There are now just under 30 active peer-to-peer companies within the UK. In five years time, how many of these will actually be around? What will cause one site to survive when another does not?
If this was a simple question then there companies such as Quakle and YES-secure would still be around. We can look into individual cases and come up with answers, but those answers wouldn't address the finer points of what makes a successful site.
It is fairly obvious that in order to be know, a company will need to publicise itself. With high profile management or backers this is a lot easier to do than if the management team are less well known. This can be seen with the press coverage that Money&Co have managed to achieve considering they are yet to go live.
Being listed on sites such as the P2P money website will certainly attract additional publicity. Appearing on the P2P money comparison tables, which have appeared several times within the national press, will certainly help.
Publicity will certainly give a company a big boost, but if they don't have a good product then customers will go elsewhere. RateSetter has been very successful because it offered a simple, easy to undertstand product. Their rates can be lower than some of their competition but lenders have been attracted by their provision fund which offers additional security.
How a company is perceived will greatly affect how successful it is. In the peer-to-peer arena this is especially important, as lack of confidence with lenders or borrowers can kill any business, and this is perhaps the attribute that has affected the majority of the peer-to-peer failures.
When a certain peer-to-peer company launched, they were up against Zopa, who were - and still are - hugely successful. This new company started to do the right things with publicity and they had a decent product. However when they started commenting on their own product on various forums, including Zopa and LoveMoney - pretending to be lenders - this gave prespective lenders a negative perception of the company. Were they that desperate to try to get lenders? This company also ran a forum, and when they started deleting any negative comments and changing posts to put the company in a good light, a lot of lenders - including myself - lost faith and simply stopped lending. This was the beginning of the end, and this was probably only a few months after a positive launch.
If we look at the leaders within the UK, which are Zopa, Funding Circle and RateSetter, lenders will know they all have a good product, they are good at publicising themselves and all have operated reward schemes, and they are perceived to be trustworthy. Upcoming peer-to-peer companies should take note!
True to their word, Funding Circle have low launched their first property loan today. This is an A+ risk band with a first charge on the property as security. The interest rate is fixed at 8.5% for lenders, but Funding Circle are offering 2% cashback on this. Lenders should act quickly as the loan in being filled at a rate of £70,000 per hour!
Here is the email Funding Circle sent on Friday:a rate of
Following Tuesday's email where we provided details of our first formalised property loan, we're pleased to tell you that this loan will be listed on the marketplace on Monday, 14th April.
We had hoped that "Property Investment in Surrey" would be available for you to lend to this week, but, due to a delay in receiving local searches on the property title from the local authority, we have decided to wait until the start of next week. We have now received the local searches, completing our due diligence for this loan.
We look forward to listing this loan on Monday and answering any questions you may have. And as a reminder to celebrate we’re offering 2% cashback* on your lending to this loan. Happy bidding!
RateSetter, the 3rd largest peer-to-peer provider in the UK, is now expanding into Australia. RateSetter launched the concept of the provision fund and has facilitated loans of £208million to date. This move follows Funding Circle's expansion into the United States of America in 2013.
RateSetter will become only the second peer-to-peer provider in Australia, following SocietyOne, which launched in August 2012.
Here is the full press release:
RateSetter - one of the founders of the pioneering peer-to-peer sector in the UK – will expand its operations to Aussie shores in 2014 as the stepping stone to further launches in Asia.
It is also exploring launches in association with financial services partners closer to home in Europe.
Building on its UK success, in which it helped to create the Peer-to-Peer Finance Association, RateSetter has secured investment of $3m from local and international investors to kick-start its offering from its Sydney offices.
Headed by Daniel Foggo, a former banker with Barclays Capital and NM Rothschild in Sydney and London respectively, the company will be the only Australian P2P company offering market-beating savings rates to individuals who lend funds on its platform and accessible loan rates to everyday borrowers who are tired of banks’ hidden fees and profiteering.
RateSetter will go live in Australia this summer. It will be the first P2P lender in Australia to be fully regulated from the outset, allowing all Australians to participate on its award-winning platform, not just professional investors.
RateSetter was also the first P2P lender to launch a ‘Provision Fund’ – the largest in the UK at £3.8m – to help protect savers’ funds in the event of a borrower default. Many other platforms have followed but none can match RateSetter’s track record: every one of its 11,000+ savers has received every penny of capital and interest owed to them in the last three-and-a-half years since its launch. In March 2014, RateSetter also received the largest monthly inflows in the UK P2P sector.
