9g9uufm3wfQ2rWMRsA4J8_5ErPEWWe7HCfW2S2mlg-/s1600/8027644078_24d7f1d0c3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0G3NOMqt4gFmzqcY5wbto_-bZTVknB-U7-SvD0LU892BBjcv571BZolRcXMo1UgjrqBdlr_JX-NWYk-f1trO-ulcQuerN-oHRsz9g9uufm3wfQ2rWMRsA4J8_5ErPEWWe7HCfW2S2mlg-/s320/8027644078_24d7f1d0c3.jpg" width="320" /></a></div>
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<span style="color: #3d85c6;"><br /></span></h3>
<h3>
<span style="color: #3d85c6;">Practical not Theory!</span></h3>
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The financial press and social media are increasingly stuffed
to the gills with hype about PtPL but most of it is so superficial. You have probably seen some of the headlines: </div>
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<div class="MsoNormal">
</div>
<ul>
<li>‘PtPL investment increasing by 200% per annum’</li>
<li>‘UK PtP is the fastest growth in PtPL per capita in the
world’ </li>
</ul>
<o:p></o:p><br />
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
But 99% of this stuff is written by people who have never actually
DONE it! They have never signed up to
even the simplest platform such as Zopa or Ratesetter and given it a try.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
They therefore don’t really know what they are talking
about. Hopefully you have arrived here
because you are an ordinary investor and you want to dip your toe in the water
and actually have a go at PtPL. Please
note that this post relates specifically to the UK market but the principles are
equally applicable to other countries.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSxnGzZ09S4aQ8uZatld1VJ3v6t2lMxbaFNnU5-1-dmtBpBUbPSZKN8P4jUUkWhY9nUZaecnPKVHBX-pVpvuW3MGbp5LQ4JVrpP6aqAXarGaVGaAZ4ZPKlYIOvduY9La4Ps48JIAs0mdN/s1600/RateSetter-Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSxnGzZ09S4aQ8uZatld1VJ3v6t2lMxbaFNnU5-1-dmtBpBUbPSZKN8P4jUUkWhY9nUZaecnPKVHBX-pVpvuW3MGbp5LQ4JVrpP6aqAXarGaVGaAZ4ZPKlYIOvduY9La4Ps48JIAs0mdN/s200/RateSetter-Logo.png" width="200" /></a></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">STEP 1 </span></h3>
<div class="MsoNormal">
My advice is start with Ratesetter (relatively safe
but uninspiring). It only takes a few
minutes to sign up. It costs
nothing. Invest a small amount (minimum
investment is £10). You can put your cash
in the 5 year market (interest around 6%) or shorter term markets where
interest is less. To start, I would
recommend the monthly market that currently pays 2.8%. </div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Beware the 5 year market as RS has relatively heavy
penalties for early withdrawal. As we
will see later, other sites will offer 12% or more on a 6 month loan. Many sites also have a secondary market so
you can sell your loans instantly without penalty.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Sites like Ratesetter and Zopa lend to individuals rather
than businesses. Defaults are generally
not a problem as they have a provision funds to cover this. Hence the lower rates of interest offered. </div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s1600/FC+logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s320/FC+logo.jpg" width="320" /></a></div>
<div class="MsoNormal">
<o:p></o:p></div>
<h3>
<span style="color: #3d85c6;">STEP 2</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Next, sign up with Funding Circle (FC). Funding circle is more interesting. You bid for specific loans to
businesses. The down side is the risk of
default – there is no provision fund but FC do provide an estimate of default rate, based on loan category
(A+ through to E), based on their own historical data.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Most loans are unsecured so a default means you may lose
some or all of your investment in that loan.
I now only invest in secured property loans on FC and leave the unsecured
loans alone. Loans secured against
property mean you stand a good chance of getting all your cash back (assuming
the valuation is accurate) once the property is sold.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Interest rates on FC have fallen somewhat and the chance to
bid for your own rate has been removed. A+ loans pay around 6.5% (after defaults) while E loans (highest
risk) pay around 9%. </div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Look out for Cashback on some larger A+ property loans. I recently got a tasty 2% on a 6 month loan. However, since the New Year, Cashback flow has
dried up due to both a seasonal loan famine and increasing number of new
borrowers hungry for fresh loans.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Unlike Ratesetter and Zopa, FC has a decent secondary market
so you can normally get your cash out quickly, sometimes at a premium or, if you are desperate,
at a discount. </div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBgB_Q7hzU4nrlw7qc1aHF2ObSVeofVDDmWKWKaFM27wWDJlPMCkeo06yvwQZUnVmtuOvH-pOumqT3y513kpi40LC408WBp3zz0o8PJIGw0VtHq6ptpee9GxvdCXuhlJU4PUAwL-g0MiXf/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBgB_Q7hzU4nrlw7qc1aHF2ObSVeofVDDmWKWKaFM27wWDJlPMCkeo06yvwQZUnVmtuOvH-pOumqT3y513kpi40LC408WBp3zz0o8PJIGw0VtHq6ptpee9GxvdCXuhlJU4PUAwL-g0MiXf/s1600/Saving+Stream+Logo.png" /></a></div>
<div class="MsoNormal">
<o:p></o:p></div>
<h3>
<span style="color: #3d85c6;">STEP 3</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
This is where PtPL gets more interesting (and more
lucrative) via platforms such as Saving Stream, Money Thing and Funding Secure. We are talking here about loans of 12-13% (with
some manageable risk) for terms as short as 6 months (renewable) as well as the
option to sell without loss on the secondary market. Anyway, that's enough for now. I’ll continue step 3 in my next post.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<b><span style="color: #3d85c6; font-size: large;">In the meantime, happy PtP Lending! </span></b><o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-7159856114199109802016-01-28T17:15:00.001+00:002016-02-23T14:04:29.157+00:00UK Peer to Peer Lending – Is it really ‘Too Good to be True?’<div class="MsoNormal">
Many self-proclaimed financial experts say Peer to Peer
lending (PtPL) is flawed and full of risk.
Most of them are directly or indirectly employed by big banks or brokers
and have an interest in maintaining the financial status quo. But then this is no different to the
doom-mongers who have been predicting a stock market crash every month since
the great depression!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Here are some classic arguments:</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3 style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span style="text-indent: -18pt;"> <span style="color: #3d85c6;">No Government Protection</span></span></h3>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
The UK Government underwrites approved bank and building
society SAVINGS via the Financial Services Compensation Scheme (FSCS). This scheme clearly doesn’t extend to
anything with risk whether stocks, shares, funds or peer to peer loans.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, this doesn’t mean that government doesn’t<b> like</b> PtPL. The Government regularly invests 10% in loans
to small/medium UK businesses through platforms such as Funding Circle. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The UK Government is also encouraging PtPL via it’s new
third ISA, known as the Innovative Finance ISA.
There may be no government protection for PtPL but equally there has
never been any state compensation for losses in any global stock market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEig88_YKpaiegMS2VJJcNTkLLzyf04-j7OhP8ihm_enufko8yn1PdDSoTDLeR4kKEuWg7Lu9PhykOaNTahKf1YUDdIgtbnqizZaWhDDlfeACE3YzKxqQceGcv6F4kHc4yBExgIsGRnVMsa8/s1600/risk+of+words.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEig88_YKpaiegMS2VJJcNTkLLzyf04-j7OhP8ihm_enufko8yn1PdDSoTDLeR4kKEuWg7Lu9PhykOaNTahKf1YUDdIgtbnqizZaWhDDlfeACE3YzKxqQceGcv6F4kHc4yBExgIsGRnVMsa8/s200/risk+of+words.jpg" width="150" /></a></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="font-family: "symbol"; text-indent: -18pt;"><span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;"> </span></span><span style="text-indent: -18pt;"><span style="color: #3d85c6;">Too Risky</span></span></h3>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
Risk is relative.
Buying shares or funds is very risky.
I have a pharma fund that gained well over 10% in less than a year but
where am I now? – a loss of around 10%! <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The risks in PtPL are much easier to quantify and you can also
build a mixed portfolio to cover many of the risks. So, for example, on each platform, you should
spread your cash across a relatively large number of loans. If the platform offers loans secured against
a range of assets then mix the assets.
For example, with a platform like Money Thing you can spread the risk
between several asset classes including fine art, railway memorabilia, land,
property or super cars. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In practice, while stocks and shares jump around in an almost
totally unpredictable manner, PtP loans result in a fairly steady and
predictable stream of interest. This makes PtPL an ideal regular income source.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3 style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span style="text-indent: -18pt;"><span style="font-family: "symbol";"> </span><span style="color: #3d85c6;">The Platform Might Fail</span></span></h3>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
Do your own ‘due diligence’.
Check out the company, the backers and what other users think (Why not join the PtP
Independent Forum?). Examine the platform’s
loan supply and their track record in terms of both defaults and recoveries.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhK-4aVBWNHsFiEPNGfIsNtoBOqdo5q8XQvBBPLsY63jN86zmEFPaWR8EmrkfkVvj1YtWc5TY5jmBA_b5FqwzHQewGAsPDr3uGG8LZsGwrpB6nFtOU651eJyThrXOoi0ZXdNK4AMReQzpf/s1600/foreclosure_notice.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhK-4aVBWNHsFiEPNGfIsNtoBOqdo5q8XQvBBPLsY63jN86zmEFPaWR8EmrkfkVvj1YtWc5TY5jmBA_b5FqwzHQewGAsPDr3uGG8LZsGwrpB6nFtOU651eJyThrXOoi0ZXdNK4AMReQzpf/s200/foreclosure_notice.jpg" width="200" /></a></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="font-family: "symbol"; text-indent: -18pt;"><span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;"> </span></span><span style="color: #3d85c6; text-indent: -18pt;">Too Many Defaults</span></h3>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<o:p></o:p></div>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<br /></div>
<div class="MsoNormal">
Lower interest sites like ZOPA or Ratesetter (typically 5-6%
over 5 years) have provision funds to cover defaults. Other platforms such as Funding Circle (FC)
have a projection for defaults that you can include in your own calculations. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For example , the safest FC risk category is A+. This typically pays around 8% interest. FC charge a fee of 1% and estimate a 0.6%
loss due to defaults. The actual net
projected interest in this example is therefore 6.4%.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Other sites, such as Saving Stream, Money Thing, Funding
Secure and Assetz only offer secured loans against assets such as
property. This means that, provided the
valuation is correct, you should eventually get all your money back, in the
case of a default, once the asset is sold.
