Proplend year end accounts

Some of my observations on the comments you made:

1.  Net earnings for 2019 was £239k loss vs £692k loss for 2018 (disclosed in the Statement of Changes in Equity).  So losses were narrowing as business continued to ramped up.  The loss was funded by an equity injection of £288k.  Year-end liquidity looks reasonably good with cash of £178k and limited creditor balances.  Overall, their financials look ok given they still in a growth stage.

2.  I agree - audited financials always provide a higher degree of comfort.  In the past, FSA/FCA regulated entities were required to produce and file audited accounts with the regulator.  These requirements have probably been relaxed in parallel with the dispensation smaller companies have in relation to having accounts audited.

3.  Late filing of accounts, providing they are filed before the 12 month deadline, should not necessarily be viewed as a negative.  It is fairly standard practice to publicly file accounts as late as possible as any financial info will be viewed as commercially sensitive.  The usual view is that you want to limit financial info in the public domain.  However, late filing of accounts after the 12 month deadline is a big red flag that should set-off alarm bells - not the case here.  It is a bit unusual that they only signed off the accounts relatively recently rather than having them signed-off earlier and just deferring filing.  However, I don't think it is particularly concerning as the accounts aren't audited.  If they were audited, it would be a red flag as it would almost certainly indicate delays, for whatever reason, in the auditors being in a position to sign-off their audit opinion (Wirecard comes to mind!).

Overall, I think their 2019 financials are comforting showing that profitability was continuing to improve and that they were in a reasonable financial position going into 2020.  No doubt the events of 2020 would have had an adverse affect on profitability in 2020 given reduced loan volumes.  However, deal flow now seems to have restarted and their loan book has been very resilient to date - it has performed a lot better than I had expected.  The other positive is that underwriting standards seem to have been maintained.  In my experience, falling underwriting standards are a big red flag and are one of the earliest warning sign that a lending platform/business is in trouble (that and a deteriorating loan book).  Providing the general credit environment is such that credit remains very loose and liquid such that refinancing risk remains low, I think PL will be okay and in my view is one of the better run platforms.  I pulled all my money out of PL (and all my other P2P investments where liquidity allowed) back in March, and PL has been one of the few platforms I have been comfortable reinvesting funds on.