Peer-to-peer lending sites: MSE guide discussion

masonic

Nardge said:

Folks, 

Is the consensus to aim to withdraw all P2P investments? 

Are Business P2P investments riskier than Property Development ones in the coronavirus scenario, and should they thus be liquidated first? 

With Kind Regards

Personal and business lending is likely to be impacted. For some people, self isolation will put them in financial hardship, and some will lose their jobs due to the impact on their employer.

It has been said here for quite a long time that the returns in P2P aren't worth the risks. I still hold a few k spread around 3 platforms, but nowhere near the 10-15% of my investments I once held. The main reason I was withdrawing from AC was to top up my S&S ISA in the new tax year, but I can fund this from income if need be.

keyboardworrier

It's interesting that Ratesetter are no longer taking loan applications. I'm glad I got out of there when I did as well!

Alexland

ZeroSum said:

Problem being is that if everyone panics & wants their money back it just makes the situation worse. 

Yes it's a moral maze - do you act selfishly and try and pull all your money out (as soon as possible, where possible) or act calm while others are withdrawing their money increasing the chance your are left invested when a P2P platform fails. Tricky.

bowlhead99

ZeroSum said:

Nardge said:

Folks, 

Is the consensus to aim to withdraw all P2P investments? 

Are Business P2P investments riskier than Property Development ones in the coronavirus scenario, and should they thus be liquidated first? 

With Kind Regards

Problem being is that if everyone panics & wants their money back it just makes the situation worse. 

It's quite rational to know that if everyone withdraws it will be worse, yet still try to withdraw your money ASAP. Like being invested in Woodford's old fund, or having more than the FSCS limit in Northern Rock accounts.  This is capitalism. It doesn't do you any good to think 'if only we all cooperate as a team, this will go more smoothly'. Everyone is free to exploit whatever opportunities they find, including exit opportunities.

If you sit back and relax and think, hey, the P2P firms will have a smoother time of it if only everyone else would sit back and relax rather than demand their money, let's just keep calm and carry on... it's you who will be screwed over when everyone else demands their money and gets it, while you are left holding the assets that with hindsight, the bad debt fund was not adequate to cover.

keyboardworrier

P2P is risky at the best of times, a situation like this could cause considerable issues for platforms (Of course this is not guaranteed and some platforms may come out of this unscathed..) From a personal point of view, I've been involved in 2 platform collapses and had my details passed onto a borrower who wanted to sue me & other lenders in a loan, I have no desire to be involved in any more nonsense.

Albermarle

Withdrawals from the Assetz Capital Access Accounts have been restricted for the first time.

They can do this anytime they like , especially if it protects the ongoing viability of the business and the remaining investors.

drphila

keyboardworrier said:

 could cause considerable issues for platforms

I think could is an understatement, in my view it definitely will

Albermarle

Are Business P2P investments riskier than Property Development ones in the coronavirus scenario, and should they thus be liquidated first? 

I would think certain small/micro businesses in areas directly affected by the Coronavirus situation ( restaurants, travel related activities etc) have got to be vulnerable to cash flow issues.

The info I have related to my job, is that manufacturing and construction related activity is so far almost unaffected. 

drphila

An official statement from AC is now available on their website. It includes this:

"..As soon as the new system is live in the coming days, new Access Account withdrawal requests can be submitted to join the queue. All existing QAA, 30 Day Access Account and 90 Day Access Account withdrawal requests are still queued in the order they were requested, and their position will be honoured..."

keyboardworrier

drphila said:

keyboardworrier said:

 could cause considerable issues for platforms

I think could is an understatement, in my view it definitely will

It's certainly going to be interesting to see who gets through this with the least amount of difficulty.