You can also check the platform track record in terms of defaults to
estimate the risks.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">A Final thought</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
You
don’t need to be a financial expert to do Peer to Peer Lending. What you do need is some common sense and you
should make sure that you never invest money you can’t afford to lose. If I invest say £50,000 in PtP then I clearly
need to make sure that I don’t put £25,000 on a single loan! Ideally I should spread my investment across
several platforms and make sure a good proportion of the total is invested at
relatively low risk. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
Yes Peer to Peer lending may, at first sight, seem too good
to be true but my advice is to give it a try and see how it works out for you
by taking out some trial small loans.
You might be pleasantly surprised. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I would suggest PtPL is far less risky than the stock market and far more rewarding than a savings account, even without the government protection!<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-74370330668818027462016-01-15T14:38:00.000+00:002016-01-16T19:31:36.007+00:00UK Peer to Peer Lending: Saving Stream – ‘Still Very liquid and Continuing to Deliver!’<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">What it Says on the Tin!</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving Stream remains my favourite UK Peer to Peer Lending
(PTPL) platform. It reminds me of the
product Ronseal with the simple slogan ‘Does what it says on the tin’. Please note I have no financial interest in
Saving Stream other than being a satisfied customer.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
Saving Stream continue to deliver high value loans while
keeping their platform simple. They
offer 12% interest across every loan with no fees whatsoever. Also, no lender money has yet been lost due
to defaults. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving Stream (SS) don’t indulge it a lot of chat or debate
with users but do appear to listen. Each
time there has been reasonable complaint, for example, via the P2P Independent
Forum, they have acted in very short time period to modify their platform to
fix the problem.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOr5XGmb1QORFxkseNQn6sUszaXE0NkDeLcwi1pAwxRIPVY7phmrYU3D5GLNa8-rAXURolx83Sjyzj62O9RVdrz34clX9hRcc1gQpM-B7NAa8j14Jp4r3oHDNXcPSdSy2G6FC2iHoTwj_h/s1600/P2P+forum.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOr5XGmb1QORFxkseNQn6sUszaXE0NkDeLcwi1pAwxRIPVY7phmrYU3D5GLNa8-rAXURolx83Sjyzj62O9RVdrz34clX9hRcc1gQpM-B7NAa8j14Jp4r3oHDNXcPSdSy2G6FC2iHoTwj_h/s1600/P2P+forum.png" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Pre-Funding Brilliance </span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As a result they are the only PtPL platform to offer
pre-funding; an arrangement where you can pre-bid for pipeline loans and then
settle up AFTER the bid is accepted. You
can also, at the same time, buy or sell on the secondary market and again
settle up the balance owed at a later date (ideally within 24 hours).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Bad Robots</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
More recently there was annoyance from SS users about
numerous ‘bots’ (the actual number was never agreed!) that snaffled up every
snippet of cash on the secondary market in the blink of a human eye, hence
excluding flesh and blood buyers from competing. <o:p></o:p><br />
<br /></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpXEnZq7ThZbz0U6uspZxlNTX_36oOE0CMsqYJeD36EvLjyWuDJ4dABRspY9i2_ExIZAl33Vuuk186jO_DEdTBs5HNJStVtEo7VUo29LUUHLuf-lWfBx3UypIOYqv2-h-_nSI_fGzVi4IQ/s1600/toy-robots.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="261" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpXEnZq7ThZbz0U6uspZxlNTX_36oOE0CMsqYJeD36EvLjyWuDJ4dABRspY9i2_ExIZAl33Vuuk186jO_DEdTBs5HNJStVtEo7VUo29LUUHLuf-lWfBx3UypIOYqv2-h-_nSI_fGzVi4IQ/s320/toy-robots.jpg" width="320" /></a></div>
<br /></div>
<div class="MsoNormal">
The use of PtP robots, software programs that monitor a Peer
to Peer Platform and operate on behalf of their human owner, are not limited to
Saving Stream alone. Funding Circle was
awash with them, particularly in the days when the platform had variable rate
loans and you could bid for your preferred rate.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Anyway, Saving Stream have now taken measures to greatly
restrict the use of bots including the use of the ‘Captcha’ (software that
differentiates humans from robots).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">First Class Liquidity</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The problem currently facing all platforms is that the
increasing popularity of PtPL means there simply aren't enough big loans to go
round, particularly in the quiet period after Christmas. For this reason Saving Stream hardly ever
have anything available to buy on the secondary market. However, this means that, in the current
climate, you can cash in all your loans in a period of a few minutes, ie total
liquidity. Not bad for 12% interest! <o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-22192105103367582482016-01-08T12:01:00.000+00:002016-01-20T10:28:18.837+00:00UK Peer to Peer Lending - Innovative Finance ISAs (IFISA) and the way ahead<h3>
<span style="color: #3d85c6;">'IFFY' ISAs?</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Some cynics are nicknaming the proposed government IFISA’s
as ‘iffy’ ISAs and, considering that these products are due to launch by 6
April 2016 (only 3 months away), surprisingly little is yet known about them.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The creation of Innovative Finance ISAs is all part of the
UK government’s enthusiasm for alternative finance in general and in particular,
Peer to Peer Lending. This is surprising
as it often seems the Conservatives (the clue is in the name) favour the wealthy,
big banks and other traditional fat-cat financial institutions. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, George Osborne has been a champion of peer to peer
lending for some time (reflected in his budget statements) with the government lending
up to 10% of the cash for selected small businesses loans through platforms
such as Funding Circle.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The IFISA may also eventually include other alternative
finance platforms such as crowd funding but it is assumed by many that this
will come later once the PtPL option has been added to ISAs.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Meanwhile the big banks as well as big brokers such as
H&L have, until recently, shown little enthusiasm for Peer to Peer Lending
(PtPL). (Do a search on their websites
to see what I mean.)<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqXflWQhGFNuZMmnW78zVQo3avsmNqULKMxwxsXcJ02-8UgssDXirtZo5VvWExZ2H2NRjltA-laqurUjXfe2S43LE5AOmGN_48148rCqIDOsovZTHCGHetFAhnurxKXkPg-tgVTK7o7w-L/s1600/Osborne.jpg" imageanchor="1" style="font-size: medium; font-weight: normal; margin-left: auto; margin-right: auto; text-align: center;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqXflWQhGFNuZMmnW78zVQo3avsmNqULKMxwxsXcJ02-8UgssDXirtZo5VvWExZ2H2NRjltA-laqurUjXfe2S43LE5AOmGN_48148rCqIDOsovZTHCGHetFAhnurxKXkPg-tgVTK7o7w-L/s320/Osborne.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">'Boy' George Osborne Loves PtPLending?</td></tr>
</tbody></table>
<h3>
</h3>
<h3>
<span style="color: #3d85c6;">What do we know?</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
So what do we know about the IFISA? Currently you can invest up to £15240 maximum
(tax free) in a cash ISA and/or stocks and shares ISA. Unfortunately both have their problems. Cash ISAs pay almost zero interest and shares
are more likely to go down rather than up in the current financial climate. In April 2016, The IFISA will offer a third
alternative allowing the allowance to be used on PtPL.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">What DON'T we know?</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
So what DON’T we know?
Well, quite a lot! Apparently the
government have not yet finalised the rules for IFISAs, even though their introduction
is only months away!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
We know that the major players such as Zopa, Ratesetter and
Funding circle hope to have their own IFISA wrapper. It also seems likely that other platforms
such as Assetz Capital and Saving Stream
will also move towards the ISA provision.
We also know brokers like H&L also plan to have a wrapper. It is not clear yet what platforms or
products H&L will put in the wrapper and also how much they will charge for
this service.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The general consensus from the informed lenders (the Independent
Peer to Peer Lending Forum) is that the interest available from the IFISA will
be less than that available on the non-ISA product. If, for the sake of argument, an IFISA
offered 5% or less interest, then more experienced PtP lender might well opt for a straight
platform loan with, for example, Saving Stream (12% interest with asset
security) and then pay any tax owed.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Other common PtPL questions include: <o:p></o:p></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Will the new IFISA allowance be limited to just one PtPL platform or broker in a year? <o:p></o:p></b></div>
<br />
<div class="MsoNormal">
<b>Can existing lenders transfer existing PtP loans into an IFISA wrapper?</b><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Watch this space for further ‘iffy’ ISA developments
– Anyway, all these unknowns do make me wonder just how many of these IFISA products will actually be
available to tax payers in April 2016! <span style="color: #3d85c6;"> </span></b><span style="color: #3d85c6;">
</span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-84507163955699618712015-12-24T21:39:00.000+00:002016-04-06T09:53:12.263+01:00My UK Peer to Peer Lending Journey so far..<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>It’s Christmas Eve so
I thought I’d do a quick update on which platforms my Peer to Peer Lending money
currently resides.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjRtIbBprJo5XI0b4DE5V8ofRwHQ66tC30y97BFqwg6WNKLznu9wRq9vq2ophsa5tIkqv1OKsyTpJqNjNKRwM-XihidbOiM8kfcK8cGE8i2sRlzJb4RAaJ89hBHZb5_t3vkZwq2psKbU9c/s1600/Investments+Dec+15.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjRtIbBprJo5XI0b4DE5V8ofRwHQ66tC30y97BFqwg6WNKLznu9wRq9vq2ophsa5tIkqv1OKsyTpJqNjNKRwM-XihidbOiM8kfcK8cGE8i2sRlzJb4RAaJ89hBHZb5_t3vkZwq2psKbU9c/s320/Investments+Dec+15.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Platform Pie Chart Based on Investment</td></tr>
</tbody></table>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>About a year ago, over
50% of my money was in the Ratesetter 5 year market. I’m now pulling my money out as quickly as I
can simply because the interest is relatively low (around 6%). Unfortunately, Ratesetter have penalties for
early withdrawal and no secondary market.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>The Funding Circle (FC) proportion has also reduced because they have switched to fixed interest rates
so you can no longer bid for a variable rate.
