Funding Circle vs London Capital

dont_use_vistaprint

Just looking at my FC actual returns and with the fees and planning for some defaults they seem about the same / little higher as London Capital offer for 3 Yr bonds. But FC are not guaranteed or backed by equity / 100% performance data, like LC, they are much, much smaller companies and many are simply director secured, but then exposure is very low at 2%. My understanding is I can sell FC loans anytime with no penalty / fees so they are more like instant access savings.

Also my understanding is both can be counted as bad debts on a tax return if the lender defaults, but as LC never defaults and FC regularly default and offer a slightly higher rate, is one better than the other for tax purposes

I was wondering what people think when comparing these two for potential additional investments looking for 2-3 yr 8-10% growth , have I missed / misunderstood anything ?



Thanks

eskbanker

dont_use_vistaprint wrote: »

have I missed / misunderstood anything ?

You may have missed all the threads about London Capital and the copious references to bargepoles within them, try this one for starters: https://forums.moneysavingexpert.com/discussion/5346049

dont_use_vistaprint

No not missed them, done my research, spoken to them and checked the data. What planet are those posts on ? Its p2p loans not the bloody post office savings :-)

Was kind of hoping for someone who actually uses both and understands what they are, how defaults on FC impact tax etc

ColdIron

Do you mean London Capital & Finance or someone else?

dont_use_vistaprint

ColdIron wrote: »

Do you mean London Capital & Finance or someone else?

Yes, the p2p loans company, like FC only much bigger loans to much bigger companies, no facility to sell , asset backed.

eskbanker

dont_use_vistaprint wrote: »

I was wondering what people think when comparing these two

Well at least you know what other people think when looking at LC&F - perhaps they're wrong and you're right, having done your research, but there's only one way to find out! Come back and tell everyone in three years if you get anything back....

dont_use_vistaprint

eskbanker wrote: »

Well at least you know what other people think when looking at LC&F - perhaps they're wrong and you're right, having done your research, but there's only one way to find out! Come back and tell everyone in three years if you get anything back....

I just thought someone might be able to assess the pros and cons against FC. I've read Martins article and its a similar experience to mine around 8.6% after default so slightly higher than LC but not guaranteed in any way. Also FC has changed quite a bit since it was written, its much more automated now

fun4everyone

I have terrible returns at FC compared to other p2p sites.

It has a place in a balanced p2p diet but imo there are better sites out there.

eskbanker

dont_use_vistaprint wrote: »

I just thought someone might be able to assess the pros and cons against FC.

If you drew a Venn diagram where one circle was LC&F investors and the other was MSE forum members, my strong suspicion is that there'd be a gap in the middle!

That's not to say that everyone (or even anyone) on here is an expert and it's hard to avoid a feeling of groupthink sometimes but I know how likely it is that I'd be putting any of my hard-earned into LC&F....

dont_use_vistaprint

fun4everyone wrote: »

I have terrible returns at FC compared to other p2p sites.

It has a place in a balanced p2p diet but imo there are better sites out there.

Really? Less than 8% ? Do you reinvest the interest automatically or turn it off?

I've not had single default yet, but i get the emails each week and there is a lot so I'm planning to lose a bit but still over the 8% guarantee of LC

What is a better p2p than FC?

ColdIron

eskbanker wrote: »

That's not to say that everyone (or even anyone) on here is an expert and it's hard to avoid a feeling of groupthink sometimes but I know how likely it is that I'd be putting any of my hard-earned into LC&F....

Indeed. Wild horses ...