Review of Assetz Capital (AC), Funding Circle (FC), and ReBS

Of the 3 business lenders reviewed I will stick with FC.

Rebs:

  Pro - Higher interest rates?

  Have you mentioned the quality of the loans? The top business currently on offer has a director who has previously been declared bankrupt. Now, why would these loans go out at 15 - 18% when FC loans to similar companies would cost perhaps 12 - 14%?

  In short they have a few high risk loans on offer from some not very appetizing looking companies and I cannot see them growing to become a significant market player.

Assetz:

  Clearly a highly professional business lender. My main concern remains the complexity of the offer, and the potential of a slow exit for certain loans. While they are addressing some of this though automation of investment accounts I still see them as targeted at a more sophisticated lender. The tie up with venture capital is interesting. The first P2P Investment Trust (Global)  is currently at an 18% premium, but I would consider an investment trust solution at a lower cost, and pay a decent fee to have a simple entry and exit route while still capturing a good income.

Good old FC

  They have justifiably had some stick on this forum. The website is appallingly inefficient and the account management resembles a 2 year old with a pile of marbles, sometimes the marbles roll in the wrong direction. So why do I stay?

     Firstly my returns after losses, fees and accounting mishaps are > 10%

     Instant deposits by Debit Card

     There is large deal flow so there are almost always interesting loans available

     Exit is quick and easy. All my loans are sold within 6 months, usually at a small premium. Loans listed at par normally go within 24 hours. After about 18 months building up my investment, profits from loan part sales just about cover  
     losses and fees     


Finally a comment on my portfolio management, which is designed to supplement my pension income

16% Ratesetter @ 5.8% ave return
10% Zopa        @ 5.0%  ave return (repayments are being withdrawn)
  4% FC           @ 10 to 12% (I expect this to rise to 6% before fear overtakes greed)

The rest is in an equity/bond portfolio and Traditional FSCS protected accounts. New money is split between a savings account paying 1% (for security and instant access), RS and FC to provide an income boost.