Generally the return on Funding Circle is now around 7% to 8%. Another disadvantage of FC is that loans are
unsecured and any defaults lower the actual return.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>So which platforms
have I increased my proportional share? Well, there are three platforms that I now favour and they are all asset-based. These are Money Thing, Funding Secure and
Saving Stream. Asset-based means the
loan is secured against the asset. The
usual asset is property or land but can also be works of art, jewellery, super
cars, boats, industrial machinery and shipping containers.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<h3>
<b><span style="color: #3d85c6;">Saving Stream</span></b></h3>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>Saving Stream is currently
my number 1 choice with great track record (no losses so far) and typically one
year loans at an interest of 12% with zero fees.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>Saving Stream are continually refine their offering and are the only platform to offer Pre-Funding. This allows the lender to specify how much
they wish to lend on future ‘pipeline’ loans.
In other words you can bid or buy on the secondary market without the
need to pay money into the platform up front.
However, once transactions are completed you are asked to settle up
within 24 hours.<o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>Anyway, here is wishing you
all a very happy and peaceful Christmas and a prosperous New Year. </b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
<b>Finally, if you haven't tried it, then why not consider including Peer to Peer Lending in your 2016 portfolio? Trust me, Peer to Peer Lending is a
great way to improve your financial prospects! <o:p></o:p></b></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi3Mvxd0DyB699sZ1CR8P0WcSjhwq1ifrb7f7tlEwGruF1x4d2LCcdM11kavAEy23pOvMDLKjlsNSyBMruvIodzGY4EOzJA8jvoniKkgIpfxhm9BxB35-omOL3vsfP7m5N6QyxdUavNhio/s1600/Christmas.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi3Mvxd0DyB699sZ1CR8P0WcSjhwq1ifrb7f7tlEwGruF1x4d2LCcdM11kavAEy23pOvMDLKjlsNSyBMruvIodzGY4EOzJA8jvoniKkgIpfxhm9BxB35-omOL3vsfP7m5N6QyxdUavNhio/s320/Christmas.jpg" width="320" /></a></div>
<div class="MsoNormal">
<b><br /></b></div>
<br />
<div class="MsoNormal">
<b> <o:p></o:p></b></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-62803472735986344092015-12-12T17:26:00.000+00:002015-12-27T11:42:32.356+00:00Saving Stream: Steadily Increasing the Flow of Peer to Peer UK Property Loans!<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn0ErKY9FPvDiDbVWBBU6w2mJBbv1gqKq2zWyYw-OQv3muYZv4GVnXz2UuSZrFKfnQaPSuiQ_tBRkUWuKcWNEj8SY5ULmbKArPj9ek-6PPeQVvI7RjV12lAx1Yc3zdEAjNluLs227tGeQI/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn0ErKY9FPvDiDbVWBBU6w2mJBbv1gqKq2zWyYw-OQv3muYZv4GVnXz2UuSZrFKfnQaPSuiQ_tBRkUWuKcWNEj8SY5ULmbKArPj9ek-6PPeQVvI7RjV12lAx1Yc3zdEAjNluLs227tGeQI/s1600/Saving+Stream+Logo.png" /></a></div>
<h3>
<span style="background-color: white; color: #3d85c6;">Full Flood?</span></h3>
<br />
In my opinion, Saving Stream, incidentally my favourite PtP
platform in the UK, is now more than a stream and is rapidly becoming a river
in full flood of substantial, i.e. multi-million pound, UK property loans.<br />
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
Although a relatively ‘new kid on the block’ in terms of
Peer to Peer Lenders, Saving Stream is growing rapidly and have recently moved into new premises in
Southsea.<br />
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving stream loans are all asset-based, return 12% per annum (plus no fees) and are secured against property
associated with the loan. These bridging
loans normally last for about 12 months. Secured loans mean that, in the event of a default, there is a reasonable
probability of getting the capital back once the associated property has been sold
off. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Secondary Market</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving Stream also have a simple secondary market allowing
loans to be sold at any time to other members on the platform. This is great for those wishing to exit a
loan early and also for those who wish to diversify, reducing their exposure
from a single, larger loan to a number of smaller ones.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Note that the secondary market only operates at par. This means there is no opportunity to sell at
a premium or discount. I like this
approach and the simplicity of the SS secondary market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Pre-Funding</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The other fantastic thing about the Saving Stream platform
is Pre-Funding. Every other UK PtP platform
informs you when a loan is expected to come on-line and then requires you to add
sufficient funds to your account before you bid. Often bidders fail to get anything because
the ‘big players’ grab the lot in the first few seconds. The unsuccessful bidder then has to decide
whether to leave their cash on the platform (earning no interest) until the
next loan or whether to withdraw the cash again. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Pre-funding allows the bidder to define how much of each
pipeline loan (ie those not yet ‘live’) that they wish to purchase. At this point the lender doesn't pay
anything. Once the loan is ready to go
live, saving stream email you to let you know what proportion of your bid has actually
been allocated to you. So, for example,
if I bid for £1000 of a £1M loan and the total pre-funding bids are £2M then I
only get half what I bid, i.e. £500.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Settling Up</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
At this point you can sell part of the new loan, if you have
been allocated too much, and/or buy or sell parts of other loans on the
secondary market. Once this activity is
complete the platform indicates exactly what you owe and SS ask you to settle
up, ideally within 24 hours.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Generally, when a large, multimillion £ pound loan comes on
stream, the secondary market opens up temporarily as lenders release older
loans in order to fund the newer ones.
This is the time to diversify.
Normally the demand for a share in new or old loans outstrips supply so,
on the Saving Stream platform, selling a loan is almost instantaneous where as
it takes patience to successfully buy an existing loan. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">What Next?</span></h3>
<br />
<div class="MsoNormal">
What next for Saving Stream?
Well, I for one, hope they can continue to delight their rapidly
expanding Peer to Peer Lending audience in
2016. This means they continue their excellent record of negotiating and managing new and existing
loans so any future defaults result in no permanent losses for their lenders.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn0ErKY9FPvDiDbVWBBU6w2mJBbv1gqKq2zWyYw-OQv3muYZv4GVnXz2UuSZrFKfnQaPSuiQ_tBRkUWuKcWNEj8SY5ULmbKArPj9ek-6PPeQVvI7RjV12lAx1Yc3zdEAjNluLs227tGeQI/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn0ErKY9FPvDiDbVWBBU6w2mJBbv1gqKq2zWyYw-OQv3muYZv4GVnXz2UuSZrFKfnQaPSuiQ_tBRkUWuKcWNEj8SY5ULmbKArPj9ek-6PPeQVvI7RjV12lAx1Yc3zdEAjNluLs227tGeQI/s1600/Saving+Stream+Logo.png" /></a></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-36512683557996653122015-10-30T11:46:00.000+00:002015-11-21T23:02:40.608+00:00Traditional Savings Options with next to no interest or UK Peer to Peer Lending with Realistic Returns?<br />
<h3>
<span style="color: #3d85c6;"><i>Are you a just a ‘Sun Lounger Saver’ ? – or is Peer to Peer
Lending and 'mixing in with the locals' your holiday habit?</i></span></h3>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx7rvAAgdlgDhrLsZZ6_MuXXqjkfLepv88opk63p_pp2c-GhVzorgviL0fo38IFyTGt7DXIH9DPxZk08HS80AhRVtMvjEURlt9GeYsj4-WGtdWGnallENDgYWB6A0HE9B2VDyqAULc2hzS/s1600/sunlounger-tropical-beach.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="212" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx7rvAAgdlgDhrLsZZ6_MuXXqjkfLepv88opk63p_pp2c-GhVzorgviL0fo38IFyTGt7DXIH9DPxZk08HS80AhRVtMvjEURlt9GeYsj4-WGtdWGnallENDgYWB6A0HE9B2VDyqAULc2hzS/s320/sunlounger-tropical-beach.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Sun Lounger for Traditional Savers?</td></tr>
</tbody></table>
<div>
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
You probably wonder what on Earth I'm on about but please
hear me out. We recently took a holiday
in Barbados and I noticed that most people in the hotel made a bee-line for the
sun loungers and only ever left them to grab food or a drink (leaving the
obligatory, illegal towel behind to reserve their space in the sun). You’d find few guests ever venturing into the
lovely pools and even less risking the delightfully warm ocean or exploring the
idyllic, tropical beach.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Traditional Savers</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Traditional savers have the same fixed ideas, such as
investing in cash ISAs, but never think to explore the ‘loans’ beach yet alone
the whole ‘lending’ island. The peer to
peer market in the UK is teeming with a rich variety of platforms offering lots
of different angles on the Peer to Peer model.</div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Peer to Peer Lending </span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
You can play pretty safe and get interest rates of around 6%
but you can also lend against a whole smorgasbord of assets and get interest
rates of between 7% to 14% secured against land, property, words of art, cars
planes, industrial plants or shipping containers. Assessing the risks involved is all part of
the fun.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Monkeying Around!</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I’m a massive fan of UK Peer to Peer Lending and currently
invest with around 10 platforms. This is
reflected in the fact that in Barbados my wife and I spend much of our time
wandering along the beaches and boardwalks or catching local ‘reggae’ buses ($3
(60p) to anywhere on the Island).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgebPzMpsGao0y_MbVzb5Ol5jkhfTg_GpzTtbdQNusKs54Plfj9p_UPdbwHk7xxDCs-8TsGNAH1uDltZBkcUv-XNvUPcmEsdlNPld7QIllDdgX9RAo_UMYPeTnMD-VKG0R8fG2JIJu0v6os/s1600/IMG_3344.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgebPzMpsGao0y_MbVzb5Ol5jkhfTg_GpzTtbdQNusKs54Plfj9p_UPdbwHk7xxDCs-8TsGNAH1uDltZBkcUv-XNvUPcmEsdlNPld7QIllDdgX9RAo_UMYPeTnMD-VKG0R8fG2JIJu0v6os/s320/IMG_3344.JPG" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Green Monkeys in Welchman Hall Gulley, Barbados</td></tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
We saw lots of wildlife including loads of green monkeys and
a recently hatched baby turtle heading for the ocean and successfully swimming out
to sea against the crashing waves. For
me that beats lying on a lounger, getting drunk in the hotel bar or investing
in a cash ISA! </div>
<div class="MsoNormal">
<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-79068020754796350992015-10-26T18:13:00.001+00:002015-10-30T11:04:21.418+00:00Asset Backed Peer to Peer Lending - the Better Solution?<div class="MsoNormal">
