Why invest anywhere else?

Yes, its absolutely brilliant - until the music stops.

Property investment depends on the planning and development going to plan and timely and profitable sales.

Now if you are getting 12%, the borrower is paying somewhat more. Any delay in completion or sales could then lead to default. Fine, the lender now owns the asset, but there is then the problem of taking the legal charge and selling it on.

I am risk averse, I do not like uncertainty, delayed payments etc so have concluded SS (and most other P2P businesses) are not for me, even as a small part of a balanced portfolio.

I am intrigued that Wellesley offer savers much lower rates yet are lending into a similar market (presumably the loans are at lower rates). I am not in any position to speculate on this.

Wellesley runs a provision fund which has over £1.1 million sitting in it, so maybe this is a factor re: the last point raised?

I for one have severely limited my investing in SS simply because of your lack of the security provided by a Trust company or the equivalent. Currently we (the investors) are putting our trust in the ongoing success of Lendy but if anything went wrong with Lendy or its shareholders or directors we could all be whistling in the wind for our money. This is not just my view but is shared by many other of your current investors and other potential investors as well. To underline this fact, I spoke to three different investment clubs before Christmas about P2P lending and whilst many were happy to invest in other P2P providers they were nervous about invest in you for the above reason.

If you could sort this matter out I think you could see your business grow at a very much faster rate. You have a good model and a system that is among the easiest to use. All you now need is the missing security.

I must admit I am not too interested in a Provision Fund. After all we would end up paying for it one way or other just like any other "insurance".

When I took my first tentative steps into P2P lending, my first investment was with Wellesley & Co. and the existence of a provision fund was reassuring to a novice investor like me and that's what led me to go with them. Since then I have invested more widely, including in SS, but I have limited my investments with SS and still spread my money about. I like the simplicity, liquidity and ease of use of the SS platform, above all others, and any provision that offered a bit more investor security (a 2nd line of defence if you like, which could be called on if the security didn't cover the loan and costs in the event of a loan going bad)  might well tempt me to invest more. Wouldn't that mean we weren't so reliant on Lendy making good any loss that could occur?
But I'm not expert enough to comment on the appropriateness of a separate, ring fenced, provision fund in relation to the SS model but I would have thought such a provision pot might attract new investors who are currently a little nervous.  

Steerpike, 

    Ratesetter is by far my favourite P2P with about 46% of my P2P allocation.  Zopa is next with about 36%. Zopa should be a nice safe bet, but I am annoyed by just about every part of their loan system, especially the uncertainty relating to rates (I am pulling out repayments after getting 4.6% on 5 yrs not the target 5.1).  The balance is in FC which, for all its faults, is entertaining and currently providing a 13% return after fees and defaults. It takes a lot of work, but I have a lot of time.  I have pulled out of Funding Secure, am withdrawing from SS and will not be investing further with Wellesley as bonds mature. I would stress that I have not had any losses or problems with the latter three, I just want to manage my risk out of property and simplify my portfolio. 

If savingstream can achieve this, and continue to attract enough borrowers to satisfy their investors' needs/wants, I think they'd be on to a real winner.

One thing I would add regarding the usefulness of provision funds, however, is that they work most effectively when the platform has a large number of loans outstanding.  At the moment, SS have just 18 loans -- ignoring the boat loans that will be gone from the portfolio as they mature and are not rolled over in the coming few months.  A 2% fund may be perfectly adequate for a platform such as Zopa, with tens of thousands of loans outstanding, and where the largest loan they make (£25k, I think) is less than 0.4% of the size of their £6.8M fund.  (I don't follow RS, so I don't know what their comparable numbers would be.)

By contrast, SS have £11.17M of PBL loans outstanding (including those not live yet and those not completely funded), so a 2% fund would contain £223k.  The largest SS loan is for £2.084M, which would make it more than nine times the size of their proposed fund.  I accept that Zopa loans are not secured and SS loans are, and that makes a big difference, but it still illustrates how a single SS failure could severely -- or completely -- deplete a 2% SS fund.

Still, even a small bit of additional protection would be an improvement over what we have now, and with any luck SS's loan portfolio will continue to grow and diversify, which would decrease the likelihood of a single disaster wiping out the fund.  Having said that, though, it's much easier for a platform like Zopa to increase the number of loans outstanding because the term of their loans is so much longer, with most being in the 3-5 year range.  With nearly all SS loans being for six months, the turnover in the portfolio is high and a fair number of new loans are required just to maintain the amount outstanding.