MoneyThing vs SavingStream compare and contrast

Here's the points that spring to mind - I would suggest having a read of the various posts pinned at the top of the SS board, particularly the FAQ, and MT board, no FAQ yet, plus whatever else catch your eye. They are quite similar in many ways so probably worth signing up for both and seeing which you like best

MT

Pros

Excellent customer service, very responsive to lenders & reactive to suggestions
Partner loans with buybacks for defaulted elements.
Wider range of asset classes for diversification, not exposed to downturn in one sector eg property
Loans with 6 month terms which provide a break point for lenders or chance to roll
Bid limits on new loans
Active SM and interest paid while loans are for sale
Very fast actioning of deposits/withdraws
Simple website and operation
Loans end/roll when expected (so far)
No losses to date
Large number of loans with low LTV
Loans to same borrower identified

Cons

Smaller loans so less scope for large holdings
Funds have to be available to invest
No prefunding so have to be available at loan launch (4pm) to guarentee a slice
Small loans are FFF, particularly rollovers, and SM
Interest not upfront so slightly more risky
Hard to diversify due loan flow and tendency for exisiting lenders to retain positions in many loans
No provision fund
Lending to MT in first instance on many loans (trust structure coming)
No default history
Cant sell on SM till loan filled
Multiple loans to same borrower, so potentially significant exposure in the event of default


SS

Pros

Invest now pay later system so available funds not required to invest
Prefunding so not required to be present at loan launch, guarentee to be allocated part of loan
Larger loans so possible to invest larger sums
Simple site, simple proposition
Quite responsive to enquiries
Provison fund - discretionary
No losses to date, successful recovery of defaults
Normally liquid SM
Interest retained upfront so payment almost guarenteed during normal loan term

Cons

Gaming of prefunding can affect allocations on some loans
popularity means small allocations on some loans
Loans tend to overrun
SM can be hard to buy on in times of scarcity
Communication probably not as good as MT, loan updates can be a little vague or optimistic
Captcha on SM
No interest on parts listed on Sm if they sell
Deposits/withdrawls slower than MT
No sales of loans within 7 days of purchase if account negative
Difficult to identify loans to same borrower
All property so downturn would potentially have an impact across entire loanbook

One difference is MT pay interest on each loan when its due, SS at beginning of month

I would say that if you're putting much store in a provision fund to fix future problems in these sorts of loans then you're probably missing the bigger picture. Also MT has other elements to consider, such as Broadoak's 5% first-loss stakes in the BPF loans. I'd suggest you spread your money across multiple platforms and multiple loans (the better looking ones).

Broadoak Private Finance Ltd (BPF) is a partner of MT. They offer property loans to lenders using the MT platform and take a 5% first loss if one of their loans defaults.

Some of us (not all of us) think that a PF is mainly a marketing tool. Any money in a PF is lying idle when it could be earning the platform 18% and lenders 12%. It can only be funded by lenders however indirectly so if there was a payout they would only be getting their own money back. It may give lenders a false feeling of security.

I would say the major benefit of MT when compared to SS, is that the loans are not solely in property.

Ticks one of my diversification boxes.

Prior to April last year provision funds had a tax advantage particularly for higher and additional rate tax payers as capital losses were not deductile against interest. They now are.  Provisions funds now only make sense on portfolios of lots of small loans (e.g personal loans to consumers such as thse written by zopa) and not large loans (such as written by most other platforms) where a single defaulting loan would have a major percentage impact on the provision fund balance.