In simple terms there are two approaches to PtPL
platforms. The first is to offer minimum
risk and simplicity of operation and scale it up to satisfy both institutional
investors as well as a mass market. Typical
examples of these platforms, in the UK, are Zopa and Ratesetter.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
These platforms typically lend to domestic borrowers with no
asset security. This means if a default
occurs then a full recovery is unlikely and, at best it may take a long time to
get the money invested back. For this
reason, Zopa and Ratesetter have contingency funds to protect the lender from
losses, resulting in typical interest rates to the lender of between 4.5% and
6.5% over 3 to 5 years.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Saving Stream</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" /></a></div>
<div>
<span style="color: #3d85c6;"><br /></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Asset backed loans represent a much better option for the more
adventurous Peer to Peer Lender. Money
is lent against a tangible asset with a verifiable value. There are a number of specialist platforms
for Asset-based loans. Saving Stream is
one of the simplest and offers 12% on every loan, with 1% being paid every
month.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving Stream bridging loans were originally against boats
but they have more recently shifted to land and property with many loans being for
well over a £1M. These typically have a
term of about a year. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">LTV</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
One of the key parameters with an asset-based loan is the
Loan to Value (LTV). For example, if a
picture valued at £1M is used to secure a loan of £500,000 then the LTV is
50%. Assuming the valuation is accurate
then this leaves plenty of cash available, should the loan default, to arrange
for the sale of the item and return all the cash owing to the lenders.<o:p></o:p></div>
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<br /></div>
<h3>
<span style="color: #3d85c6;">Ablrate</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA79GrpOGffXFKPz_BOBHO6BOMaOdTCps4qhQxXypd9fnx-JbScPr6eQqLP-Q1zlhQUlt_RwleW1BBFbQSJGTITad7cZF2Wo3m_kYqmkM5t5NxiHiUjmAUWDQ76AMQlzewYH7vB5BpE5D9/s1600/Ablrate-Logo_drop_white-1024x237.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="74" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA79GrpOGffXFKPz_BOBHO6BOMaOdTCps4qhQxXypd9fnx-JbScPr6eQqLP-Q1zlhQUlt_RwleW1BBFbQSJGTITad7cZF2Wo3m_kYqmkM5t5NxiHiUjmAUWDQ76AMQlzewYH7vB5BpE5D9/s320/Ablrate-Logo_drop_white-1024x237.png" width="320" /></a></div>
<div>
<span style="color: #3d85c6;"><br /></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
It’s surprising what a range of assets you can lend
against. Ablrate began with loans
against aircraft but have shifted towards industrial machinery such as bottling
plants and shipping containers. Their
shipping container loans are currently paying 14%. The loan funds the purchase of a number of containers
and the loan is paid off once the containers are sold. These typically run for 6 months at a time
with an option to renew.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Money Thing</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-E5YL7zjoDC7xWj21I41KtEX8xev8pCLF6NKJSOD6i1e7unS17SHn6taTGVqKcGRlnwvTt4btJlRZtbb9dGNLxv5i_dxz3in-n9IhC4Tc24XBd-RYTSR0USaoaf3hIynkAZWzmGpmLk_U/s1600/zU6rw4QV_400x400.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-E5YL7zjoDC7xWj21I41KtEX8xev8pCLF6NKJSOD6i1e7unS17SHn6taTGVqKcGRlnwvTt4btJlRZtbb9dGNLxv5i_dxz3in-n9IhC4Tc24XBd-RYTSR0USaoaf3hIynkAZWzmGpmLk_U/s200/zU6rw4QV_400x400.jpeg" width="200" /></a></div>
<div>
<span style="color: #3d85c6;"><br /></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Two other players, Money Thing and Funding Secure originated
from the pawn-broking industry. Money Thing
also offers a fixed rate of 12% across all loans. My loans with Money Thing currently include
several cars, managed portfolios of jewellery and electronics, several artworks
(paintings) and finally a piece of land.
Money Thing are currently expanding into both land and property and also
into the supercar market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Funding Secure</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdjR12O4EPbWFcs_ZAhug1P7cvra0Rh4qqpwLEYh1VNikBHkMtTfrxdZZGvmzq7yqkksG6PzsIsBw2InrRaiibaWEIFS0HFv-MGq-LPGXIZyLTvbPSh6c7hnZRB5NTPaf7BrYlEJ1xUH_z/s1600/157.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="71" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdjR12O4EPbWFcs_ZAhug1P7cvra0Rh4qqpwLEYh1VNikBHkMtTfrxdZZGvmzq7yqkksG6PzsIsBw2InrRaiibaWEIFS0HFv-MGq-LPGXIZyLTvbPSh6c7hnZRB5NTPaf7BrYlEJ1xUH_z/s320/157.png" width="320" /></a></div>
<div>
<span style="color: #3d85c6;"><br /></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Funding Secure also offer a mix of land, property and other
assets. Their loans are usually 12% or
13% with a renewable term of 6 months.
Other assets I’ve lent against with them include historical book
collections, railway memorabilia, micro-sculptures and a replica of an 18<sup>th</sup>
century schooner!</div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
I have to say asset-based lending is far more interesting
and rewarding and wins hands down
against the more mundane Zopa model of lending money to a householders to buy second-hand
car or for a bit of home improvement. <o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-44701117082154027312015-10-21T14:23:00.000+01:002015-10-21T14:23:41.082+01:00 Is Funding Circle still a Viable Platform for Peer to Peer Lending?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s1600/FC+logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s320/FC+logo.jpg" width="320" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This question is prompted by the recent change by Funding Circle
from variable rate bidding to fixed rate loans for lenders. For me, and majority of the UK PtPL Lending Community
(reflected by the <a href="http://p2pindependentforum.com/" target="_blank">Independent Peer to peer Lending Forum</a>) the answer is probably
NOT.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Unsecured Loans and Defaults</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The biggest problem with Funding Circle is that most of
their loans are unsecured. This means
that the lender is unlikely to get much money back should the borrower
default. In my case I currently have
losses with Funding Circle, due to default, of £628 with only £48 recovered so far. This reduces my projected interest rate of
8.5% (based on Funding Circle’s loss statistics) to an actual rate (after fees
and losses) of 7.6%. This rate is
falling as the defaults increase.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Lower Lender Interest Rates</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Funding Circle’s new fixed rates are surprisingly low and
result in a projected actual interest rate of around 7% for the higher risk
bands (A, A+) again based on Funding Circle’s (optimistic) statistics. My own experience would suggest actual
interest of around 6%. In practice, since
fixed rate loans were introduced, a bigger proportion of loans currently
offered are A or A+.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The other large PtP Lenders such as Ratesetter and Zopa have
contingency funds to cover defaults but with Funding Circle all the risk is
passed on to the lender. For me, short term asset-secured lending at an interest rate
of around 12% is much more attractive.
Should the borrower default then I know the asset will sold I should eventually
get all or most of my money back.</div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">However, Excellent Liquidity</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, one advantage of Funding Circle is excellent
liquidity. They have an efficient
secondary market allowing people like me to gradually sell my existing loans at
a premium rather than waiting for them to run for the full term. In contrast, Ratesetter has unspecified, high
penalty charges should you wish to pull your cash early.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Funding Circle Going for Growth</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I think Funding Circle have made a reasoned business decision
to focus on growth, with expansion into various European countries and greater
reliance on institutional investors and a simplified approach. In
doing this they have deliberately turned their back on the early adopters and
small, entrepreneurial investors that PtPL was originally all about.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
Thankfully there are several smaller platforms such as Saving
Stream, Funding Secure and Money Thing who are working closely with the PtPL
community in order to meet their lending needs and provide the necessary deal
flow to absorb the money released from the bigger platforms, such as Funding Circle,
now offering lower interest rates to lenders. <o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-22059543058184364662015-09-21T19:26:00.000+01:002015-09-21T20:23:10.267+01:00Funding Circle to Quit Variable Rate Loans<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s1600/FC+logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s320/FC+logo.jpg" width="320" /></a></div>
<br />
Peer to Peer Lending remains a very volatile marketplace
with constant revisions to platform function and design. For example, Saving Stream have recently added the very
useful pre-funding of loans facility so you don’t pay until AFTER the loan is allocated.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Meanwhile, Funding Circle (FC) have announced that in the next few
weeks they will no longer offer Variable Rate Loans, where individual lenders
can bid for their own interest rate. FC argues
that this change makes the platform easier to use for both borrowers and lenders.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">No more Flipping?</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, fixed rates take away much of the enterprise of
buying and selling loans on the secondary market. The practice of ‘flipping’, where you could
buy a loan at a high rate of interest and then sell it at a premium, is largely
eliminated with fixed rate bidding system. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This was one of the attractions of FC, particularly to financially-savvy,
entrepreneurial geeks who enjoyed gaming the platform while providing a useful
service by improving liquidity via a good supply of instant loans. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">So how will the new platform look? </span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Well, the new interest rates being offered appear to be
lower than many existing lenders would like, although FC may either add 1% or 2% ‘Cashback’
or shift their rates upwards to fund some larger loans.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The major issue I have with FC is the number of ‘downgraded’
loans and the relatively low level of recoveries. My effective interest rate is somewhat poorer
than the FC prediction. I’m predicted to
be making 8.5% but am currently down to 7.8%.
