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Post by khampson on Oct 19, 2016 9:38:36 GMT
Hi, I have not had any investment or involvement in funding circle for over 3 years, I know a lot can change in this time, I see they have moved onto fixed rates, when I first started using fc I achieved over 8% on my investment, now I am in a position to invest again and I am looking at possibilities into returning to fc, however there are a lot more platforms and wondered if fc is still worth considering, I am unsure what returns are available around here now and if brexit will have an impact on small businesses here when we eventually leave the EU, what are the current returns at fc and is it still worth considering after my time away.
Thank you Keith
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Post by Deleted on Oct 19, 2016 9:48:04 GMT
Keith, hi, I seem to have started on P2P just after you stopped.
Initially I found FC very attractive but have been cashing out slowly since the change to rates. I don't like the new system and I think it undercosts the risks involved and charges the lender too much.
I would recommend you look at MThing
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markr
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Post by markr on Oct 19, 2016 10:02:29 GMT
My short answer would be yes, but I know it's possibly not a majority view around here. Better rates are available elsewhere, and the website still has the quirks it had 3 years ago, but they can't really be beaten for loan origination. I'd say platform risk was lower, as an established player with institutional and government investment, than some of the newer platforms.
Beware the SME loans rate bands and ideally do your own research on companies or at least look at the FC financials, and the current big moan is property loans being allowed to run very late with no penalty interest, so your funds may end up tied up for longer than you thought. But it's easy to quickly build a well diversified portfolio and the secondary market is fairly liquid.
Don't look at E band loans, and use caution when buying on the secondary market, as there are quite a few bots snapping up the best stuff (also an advantage if you want to sell though, offer more or less anything at a tempting enough buyer rate and it's snapped up instantly). And, as ever, don't use Autobid!
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Post by Deleted on Oct 19, 2016 12:24:05 GMT
Absolutely 100% NO! Don't give a penny to FC!!
FC has become an (unofficial) institutional investment fund with consumer lenders fed with the rubbish not wanted elsewhere, mostly listed all with A-rating and without any proper due diligence. Also the 'secure' arm of FC, their property loans team, is a total embarassment for the Sector, with 190+ days late loans not paying a penny in interest for 220+ days and counting (not defaulted of course, not to ruin the nice external fake FC image built with their own stats).
Look around for serious secured loans company: FS, SS, MT, CL are just a few good P2P secured loans company names working well at present.
Target 10% returns. It is feasible today.
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Post by Deleted on Oct 19, 2016 12:41:54 GMT
My short answer would be yes, but I know it's possibly not a majority view around here. Better rates are available elsewhere, and the website still has the quirks it had 3 years ago, but they can't really be beaten for loan origination. I'd say platform risk was lower, as an established player with institutional and government investment, than some of the newer platforms. Beware the SME loans rate bands and ideally do your own research on companies or at least look at the FC financials, and the current big moan is property loans being allowed to run very late with no penalty interest, so your funds may end up tied up for longer than you thought. But it's easy to quickly build a well diversified portfolio and the secondary market is fairly liquid. Don't look at E band loans, and use caution when buying on the secondary market, as there are quite a few bots snapping up the best stuff (also an advantage if you want to sell though, offer more or less anything at a tempting enough buyer rate and it's snapped up instantly). And, as ever, don't use Autobid! Well, mark says: - don't trust FC Due Diligence - don't use their property loans (as they mostly run late with no penalty interest) - don't look at E-loans - don't use Autobid Well in that case, it is really best to avoid them alltogeter!
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blender
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Post by blender on Oct 19, 2016 12:57:05 GMT
If you take the 10% property loans and sell before the penultimate repayment then you can get just under 9% net, with safe interest, security and liquidity. But you have to be a serious diversity criminal, and there are no guarantees. Otherwise I think it's autobid and under 7% on average, or the trust of course. What we need to do better is the IFISA.
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kt
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Post by kt on Oct 19, 2016 13:00:12 GMT
Be aware of the increasing instance of loans to pay off previous loans. In effect borrowing from Peter to pay Peter.
There is a growing issue with this, mainly around the property loans. Each new loan lowers the LTV and at some point there will be a crossover as the housing market appears to be cooling.
KT
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fp
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Post by fp on Oct 19, 2016 13:05:41 GMT
Simple answer to the original question.... No.
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blender
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Post by blender on Oct 19, 2016 13:29:26 GMT
Be aware of the increasing instance of loans to pay off previous loans. In effect borrowing from Peter to pay Peter. There is a growing issue with this, mainly around the property loans. Each new loan lowers the LTV and at some point there will be a crossover as the housing market appears to be cooling. KT That is true, kt, but the interest is pre-funded and FC are not going to discover their error in LTV until the end of the term - by which time the canny lender will have jumped onto a younger fresher loan (at 10%). I will let you into a secret - the security on the SME loans is rather worse.
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Investboy
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Trying to recover from P2P revolution
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Post by Investboy on Oct 19, 2016 15:35:57 GMT
I use it as part of my P2P portfolio. I try to avoid property as I get "better" deals 11%-13% elsewhere. FC gives me some exposure to SME spectrum of loans.
I'm not a sophisticated investor. Try to do a very basic filtering looking at the figures if they can afford the loan, buy small chunks 20-100 max and hold to term.
