Only six months after launching, peer-to-peer (P2P) lending platform Assetz Capital has lent more than £5 million to UK SMEs and property developers, making it one of the fastest-growing P2P platforms ever. Lending has increased exponentially, with £2m lent in September alone, leading the company to forecast that it will lend £100m by the end of 2014.
Unlike many loans provided by other UK P2P lenders, all Assetz Capital loans are backed by up to four pieces of tangible security such as first charges on property – this means that in the unlikely event of a borrower default, Assetz Capital will be able to recoup investor funds by taking control of these assets. To date, there have been no defaults; however, the anticipated rate of defaulting loans is 1.5%. Actual loss rate is anticipated to be less than half of this figure (0.7%) due to the tangible security taken for the benefit of lenders and thorough credit checks.
The P2P lending platform, which launched in March 2013, allows investors to earn returns of up to 18% per year (gross), with no lender fees. To date, the average return on loans is 11.8%, with no fees charged to investors.
Stuart Law, CEO of Assetz Capital, said: “I firmly believe that our approach to security is the reason why we have grown so quickly while attracting serious and high net worth investors. The peer-to-peer lending market is a serious investor proposition and businesses in the market need to develop exceptional security and credit models.”
Despite attracting many smaller investors who invest as little as £20 in individual loans to achieve a wide diversification of investment, Assetz Capital has also won the attention of high-net-worth individuals (HNWs) who have invested as much as £250,000 in well secured single loans.
One of Assetz Capital’s HNW investors Martin Roberts, stated: “I’m an experienced investor, and have been active in the stock market for years – I was also among the first wave of people to invest through P2P lending sites a few years back. However, since June, I’ve been taking a good deal of my money out of other P2P platforms and putting it into Assetz Capital. There are two main reasons why: firstly, it’s down to the quality of the loans listed on AssetzCapital – they have high returns matched with high levels of security and detailed credit reports for each one. Secondly, I’m confident that if an Assetz Capital loan does default – although there have been no defaults to date – the company has the senior lending team to do what needs to be done to recover any losses – I’m not convinced that other providers have the same capacity.
“I’ve got a diverse portfolio – including money invested through various peer to peer platforms – but if the loan quality remains high, my intention is definitely to increase the amount I have invested through Assetz Capital.”
The company provides fully transparent information on borrowers, including credit reports, independent valuations of property and financial history, and the team also visit borrowers personally on-site before approving a loan. Solutions to finance for businesses can vary depending on their need.
Chris Clark, owner of Kris Cruisers, a Datchet-based pleasure cruise company and one of more than 20 borrowers to have received a loan from Assetz Capital, commented:
“We’ve been trading for 47 years and had what I thought was a great relationship with our bank – we’ve never missed a payment.
“However, when we needed to refurbish some boats on our fleet, our bank abandoned us. We had no explanation from them; they just didn’t want to know. Fortunately, Assetz Capital were able to step in and provide us with a loan of £50,000 on good terms – it’s helped us to get through what would have otherwise been a very difficult period, and we’re thriving after the funding has helped us to update our fleet.” Kris Cruisers borrowed £50,000 at 9%, secured against a mortgage charge and the amount lent by individual investors ranged from £200 to £9,000.