This can obviously shift up or down depending on future failure of rates
or recoveries. Currently I’ve ‘lost’ over
£500 with less than £50 being recovered. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Moving On?</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The key thing is that most FC loans are not secured against
assets so the chance of a full recovery of capital and interest is relatively
low. Fortunately many of my FC loans can
be sold at a premium on the secondary market so I am gradually reducing my
exposure the FC in favour of P2P platforms offering better interest rates, secured
against material assets such as property, land or artworks.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Asset-Based Platforms</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Saving Stream offers 12% across the board on property and
Ablrate offer 14% on shipping containers while Funding Secure offer a range of
interest rates, mainly on property with rates of typically 12-13%. The trouble is, these asset-based loans are increasingly popular
and the demand for new loans is not being fully met. This is NOT helped by FC putting
the brakes on their own secondary market and driving their more discerning lenders to other platforms!
</div>
<div class="MsoNormal">
<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-84863254755475290082015-09-11T18:15:00.000+01:002015-09-11T19:12:56.482+01:00 Assetz Capital – yet another new account, the Quick Access Account<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Assetz Capital is a site that it full of innovation but the
way the site works is complex and sometimes unpredictable. The latest account is the Quick Access Account
(QAA). This joins the Cash account,
Manual Loan Investment Account, Green Energy Income Account and the Great
British Business Account. Yes, that’s
FIVE accounts in total, including the cash account.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">QAA</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The QAA offers (almost) instant access to funds, is secured
by a provision fund and has an interest rate of 3.75%. The clever thing is that as new loans come
online or existing loans, specified by the lender, become available, money is
automatically transferred from the QAA to one or more of the other accounts. In other words, Assetz are offering 3.75% interest
on cash that would otherwise be parked (with no interest) in the Cash Account.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">In the Lab?</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For me, Assetz is a kind of laboratory experiment, a prototype
or beta site but with real money and real loans. It reminds me, in some ways, of Funding
Circle with its complex secondary market and the ability to bid for your own
interest rate. Mind you, bidding for
varied rates on FC will soon be a thing of the past. FC are shortly going over to
fixed rates only so the ‘flippers’ and their ‘bots’ will need to find a new
home! More of FC and fixed rates in a future post.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Where am I with Assetz?</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I've got bits of cash in the 4 accounts and wait with INTEREST, hopefully 3.75%, 7% or more (Manual Loan Investment Account), to see what cash ends up where and when! Anyway, I look forward to putting more money into Assetz, if
and when the algorithms get sorted out and the flow of new loans increases, and
I can fully understand what the platform is doing with my cash! </div>
<div class="MsoNormal">
<o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-31951398068666147052015-08-23T20:23:00.000+01:002015-09-11T17:30:53.843+01:00 Saving Stream – Is the New Pre-Funding Option the Way Forward?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In my <a href="http://prending.blogspot.co.uk/2015_08_16_archive.html" target="_blank">last post</a> I described how massive demand for loans on the
Saving Stream platform had resulted in many lenders being locked out of recent
loans while greedy lenders with big pockets were snatching up everything in
sight.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">The Solution</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I’m pleased to announce that Saving Stream have come up with
a simple fix – the Pre-Funding Option.
This allows each lender to set up an amount they are prepared to invest
in each new loan. This means everyone who
wants ‘in’ will get a share of the loan.
While those with big pockets will obviously get only a proportion of
their pre-funding amount they won’t be able to steal from smaller bidders. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Not Perfect but ..</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Like all fixes, it isn’t perfect but, with the demand for
loan parts on the secondary market, anyone who has second thoughts can easily
sell all or part of a share in a loan. As with
existing Saving Stream loans, you can bid without having to have the money in your
SS account. Once you know the size of
loan you have been allocated you can transfer the cash into your SS account
retrospectively.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I for one am happy with this solution and look forward to
participating in future loans on the Saving Steam platform!<o:p></o:p><br />
<br />
<span style="color: #3d85c6;"><b>UPDATE (11 Sep 2015)</b></span><br />
<span style="color: #3d85c6;"><b><br /></b></span>
The New Pre-Funding option seems to be working well. My first loan was scaled back significantly from the amount I offered but the second was taken up in full. All I need to do in each case was settle up via a bank transfer once I received the email. I love the simplicity of SS. 12% across the board and the ability to pre-bid and then pay later. <b><span style="color: #3d85c6;">What's not to like? </span></b><br />
<br />
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-77628133003585172362015-08-18T20:07:00.002+01:002015-08-18T20:18:11.928+01:00Saving Stream – When UK Peer to Peer Lending Goes Bad!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbp2zI-75jiExK87U4NJjN9O_vT7QmUvTRSLYtHBIPh-9qCvYpI_4onm0nPzF-NChmFyqjF-hz3gz5QE5yWHtjThbXSaxwStQSNHe-riHCHfbL8OOujUfdnYFuhyphenhyphen26FE0pPxSbW69AVMhQ/s1600/Saving+Stream+Logo.png" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Until recently Saving Stream was a great site for Lenders. It had a good reputation, simple interface,
12% across the board interest on asset-backed property loans and a fully
functioning secondary market.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Hitting the Fan!</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In the last few weeks, the ‘proverbial’ has hit the fan! The number of lenders has increased rapidly and
also the size of their pockets. SS have
refused to limit bid sizes (as other sites such as Funding Secure and Money
Thing do). The result is that I have
been locked out of the site when the last 4 loans have come on line and have
been unable to invest anything in spite of intense and futile keyboard
activity. </div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Evil Robots </span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
After half an hour or so these
large loans (some over a million £) are gone because people with large pockets
(or idiots) are chucking typically £50k on a single loan. Also the secondary market now empties immediately anything
surfaces on it. This is rumoured to be partly
due to the use of ‘bots’. SS have failed
to prevent bot use (for example by inserting a Captcha), failed to upgrade
their servers/software and worst of all refused put any limit on bid size.</div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Not Cricket</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
This is NOT what Peer to Peer is supposed to be all
about. Ordinary people with limited
funds and limited technology are effectively being denied access to SS
loans. It’s like a millionaire going to
the local sweet shop and buying up the entire stock.<o:p></o:p><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-EK1lOw_-AWlpqw6x3v8d1TZ9FkTGpaL8dXu0WeXxWty8tSUyGkFuYRUKERBxpjbjJxPwnaSoXpK2NlBT7Q-mnoncmWeYPZSZofE5AZadwJy8X1TWjvC6dy217xJM019GRGv98RWkZyPK/s1600/gold+rush.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="129" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-EK1lOw_-AWlpqw6x3v8d1TZ9FkTGpaL8dXu0WeXxWty8tSUyGkFuYRUKERBxpjbjJxPwnaSoXpK2NlBT7Q-mnoncmWeYPZSZofE5AZadwJy8X1TWjvC6dy217xJM019GRGv98RWkZyPK/s320/gold+rush.jpg" width="320" /></a></div>
<br /></div>
<div class="MsoNormal">
<h3>
<span style="color: #3d85c6;">Saving Stream in Full Flood</span></h3>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Hopefully SS will fix things, but right now the Saving Stream
is in full flood and the infrastructure can’t cope. Unfortunately, in the next month or so a huge pile of SS cash is being released as loans mature and many will find it difficult to
reinvest in the platform. Its classic
gold rush time with too many prospectors chasing too little gold and the greedy
few grabbing every nugget.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
I will be monitoring SS and hoping it improves but right now I have
no choice but to invest elsewhere. <o:p></o:p><br />
<br />
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-62143080302225998482015-08-07T17:47:00.002+01:002015-08-07T17:53:50.641+01:00Assetz Capital Peer to Peer Lending - New Account Offers Instant Access Savings at 7% !<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" /></a></div>
<br />
<h3>
<span style="color: #3d85c6;">Introducing the Assetz Great British Business Account (GBBA)</span></h3>
<br />
<i><b>Too good to be true? Read on ..</b></i><br />
<br />
Assetz Capital have just introduced a THIRD Peer to Peer Lending Account. Until recently, they had:<br />
<br />
<ul>
<li>A Manual Loan Investment Account where you build your own portfolio of loans</li>
<li>A Green Energy Income Account that pays 7% </li>
</ul>
<br />
The Manual Account typically pays around 11% on average with a package of self-selected secured (against property) loans. There is no protection fund. The Green Account automatically selects green loans (wind turbines, solar etc.) for you making a balanced, protected, portfolio at a fixed interest of 7%.<br />
<br />