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fasty
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Post by fasty on Oct 19, 2016 16:23:18 GMT
I used to have fun playing with the auctions before rates were fixed, and achieved a good return that way. Now the loan ratings seem to have become more... "optimistic" and several of the property loans I have invested in are hideously late, as discussed elsewhere. I was hoping that FC might improve their web site and late payment management, but they seem unable or unwilling to do so. So now I'm gradually diversifying away from FC to other platforms such as SS as good opportunities arise.
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markr
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Post by markr on Oct 19, 2016 19:34:52 GMT
- don't use their property loans (as they mostly run late with no penalty interest) Not exactly. *Some* run late, but also some repay early. As with any platform, take the estimated end dates of bridging and development loans with a pinch of salt, don't put next year's holiday spending money on a 6 month property loan! - don't look at E-loans More a fault of bots than FC, the effort required for humans to acquire a well diversified E portfolio just isn't worth it.
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Post by jackpease on Oct 21, 2016 6:59:24 GMT
I've got a lot of money invested in FC and a lot of diversification and havn't used autobodge. I have not subscribed to the fashionable FC bashing because of the rate drops/optimistic ratings etc as in the end most of the platforms can be accused of that. Many moan about FC when their initial euphoria gets clobbered by defaults and not waiting for the slow clawback of recoveries to see through the cycle. But....
In the last few months SME defaults have been piling up and there is no pattern to those defaults so really scratching my head that it is possible to beat the system on SME loans.
As my total balance today (after yet another black thursday yesterday) is the same as three months ago I think the answer to your question is sadly no - but it is hard to spread money about in non-property p2p loans these days without maxing out on platform personal limits
jack P
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r00lish67
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Post by r00lish67 on Oct 21, 2016 7:44:25 GMT
I've got a lot of money invested in FC and a lot of diversification and havn't used autobodge. I have not subscribed to the fashionable FC bashing because of the rate drops/optimistic ratings etc as in the end most of the platforms can be accused of that. Many moan about FC when their initial euphoria gets clobbered by defaults and not waiting for the slow clawback of recoveries to see through the cycle. But.... In the last few months SME defaults have been piling up and there is no pattern to those defaults so really scratching my head that it is possible to beat the system on SME loans. As my total balance today (after yet another black thursday yesterday) is the same as three months ago I think the answer to your question is sadly no - but it is hard to spread money about in non-property p2p loans these days without maxing out on platform personal limits jack P Quite a few on this forum (myself included) seem to have made the journey from SME loans on Feeling Constrained over to asset-backed loans on other platforms. I think they only make sense if: a) They offer a 12%+ gross return before defaults b) The lender performs his/her own DD on the financials and 'gut feeling' about the loan summary. c) Ideally, there's a prospect of being able to sell on down the line if the loan becomes less attractive. FC now only offer a) in the 'D' and 'E' category, which seem to be becoming rarer than hen's teeth. Regarding b), the loan quality of FC's non-property A+/A's often appears atrocious these days, so a peg on the nose is always inevitably required for D/E's. You can at least do point c) on FC, if you manage to get a reasonable spread of loans to begin with to diversify, but you can't due to points a) and b). So, a bit futile really! Even after all of that, why bother if you can source loans with some actual asset backing elsewhere? Does anyone make a reasonable return elsewhere for pure SME loans? I have an account but no significant involvement with REBS, and the less said about LC the better. *Edit* - to answer my own question, I do use AC's GBBA 7% fund and invest in Ratesetter, so perhaps the other element I've missed here is the backing of some sort of provision fund. So I refine my question to be "does anyone else make a reasonable return on another platform on SME loans without a provision fund of some sort" And apologies for hijacking the thread with my own question :-)
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blender
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Post by blender on Oct 21, 2016 7:55:16 GMT
I'd say no. The only thing in FC's favour is that they are huge with a fat pipeline so they can afford all their staff and costs and should be around for many years to come whereas some smaller outfits might fall by the wayside in the next few years. I was lending on FC from 2010 till recently where I was lending on over 400 loans. I wasn't particularly clever at lending and tended to buy any old thing, usually off the SM. My XIRR was 7.16% which wasn't too bad for stuff all effort. I've moved all of it (except for a 'stuck' 1%) off the platform now to SS. I'm getting a much better XIRR on SS. If you look at Samir's recent presentation at lendit you'll see it's all about institutional money and "securitization". I don't see any future for individual lenders at FC. Totally agree with the point about ordinary lenders being taken advantage of by bots. Right about the size of FC, but the really important test is whether FC's model can make a return on just the fees, while giving the interest to the lenders. Doing everything within 1% of the size of the loan book , plus borrower fees as a reducing percentage of income, requires the volume but will be very tough. Quite right about individual lenders if the cost of servicing them - customer admin and service cost and regulatory compliance cost etc - cannot be kept down. I have long thought that the next step would be to remove the manual choice on the partial board, and the high maintenance lenders who come with that, and allow only Autobid and Autosale. I had expected that for new IFISA accounts, but it seems FC still need us for some of the property. Agreed the individual lenders will have to go, except perhaps the 'investors' through Autobid. It could be presented as 'fairer' - a word which means leave right now to most of us here.
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