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The overall look and feel of the site is quote impressive, but with any financial institution it is the detail that really counts. Money&Co have a detailed information on the site within a FAQ section for both lenders and borrowers. As for costs, lenders are charged a flat 1% fee, like Zopa and Funding Circle. Borrowers are charged a £150 application fee and a completion fee of between 1.5% and 5%, whereas Funding Circle charge a completion fee of 2% to 4%, so these fees are comparable.
The loans are split by risk rating, using the categories A+, A, B+, B and C+. The A+ category is the lowest risk with an estimated bad debt of 0.5%, and C+ category being the highest risk with an estimated bad debt of 1.5%. While the FAQ does not state if these are annual or lifetime estimates, we have confirmed that these are annual figures. With a C+ category loan having an estimated bad debt rate at only 1.5%, it would equate to an A category loan on Funding Circle.
Funding Circle are currently performing better than their bad debt estimates, but with an immature and growing loan book, their bad debt will increase over time. Of the three peer-to-peer companies that exceeded their bad debt estimates, only one is currently still operating!
The difference here with Funding Circle is a little surprising, but as Chris Lake, Chief Lending Officer at Money&Co explained, they are targeting prime borrowers that can obtain finance from banks currently.
There are currently four loans on Money&Co, of between £100,000 and £1million, with the auctions closing in just less than 3 weeks. Chris Lake explained that Money&Co would be able to fill these loans through their extensive contacts of high net worth individuals and the "crowd". There are already some bids of £10,000 on some of these loans, along with bids down to £10.
The account summary screen is very clear and well presented like the rest of the site. The bidding screen is a little bit harder to use, with lenders having to click the up and down arrows to change the lending rate by 0.1%. While there appears to be no upper limit on the lending rate, the lower limit set to 1% above the estimated bad debt.
Money&Co have joined the UK Crowd Funding Association (UKCFA) rather than the larger P2P Finance Association. The term crowdfunding is used extensively on the site, while there is no mention of the term peer-to-peer. This may be confusing for established lenders who would recognise peer-to-peer lending. There have been several discussions on the correct terminology and while crowdfunding has been used as a generic term for both equity and debt crowd funding, peer-to-peer lending or crowdlending is the generally accepted term for debt crowd lending.
Overall we are quite impressed with the Money&Co site, but they are up against the likes of Zopa, Funding Circle and RateSetter who have 90% of the market share, and also competing with new companies such as Wellesley & Co and Assetz Capital. With loans of £1million, we will wait to see how successful they are in attract high net worth lenders to the platform to fund these loans.