The good news with the Green Fund is it is highly liquid. In other words you can (normally) get most of your money out very quickly.<br />
<br />
<h3>
<span style="color: #3d85c6;">Ratesetter Comparison </span></h3>
<br />
This compares very favourably with, for example, Ratesetter, where you currently get 5.9% in the 5 year market. This is decidedly NOT liquid in that it takes 5 YEARS to get all your money back and there are heavy penalties for early withdrawal.<br />
<br />
<h3>
<span style="color: #3d85c6;">The GBBA</span></h3>
<br />
So what about the third account, the GBBA? This is similar in operation to the Green Account but this one offers 7% based on loans to Small to Medium British Enterprises (SME). Like the Green Account it is protected by a contingency fund. <br />
<br />
Some Assetz customers have been cautious about the future of Green Investment so this new fund offers a great alternative to park some cash temporarily and still get a really good rate of interest without too much risk.<br />
<br />
Note that the Manual account includes all the Assetz P2P loans while the Green and Business Accounts each include a relevant subset of these according to the fund type (Green or Small Business). <br />
<br />
<h3>
<span style="color: #3d85c6;">'Hands On' verses 'Leave Alone'</span></h3>
<br />
While the Manual account is fairly 'hands on' and involves moderate risk, the Green and Business accounts are much safer and require virtually no management. In other words, You deposit some cash in your Assetz account then transfer it into the GBBA. When you want the money back you withdraw it from the GBBA and hopefully it will quickly appear in your cash account where you can transfer it back to your current account. <b> Tres simple!</b><br />
<b><br /></b>
<br />
<h3>
<span style="color: #3d85c6;">Warning</span></h3>
<br />
<b><i><span style="color: #3d85c6;">Please note that I have no particular preference for Assetz Capital but, as other Assetz lenders have done, I have purchased a few shares in the company. So please don't take this as a recommendation. Make up your own mind as to whether this is a good deal for you and beware of investing too much in any single Peer to Peer platform.</span></i></b><br />
<br />
As with all investing, DIVERSIFICATION is key. Happy Lending!<br />
<br />Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-9911826690356525692015-08-01T20:42:00.000+01:002015-08-03T12:24:25.222+01:00The Peer to Peer Lending Lifecycle - Where am I today?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJYyhSQ_aC2VHb0TtN5ZkzlRooyAPVBGh-2KS7MuEd2c-twQt0kY6aYnwrK6Puq0tBaLLHGqZC5gQ00sKriFYYsCOxuXd1_IyRbxlS2-sTMPJCzKxVw_xwT8cqAW7ab3HZnYNUxXpMSWhZ/s1600/s465_notes-coins-960x640.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJYyhSQ_aC2VHb0TtN5ZkzlRooyAPVBGh-2KS7MuEd2c-twQt0kY6aYnwrK6Puq0tBaLLHGqZC5gQ00sKriFYYsCOxuXd1_IyRbxlS2-sTMPJCzKxVw_xwT8cqAW7ab3HZnYNUxXpMSWhZ/s320/s465_notes-coins-960x640.jpg" width="320" /></a></div>
<br />
I’ve now informally reviewed eight UK P2PL platforms that I have personal experience of so I thought it might be useful to let you know how I am doing. My goal here is to give you a simple overview and avoid too much jargon or technical stuff. If you check the archive you can find my posts on the various platforms.<br />
<br />
<h3>
<span style="color: #3d85c6;">The Beginning</span></h3>
<br />
I guess most people begin their P2P journey on a simple platform like Ratesetter or Zopa where you decide how much you want to invest and for how long. RS and Zopa spread the risk for you. These platforms are largely hands free (more like investing in a shares or funds). The borrowers are private individuals rather than businesses.<br />
<br />
<h3>
<span style="color: #3d85c6;">The Next Step</span></h3>
<br />
The next step I made was to try Funding Circle. This platform is more complex and allows the lender to bid in an auction for individual unsecured business loans. By bidding, you decide what interest rate you require. If you get this right you will end up with a high interest rate while other lenders for the same loan get a lower rate. <br />
<br />
For example, lets assume the borrower’s target interest rate for a loan is 10%. In practice some lenders may have bid 7% while others may bid 14%. The rate of 10% is an average of all the offers from the pool of lenders. The highest rate bids are eliminated as lower rate bids pile into the auction so the trick is to be ready to lower your rate during the auction but not to go lower than your own target. It’s a bit like an Ebay auction but more complicated because there are lots of winners (but some win more than others, if you get my drift!).<br />
<br />
<h3>
<span style="color: #3d85c6;">Risks</span></h3>
<br />
As you can see, Funding Circle requires a fair bit of micro-management and is more suitable for those with some spare time. Another issue with Funding Circle is the word ‘unsecured loan’. A proportion of loans will go into default and recovery of debt is, at best, relatively low (partly because there is no asset the loan is secured against). With Funding Circle, the lender takes on the risk of defaults because there is no contingency fund.<br />
<br />
<h3>
<span style="color: #3d85c6;">The Numbers</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-DhpcWaGAgZfOk7Ed7PRfPu7Fsx-E4foJJxbgi0edM1GiYUWUPEwy3kRab53Jno5020Z9zzci6Ca6vp5DZ1r30tB8SYXA8lkcNBIrVJGEYDz4yCQAGH2JYkFwMWsfTVYDjOCRg-iRynUD/s1600/pie+chart+2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="233" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-DhpcWaGAgZfOk7Ed7PRfPu7Fsx-E4foJJxbgi0edM1GiYUWUPEwy3kRab53Jno5020Z9zzci6Ca6vp5DZ1r30tB8SYXA8lkcNBIrVJGEYDz4yCQAGH2JYkFwMWsfTVYDjOCRg-iRynUD/s400/pie+chart+2.png" width="400" /></a></div>
<br />
<br />
<br />
Let me put some figures to all this. About 50% of my Peer to Peer pot is currently in Ratesetter where I am earning around 5.9%. This is reasonably protected from any bad debt. 25% of my money is in Funding Circle where I am currently earning 7.9%. This was 8.3% until recently, when two more loans defaulted. Funding Circle estimate, based on their statistics, I should be earning 8.7%. I‘ve actually lost £450 with (so far) only £36 recovered. I should add my loans are highly diversified and I now never put more than £60 into an individual loan.<br />
<br />
<h3>
<span style="color: #3d85c6;">Onwards and Upwards with Asset-based Loans?</span></h3>
<br />
Where is the other 25% of my lending? Well, I'm gradually (and cautiously!) moving more money into five of the newer, asset-secured platforms:<br />
<br />
<ul>
<li>Ablrate</li>
<li>Assetz Capital </li>
<li>Funding Secure </li>
<li>Money Thing </li>
<li>Saving Stream </li>
</ul>
These pay between 10 and 14% (with no fees) with the loan being secured against property, land or other tangible assets. The pie chart illustrates the current state of my investments. With these platforms, a reasonable amount of micro-management is required as you need to select each loan and each platform is different in the way it works.<br />
<br />
Generally there are not enough loans available on these platforms to satisfy the demand so you need to bid for new loans as soon as they appear. Interest rates are fixed, so the auction is much simpler than Funding Circle, you simple decide how much you want to bid for. Note some sites have a secondary market where you can buy existing loans but, in practice, these offers are like fireflies, they disappear in the blink of an eye!<br />
<br />
Incidentally, If you Google (or Bing) 'UK Asset based Peer to Peer Lending', you won’t find much impartial information. Wiki is sadly lacking in information about UK Asset-based lending; which is one reason why I started this blog. So more on Asset-based P2P lending in future posts!<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-25819758151224084972015-07-29T11:01:00.001+01:002015-09-21T19:30:58.160+01:00ABLRATE – What’s in a Name? Yet another Asset-based P2P Loan Platform<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjofe9SsW4zdM7XlXMJlbzyrmBAgoNupdVeGY2GHLdsm4_REjq4hrf0VQYUQY0ch1BYsymoD4zMNMEoqcYmcxMZ5n0Q92ZE3zbN5bPySELVrOqAmx17aygtKaA4yeEJBADAxxZEqa3ArTHg/s1600/Ablrate-Logo_drop_white-1024x237.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="74" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjofe9SsW4zdM7XlXMJlbzyrmBAgoNupdVeGY2GHLdsm4_REjq4hrf0VQYUQY0ch1BYsymoD4zMNMEoqcYmcxMZ5n0Q92ZE3zbN5bPySELVrOqAmx17aygtKaA4yeEJBADAxxZEqa3ArTHg/s320/Ablrate-Logo_drop_white-1024x237.png" width="320" /></a></div>
<br />
<br />
This is how ABLRATE describe themselves:<br />
<br />
<i style="background-color: white;"><span style="color: #3d85c6;">Ablrate is a peer lending platform that provides asset finance to a diverse range of businesses. Our platform was initially launched to allow our Lending Members access to the lucrative aircraft leasing space. The sector is highly regulated, has bank finance involved and can provide lenders with excellent returns and security. </span></i><br />
<i style="background-color: white;"><span style="color: #3d85c6;"><br /></span></i>
<i style="background-color: white;"><span style="color: #3d85c6;">The platform was expanded to give Lending Members access to asset finance deals in capital equipment, property and any other transactions where our members have good security and good returns. Ablrate was named as the 'abl' stands for 'Asset Backed Lending' which is at the core of our platform and will remain so.</span></i><br />
<i style="background-color: white;"><span style="color: #3d85c6;"><br /></span></i>
<br />
<h3>
<span style="background-color: white;"><span style="color: #3d85c6;">Interface</span></span></h3>
<br />
Ablrate has pleasing platform user interface and offers very rapid crediting of bank transfer deposits (ie a few minutes). Interest rates currently vary from 10-14%. There were no loans available when I joined so I bought £300 worth of a bottling plant loan on the secondary market just to try the platform out.<br />
<br />
<h3>
<span style="color: #3d85c6;">Aircraft Leasing</span></h3>
<br />
As well as aircraft leasing they also do manufacturing plants and marine containers. I’ve recently added a £300 loan against marine containers (14%) with a term of around 6 months.<br />