Rhydian Lewis, founder and CEO of RateSetter, said: “When looking at international markets in which to expand, Australia was the obvious choice as it bears great similarity to the UK before the advent of P2P lending. Its saving and loans industry is ripe for disruption as banks have been offering below-par deals for too long with little true competition.”
“We have decided to focus on strategic growth markets such as Australia, which is a natural stepping stone to the huge opportunity in Asia. Targets closer to home on mainland Europe will not be overlooked, however, and initiatives there are already in train.”
“We want to empower savvy savers and borrowers by putting them in control of their finances through a simple, fair and flexible method of saving and borrowing. We hope they will follow in the footsteps of thousands of UK customers who have realised there is no need to take crumbs from the table of the banking industry when you can have your cake and eat it!”
Daniel Foggo, Chief Executive of RateSetter Australia, added: ‘“I worked in banks in the UK and Australia for over a decade and knew there had to be a better way to provide customers with a better rate and a better experience. When I met RateSetter, it was clear that is what they were doing and that Australia would be the perfect market for them to expand their international footprint. This offering will be extremely popular with everyday savers and borrowers, who are crying out for the advances seen in the UK P2P market.”
RateSetter’s unique approach has led to widespread industry and customer accolades in the UK, with the company winning MoneyNet’s 2014 award for Best Peer-to-Peer Savings Provider, Credit Today’s 2013 award for Alternative Lender of the Year and most importantly Moneywise’s 2013 customer voted award for ‘UK’s Most Trusted Loan Provider’. RateSetter is also the most highly rated personal loan provider in the UK according to ReviewCentre.com, the leading independent UK consumer review site, with 99% of 619 customers saying they would recommend RateSetter to others – the highest of any financial service provider.
We wish RateSetter well down under!
Funding Circle, already offering a 1% cashback on all loans over £75,000, are now going to be introducing 2% cashback on a new commercial property loan. The loan is at a fixed rate of 8.5% (before fees) which is comparable to the average lending rate in the A+ (lowest risk) market.
Here is a copy of the email from Funding Circle. We have redacted the partnership name, the address and the link to the loan details, as this information was only shared with registered lenders.
Thank you for registering your interest in property finance loans at Funding Circle. As promised when you signed up, we have provided the details on the first formalised property loan going onto the marketplace. It will be listed this week.
Property Investment in Surrey
The partnership has owned and let the property for 54 years. The owners are now looking to borrow £265,200 to refinance a bank loan and release £64,000 in equity. It is a commercial investment loan with a 8.5% fixed rate (before fees) meaning that these loan parts will be auctioned on a first come, first served basis. You can download the full investor report [link removed], created by Funding Circle’s credit and property specialists.
Key features of the loan:
- A+ commercial investment loan
- 8.5% fixed rate (before fees)
- 36 month loan term, with a 15 year amortisation schedule
- £265,200 loan value
- 36% Loan to value
- Property located in Surrey
- Owned and managed successfully by same landlord for 54 years. No significant period of tenancy vacancy to speak of
- Current 2 main tenants have been in place for 10 and 20 years respectively
- First charge security on the property
- The monthly repayments will consist of interest and partial capital repayments, with a lump sum repayment of the balance at the end of the loan term
- Cashback at 2% for investors
Autobid will continue to bid on all available loans on the marketplace, and should be turned off if you do not want to bid on these loans.
The Estonian peer-to-peer provider isePankur has announced it is to rebrand as Bondora. Here is the email that was sent to customers this morning:
During the last 5 years, more than 70,000 borrowers from 4 different countries came to isePankur seeking investors. Finally, our rapid development left no room for the brand to accommodate our further cross-border expansion. This is why today we are launching our new brand name - Bondora.
Like isePankur, Bondora continues to be a platform where you can apply for a loan, which is quick, secure and is optimal for you. The new brand name will cause no changes to your account, as you will be able to continue making repayments with the same email address and password on our new website www.bondora.com. Our old website www.isepankur.com will remain active for a limited time.
If you haven’t found financing previously, Bondora today has more investors than before and offers even simpler and more straightforward loan application process.