Borrower defaults 2 months into a 60 month loan.....

I'm currently averaging 8.47%, 8.51% and 8.88% on three different AC manual invest accounts. Haven't experienced any defaults yet, but it's fairly early days for me (started on 1st March this year). I feel that 7-8% is achievable.

Ah, fair point. Sorry! But if there are problems AC is not the quickest at recovery.

On a more general point lending to SMEs is inherently risky. Historical financial performance can look good, current trading can look good but a major client can cancel an order and ruin is imminent. And most SMEs are dependent on a small number of large customers. We are at the end of a recovery cycle that started in 2009. Defaults will increase in the coming months and years.

In the early years it was their practice to compensate lenders for any loans which failed to make a single payment, and then to take such recoveries as they could. It was never part of the T&Cs, nor tied to any particular reason for the default. It was once mentioned on their website as policy. However it was always ex gratia. In those days they relied on keeping the confidence of manual lenders.

They stopped the practice, say, four years ago. They found they did not need to do it. Personally I think that the refusal to compensate for crappy scrappy (whose details I will not repeat) confirmed that in the future no loan would be refunded by FC.

This just one small change of many which mark the transition from a p2p intermediary to a lending bank, where the investors are not supposed to take an interest in the individual loans.

I'm sorry but this is not the case with most of the bad loans I am seeing.  It is nothing to do with economic cycles, blah blah blah.  It is a lack of common sense and diiligence in the lending process.  I have one where they lent £350k to a business in Scotland that claimed to be doing TV repairs.  I could not believe such businesses still existed, so dug into it.  It operated out of a literal shack, I can see it on google streetview.  Like a lean-to building.  Why would anyone need £350k to do TV repairs?  Surprise surprise it went into liquidation with all the money.  This is NOT unusual.  It is nothing to do with economic cycles.  It is bad lending, pure and simple.

loan #62308 N*rth *ast Br*wing comp**y L*****D classic case of not checking


Borrowed £79,500 in August 2018 at 10.9%, in July 2018 Credit score dropped from 60 to 40


In September the company put up for sale to try to cover it's debts and failed.


Administrator appointed 26 June 2019


Administrator says, in 2014 directors setup a sidearm to business and spent 2-3 years working on it, during this time company lost £300,000 in turnover.

Business in a precarious financial position !

September 2018 tried to find investment and couldn't, the company was put up for sale to try to cover it's debts and to get buyer.

my calculation is that Unsecured creditors will get back about 15%

2 months after this is filed at CH we get the following update from FC

The borrower has remained unresponsive and we are now looking at the possibility of instructing third party field agents to visit the business so we are able to establish a true refection on the business situation and see if we can help in any way. We will keep investors updated with any decisions and thank investors for heir patience.

you couldn't make that up "Help in any way" :- what lend them some more money, FC they have gone bust Equipment etc all being ( or been ) sold by administrator this update is a crock of .

MY argument with this one is any DD should have spotted company in trouble before lending.