The secondary market allows you to buy and sell loans at a premium of discount, in a similar way to Funding Circle. Other asset based platforms that do have a secondary market, currently only allow you to buy or sell at value.<br />
<br />
<h3>
<span style="color: #3d85c6;">Any Good?</span></h3>
<br />
My main problem with Ablrate (apart from the odd name), so far, has been a lack of new loans. However, I feel Ablrate has a lot going for it and offers good support via the P2P Independent Forum and has an interesting portfolio of loans. The company appears to have significant knowledge of the aviation leasing market and that differentiates them from the other asset-based loan companies who follow the ‘pawnbroker’ or ‘bricks and land’ models.<br />
<br />
<h3>
<span style="color: #3d85c6;">Summary:</span></h3>
<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Interest rates: 10-14%<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Secondary market (with premiums and discounts)<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Length of loans 6 months - 5 years<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Quick deposits<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Asset-based <br />
<br />
Ablerate is a P2PL platform to watch. But, as with its rivals such as Saving Stream, Money Thing and Funding Secure, it is too early to make a clear judgement. Only when these platforms have been tested with a few defaults will we be able to make a more considered assessment.<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com2tag:blogger.com,1999:blog-4201327217568820729.post-64951645523395195272015-07-24T20:14:00.001+01:002015-07-29T10:36:21.860+01:00Funding Secure - Yet another UK asset-based Peer to Peer Lending Platform<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggAFZmgKNpKNc5CnqD79iWZO65ayTMpeE4FYnyGHz05fz87Bf-zLUU-zTQQXPUrXva2I9ZIfhp5J5f5lK6uSEF0Ib6NHzCyyixmY-HyZZLesg_Mtf-34Z5J-wHivhPwob6WPkVYQWgCevB/s1600/157.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="71" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggAFZmgKNpKNc5CnqD79iWZO65ayTMpeE4FYnyGHz05fz87Bf-zLUU-zTQQXPUrXva2I9ZIfhp5J5f5lK6uSEF0Ib6NHzCyyixmY-HyZZLesg_Mtf-34Z5J-wHivhPwob6WPkVYQWgCevB/s320/157.png" width="320" /></a></div>
<br />
I’ve recently introduced you to two asset based platforms; Saving Stream (SS) and Money Thing (MT). They both have a fixed interest rate of 12% and are somewhat similar in the way they work.<br />
<br />
<h3>
<span style="color: #3d85c6;">Saving Stream</span></h3>
<div>
<span style="color: #3d85c6;"><br /></span></div>
SS normally lends for a term of one year but also has a secondary market that allows you (currently) to sell your loans easily at any time because there are not enough loans/value to satisfy the demand. Note that this situation could easily change. SS loans are usually secured against property (bricks and mortar).<br />
<br />
<h3>
<span style="color: #3d85c6;">Money Thing</span></h3>
<br />
In contrast, Money Thing is a 6 month term with no secondary market. Loans are typically secured against objects (or bundles of objects). There is the hint of the pawnbroker here; think, artworks, cars and jewellery as well as the odd plane.<br />
<br />
<h3>
<span style="color: #3d85c6;">Funding Secure </span></h3>
<br />
“Yes, but what about FUNDING SECURE?” I hear you cry. Well it’s sort of a cross between SS and MT. Interests rates are normally 12 or 13% with a 6 month term, no secondary market and a mix of security against objects or land/property. More accurately, Funding Secure (FS) appear to have started out with the pawnbroker model but are increasingly moving into land and bricks.<br />
<br />
I’m currently investing modest amounts in the three platforms to see how I get on. So far all three are fine and hopefully, with the relatively short terms, there won’t be too many defaults. <br />
<br />
The minimum investment in an FS loan is a mere £25 so you don’t have to gamble your life savings to give it a go. Transfers from a current account (assuming a rapid transfer) become active on the site within 30min.<br />
<br />
<h3>
<span style="color: #3d85c6;">Better be Quick!</span></h3>
<br />
However, The problem with these platforms is you need to be quick. Once a new loan appears, unless it is a biggy (£100K +) then a frenzied mob gobbles it up before your eyes (On FS, once the loan is live, you can see the amount left diminish before your eyes).<br />
<br />
Do be aware that these platforms are all risky and I fear that in 6 months time I may be warning you to put all your money in Ratesetter or Zopa (with a much lower interest rate).<br />
<br />
<h3>
<span style="color: #3d85c6;">Fine Wines?</span></h3>
<br />
Incidentally I see the next FS loan is ‘Fine wines’ – a massive loan of £500 (asset value £800). I’ll drink to that one! (But what if it’s ‘corked’? That's one thing the valuation expert can’t check!)<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-11591487899264851952015-07-22T20:06:00.000+01:002015-10-24T12:18:59.121+01:00Peer to Peer Lending - Ratesetter and getting your Money Back!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKM_Suh6BeVy17CevbELcQWmV3ugPlpQ5M1bXitCHmU9qnfI_SaPMK_7MhtgcqzSrVNalG40BAWwov31nmLoF3WA9ouEr4pq9C1hIGTJYAhOElKAeOfYJxtnnf0rVM9CJ_O59eeeNdRTvh/s1600/RateSetter-Logo.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKM_Suh6BeVy17CevbELcQWmV3ugPlpQ5M1bXitCHmU9qnfI_SaPMK_7MhtgcqzSrVNalG40BAWwov31nmLoF3WA9ouEr4pq9C1hIGTJYAhOElKAeOfYJxtnnf0rVM9CJ_O59eeeNdRTvh/s200/RateSetter-Logo.png" width="200" /></a></div>
This is a big issue for those of us ‘PRENDERS’ who started stashing lots of money in platforms like Ratesetter and Funding Circle but who now want to shift some of it into higher interest sites such as Saving Stream, Funding Secure or Money Thing. The technical term for this issue is LIQUIDITY (how easy is it to cash in your investment?).<br />
<br />
<h3>
<span style="background-color: white;"><span style="color: #3d85c6;">Ratesetter Sellout?</span></span></h3>
<div>
<br /></div>
About a year ago I put around 50% of my PtPL money into the Ratesetter 5 year market at around 6.0%. I’ve now turned off further investment so my Holding Account receives a few hundred pounds a month that I can reinvest elsewhere. In practice ‘Sellout’, the Ratesetter term for cashing all or part of your investment early, carries too heavy a penalty to make it worthwhile to cash in, except in an extreme emergency.<br />
<h3>
<br /><span style="color: #3d85c6;">Secondary Markets </span></h3>
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s1600/FC+logo.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSEs4uUQIjRtBqk30WgemAt72HST66rp9qG8HdQ-49dCkpKpsPWLrnJWqmIY_qegzr2u3lCy_8I2A6OIy7c3Z9feeljOdwqfjH3OeMiwcfli2S7DZKauaaaJLYtdoDPvLP4AFiCm4gkSiS/s320/FC+logo.jpg" width="320" /></a>However, Funding Circle has a Secondary Market so you can offer some of your loans for sale, at any time, at a premium (or discount) according how attractive the rates are. <br />
<br />
It is really ‘Horses for Courses’. Ratesetter is relatively safe but paying the rate for a five year loan means five years or a penalty. <br />
<br />
With Funding Circle you bid for the rate and can then sell your loans at any time. However your 5 year rate on Ratesetter is protected while on Funding circle the final interest rate you achieve depends on how many defaults you have and how much cash is subsequently recovered. <br />
<br />
<h3>
<span style="color: #3d85c6;">Liquidity in Asset-based high interest platforms</span></h3>
<br />
If you put money into some of the high interest platforms like Saving Stream, or Money Thing (both pay 12%), the terms are short, typically 6 – 12 months, and there is also secondary market making them relatively ‘liquid’. Of course, these newer platforms also carry greater risk in spite of being secured against assets. Currently it is very easy to sell loans but hard to buy. Future events could easily change that.<br />
<br />
<h3>
<span style="color: #3d85c6;">‘What happens in a future financial crisis?’</span></h3>
<br />
Clearly you then have a much better chance of eventually getting your money back from Ratesetter than some of the other platforms.<br />
<br />
<h3>
<span style="color: #3d85c6;">Solution?</span></h3>
<br />
The sensible solution appears to be a portfolio of platforms/loans with the most money in platforms like Ratesetter/Funding Circle and a smaller amount invested in a basket of high interest platforms (if you want some excitement!)<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-84377065905532738612015-07-18T17:58:00.002+01:002015-07-31T19:22:51.313+01:00Money Thing – Another 12% interest, Asset-based Loan Platform<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMKjN1MnICSuNb7uAiqzgMqgC6a0hWw0R50X_VgMTwubx1s69J3cgKgAQczjFsFm6H7mPkRsqxpK653bXnk-n5uwY_m-7KiMXU0rJ0NazPY7KFIwWhAcs4usaxWTV-uMOgARzLxJTvreFo/s1600/zU6rw4QV_400x400.jpeg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMKjN1MnICSuNb7uAiqzgMqgC6a0hWw0R50X_VgMTwubx1s69J3cgKgAQczjFsFm6H7mPkRsqxpK653bXnk-n5uwY_m-7KiMXU0rJ0NazPY7KFIwWhAcs4usaxWTV-uMOgARzLxJTvreFo/s200/zU6rw4QV_400x400.jpeg" width="200" /></a></div>
<div class="MsoNormal">
<b><span style="color: #3d85c6;">Money Thing</span></b> is, in many ways, similar to <b><span style="color: #3d85c6;">Saving Stream</span></b>,
which I wrote about in my last post. All
Money Thing loans offer 12% interest and are typically secured against personal
property such as art, cars, planes or jewellery. It’s a bit like a high Street Pawnbroker.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Loan to Value Ratio (LTV) is typically 50%, ensuring
that selling the asset should cover the loan.
The terms are usually 6 months.
This gives good liquidity as you can get your money plus interest back
over a relatively short period.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The web site is easy to use and the customer support also
appears to be good. You can check what
loans are coming on stream on the P2P Independent Forum. As with other high interest platforms, new loans
are in great demand but the platform currently, typically limits the size of your
investment, in a 24hr period, ensuring that as many lenders as possible get a bite
of the cherry.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Portfolios</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The platform also lumps smaller loans together into a
portfolio of typically £10k to £50k.
This makes lending easier to manage.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Fast Transfers</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Money Thing deposit your incoming cash very quickly so if
you do a ‘fast’ bank transfer they typically acknowledge the deposit in less
than an hour so you can then invest.<o:p></o:p><br />
<br /></div>
<div class="MsoNormal">
Note: Saving Stream go one step further and allow you invest as
long as you have made a transfer (ie they don’t wait to receive the transfer).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Interesting</span></h3>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
PRENDING can be soulless but adding varied objects adds
interest to lending. My loans include
security against a Porsche, a portfolio of electronics, a Piper plane plus 4
paintings. Much easier to visualise rather than endless lists of bricks and mortar! <o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-23922449047567571072015-07-16T18:27:00.004+01:002015-07-31T19:23:24.327+01:00Saving Stream, Peer to Peer Lending Paying TWELVE PERCENT (12%) ! <div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgatW_hqk_N5XrTLp0k5zoOetzi-dHDqW265FiziIMUWO_ePtALZ29CvH6947LQ7dhc02IvVBbr21ITL73GQ18POCEmXDnMLwrjIpgQErf9Jb0ZVw13IduGzCNnZE4fUZIVzZUj8AL-lPkU/s1600/Saving+Stream+Logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgatW_hqk_N5XrTLp0k5zoOetzi-dHDqW265FiziIMUWO_ePtALZ29CvH6947LQ7dhc02IvVBbr21ITL73GQ18POCEmXDnMLwrjIpgQErf9Jb0ZVw13IduGzCNnZE4fUZIVzZUj8AL-lPkU/s1600/Saving+Stream+Logo.png" /></a></div>
<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>No fees<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Secured Loans <br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>Contingency Fund<br />
<br />
<br />
<br />
<h3>
<span style="color: #3d85c6;">Too Good to be True? </span></h3>
<br />
You might think so but their track record to date is pretty good. There have been no defaults so far. It’s well worth checking out what other lenders think by visiting the ‘Peer to Peer Independent Forum’ (you can find the link in the column to the right of this post). There is a specific area of the Forum dedicated to Saving Stream. <br />
<br />
<h3>
<span style="color: #3d85c6;">A lot to Like</span></h3>
<br />
There is a lot to like about Saving Stream. The platform is very simple and straight forward. It reminds me of the Ronseal Ad, ‘It does exactly what it says on the tin’.<br />
<br />
Minimum investment is £100 and minimum investment per loan is also £100. Loans are typically bridging loans for property, interest only and are 6-12 months in duration. The short term means that your money isn’t locked away for long periods. The 12% interest rate is fixed for every loan so effectively they have averaged out the rate to keep the platform simple.<br />
<br />
<h3>
<span style="color: #3d85c6;">Secondary Market</span></h3>
<br />
There is a secondary market where you/buy sell at cost (ie no markup or mark down). In practice, with the 12% rate, there are not many sellers. The secondary market offers a mechanism to spread your risk across existing loans. You’ll find new loans disappear fairly quickly.<br />
<br />
<h3>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxI17U9fBQltgafXqmAeb6XKdh1vm9BTqsRjdatPhcraErn2lmdpR8KrRta-D03W4QAlSu1L4hAebNf1yu_2nHIRX8zIcFwbNnQ7peYqR9w9GTIcPjmsSVF_cSo8x6jNoar5qdYWl6xHyq/s1600/download.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="143" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxI17U9fBQltgafXqmAeb6XKdh1vm9BTqsRjdatPhcraErn2lmdpR8KrRta-D03W4QAlSu1L4hAebNf1yu_2nHIRX8zIcFwbNnQ7peYqR9w9GTIcPjmsSVF_cSo8x6jNoar5qdYWl6xHyq/s200/download.jpg" width="200" /></a><span style="color: #3d85c6;">What If?</span></h3>
<br />
One thing to remember about asset-based loans, if the worse happens, a default, then you won’t get your money back for some time as the asset will need to be sold. You are also relying on the valuation being accurate.<br />
<br />
I would recommend Saving Stream, based on my experience so far, but do weigh the risks and spread your money both between loans and across other platforms!<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-20387428233193107482015-07-14T09:11:00.000+01:002015-07-14T13:46:53.996+01:00Advice for Peer to Peer Lending beginners wanting to ‘take the plunge’<i><span style="color: #3d85c6;">Question: 'I’m a PRENDING novice living in the UK – So where should I start with this Peer to Peer Lending thing?'</span></i><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1xC4L4d_UDtnLz9g6-_UKMFJWVyECu_Z6G3o5LQAx54dtJjaBzkXyIflp6clfQb3FqBV5NBFL5PRyIGKVBcvSsmC_dHwd5Uulmtk9DkV-d7z0kYqIW98eSjOai7P8AoiAHtjqi9Oe0-lo/s1600/interest+coins.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1xC4L4d_UDtnLz9g6-_UKMFJWVyECu_Z6G3o5LQAx54dtJjaBzkXyIflp6clfQb3FqBV5NBFL5PRyIGKVBcvSsmC_dHwd5Uulmtk9DkV-d7z0kYqIW98eSjOai7P8AoiAHtjqi9Oe0-lo/s200/interest+coins.jpg" width="200" /></a></div>
Well, Ratesetter is a great place to start because it gives a reasonable return, has a large volume of loans and avoids the complexities of having to bid for individual loans. It is also is relatively risk free and has a good track record. Here are the steps to get started:<br />
<br />
<ol>
<li>Join Ratesetter. It costs nothing and it only takes a few minutes to register online.</li>
<li>Once you have an account you can transfer your initial investment to the site from your bank account. I suggest something like £100 to test the water. </li>
<li>You now need to select a Term (length) for the loan and the interest rate you require.</li>
</ol>
<h3>
<span style="color: #3d85c6;">Interest rates</span></h3>
<br />
Here are the terms and the corresponding ‘Market Rate’ interest rates yesterday (13 June 2015):<br />
<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>1 month: 2.6%<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>1 year: 3.1%<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>3 year: 4.1%<br />
•<span class="Apple-tab-span" style="white-space: pre;"> </span>5 year: 5.6%<br />
<br />
Note that these rates are currently low; my average five year rate is around 6.0% and the 5 year rate has gone as high as around 6.7% in the recent past. Low rates suggest more people are lending, perhaps due to the Greek Crisis and the stock market turmoil? <br />
<br />
<h3>
<span style="color: #3d85c6;">Market Rate</span></h3>
<br />
Having selected the term of the loan, if you bid the market rate then your money will be invested fairly quickly, typically within 24 hours. If you specify a higher rate then it is likely to take much longer for your money to be invested and the exact time will depend how the market moves.<br />
<br />
That’s really all there is to it. You can either arrange to automatically reinvest the returned payments from the lender, so increasing your investment over time or allow returned capital and/or interest to be transferred to your Ratesetter ‘holding’ account.<br />
<br />
This is all very well, but supposing I need the money invested in the 5 year market back in a hurry?<br />
<br />
<h3>
<span style="color: #3d85c6;">Rapid Cash Withdrawal (liquidity)</span></h3>
<br />
With Ratesetter you can access your money on loan at short notice using the ‘Sellout’ function. Sellout will allow you to sell your contracts (loans) provided there is a new lender available to match your existing loans. I’ve never used Sellout and am content to withdraw my capital and interest as it becomes available to invest at higher rates elsewhere.<br />
<br />
<h3>
<span style="color: #3d85c6;">Alternative to Ratesetter</span></h3>
<br />
An alternative, if you feel the Ratesetter market rate is too low, is to invest in the Assetz Capital Green Energy Income Fund that returns 7% and you can normally withdraw your funds very quickly. This is mentioned in more detail in another post: <a href="http://prending.blogspot.co.uk/2015/07/assetz-capital-green-energy-income.html" target="_blank"> Assetz Capital Green Energy Income Fund</a><br />
<br />
<h3>
<span style="color: #3d85c6;">Higher Rates</span></h3>
Of course, once you've you are familiar with Peer to Peer Lending, you can earn far higher rates on sites such as Saving Stream or Money Thing. I'll be covering these platforms in future posts.<br />
<br />
Until then, happy lending!<br />
<div>
<span style="color: #3d85c6;"><br /></span></div>
<br />
<div>
<br /></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0tag:blogger.com,1999:blog-4201327217568820729.post-16431093313759157002015-07-11T17:32:00.000+01:002015-07-11T17:42:15.186+01:00An Introduction to Lending via Assetz Capital<h3>
<span style="color: #3d85c6;">Assetz Capital, Green Energy Income Account</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjx_Zl8u-Ylmxs4pfK0H5aOcrMg-f6SrNbrdkRNmy1yAWVzZTw6GB9spdUxbXGJO7qzu16oR71X7nk7oGPQRlHXDDaAKGdnRqCdZZaDRZTmh3GwzRRsHzogJ0laxPERs8IFO4c52TSWUxZ/s1600/capital_logo.jpg" /></a>The first Asset-based lending platform I tried was Assetz
Capital. In this type of platform the sum lent is secured against a tangable asset such as land, property or even at artwork or a plane. I built up my Assetz investment to
around £3000 with an average interest rate of 11%. This included £500 in their Green Energy
Income Account. <br />
<br />
The target interest of
this account is 7% and it is invested in a range of green products such as
windfarms. It also includes a
contingency fund to protect the lender from defaults. This fund appears to have high liquidity as
you can normally withdraw your money almost immediately (I’ve tried this and it
works).</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This fund is an attractive option for those who like to keep
lending relatively safe, have (hopefully) instant access and a good interest rate
(7%). This compares favourably with
Ratesetter where the five year rate is currently falling and today stands at
only 5.5%. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<h3>
<span style="color: #3d85c6;">Assetz Capital, Manual Loan Investment Account</span></h3>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The rest of my money is in the Assetz Manual Loan Investment
Account. You can browse the Loan Book
and buy any loans not fully invested. Interest
rates are typically 9% to 18% and the term of the loans are anything from 6
months (bridging loans) to 5 years. You
can also specify if you wish to increase or decrease the size of your existing
loans. This creates a secondary market
where you can generally get your money out or buy into new or existing loans as
they become available. Arguably there is
less risk of ultimate loss of capital as all loans are secured against assets
such as property. It is still prudent to
diversify and spread your money across the platform rather than putting all
your eggs in one basket.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
With Assetz you will find some loans are labelled
‘Investments Paused’. This means the
loan can no longer be bought or sold due to irregularities in borrower
repayments or a default. This currently
means that these funds are inaccessible to the lender. However the contract with the borrower often
stipulates that the interest rate then increases so you can hope that
eventually, even if the asset needs to be sold, you will be adequately rewarded
once the issue is resolved.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Note that there have recently been some misgivings from Assetz
lenders as to the number of loans that are ‘paused’ and I personally currently have
5 of my 20 or so Assetz loans paused. However,
this issue is currently being addressed by Assetz and I personally remain
confident in the platform.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I’ve more recently joined Saving Steam, Ablrate and Money
Thing and I’ll describe these platforms in future posts. <o:p></o:p></div>
Rik Ravadohttp://www.blogger.com/profile/04770122403731313803noreply@blogger.com0