Funding Circle slow selling

Ash_Pole

hahnchen wrote: »

From the returns information at https://www.fundingcircle.com/uk/statistics/ I would much rather buy some older debt than the new stuff I keep automatically lending to.

The "Projected annualised returns" graph shows about 6% for 2019 "after fees and bad debt".

Is this figure a load of tosh?

hahnchen

Ash_Pole wrote: »

Is this figure a load of tosh?

It's too early to tell. They were a load of tosh in 2017 when I opened my account.

lifemagic

I'm currently selling just over 5000, not in wrapper. Nearly three months now. They show the estimated time when you check online,beach time For look, it's got longer.

Never again with them.

itwasntme001

If i were to use funding circle it would only be as a borrower.

Ash_Pole

Started selling on 12th June so 118 days now and counting.

I can't see how FC can come back from this. They've got cash reserves but that won't last forever, they're heading the way of Collateral and Lendy.

soosiemm

In 2016 I decided to test the P2P water with Funding Circle and Assetz Capital. I did exactly what was recommended and invested £2000 in FC to ensure a spread over 100+ borrowers. Over time the net return from FC sank to below 2% due to terrible bad debt so I slowly moved out my money and put it in Assetz. Given the FC share price and the ever increasing time to get money out of FC it's obvious that they are going to the wall unless a miracle happens. I still have £175 in FC waiting to be sold and am grateful I managed to get out the rest without loss. I shall probably break even, ignoring inflation. If FC can't attract new lenders and the wise are extracting their money then it's a downward spiral to the bottom. Their problem is they seem to have almost no credit control/risk management in place that works.
Assetz is the exact opposite. I can't fault them. They take property as security and also have a fund to cover bad debt losses. They communicate with lenders continually over individual loans and use lender surveys to take votes on any loans in trouble or borrowers who want to extend a repayment period. To date they haven't touched the fund but are about to for the first time to cover a loss from a wind farm development. They have exited loans to 'green energy' developers now.

MSE should remove references to FC in its main article as it can give the wrong impression that FC is healthy. It isn't. MSE should also remove out of date info about Martin's now very old trial investments. This again can give false comfort for those new to P2P lending.

Efficiency

What's even more contradictory is the headline rate (which is obviously variable) trying to lure new business borrowers in on the front page: "Rates from 1.9% per year". Yet the people lending money magically get rates of 8%? Something doesn't add up.

The whole thing looks similiar to a ponzi scheme, no wonder they were advertising heavily on the radio and TV a little while back - trying to keep it going for as long as possible.

criston

Just an update for anyone new here.
Selling times updated daily.
http://p2pindependentforum.com/thread/14673/selling-loans-frame-updated-daily

hahnchen

I'm not currently selling any loans. My Funding Circle ISA shows £230 held in cash, which I thought was quite high. The transaction history shows that I have not auto-purchased any new loans since 10th October.

Suggests that live portfolios are not buying old debt.

Email newsletter received today, Funding Circle updated their stats page for Q3 2019, no change from Q2 2019. https://www.fundingcircle.com/uk/statistics/

Nothing in their newsletter about the lack of liquidity in the secondary market. Their shares are up 15-20% today after reporting an increase in loans under management and reaffirmed their guidance.

grimes12

New to this forum but IMO the panic to sell loans has been slightly over the top at FC. It seems many people expect the same sort of product from a p2p platform as they do a savings account. In some cases this might include using p2p as a way of saving for a house deposit and therefore liquidity is rather important as soon as you want to buy a property.

Defaults at FC are higher for loans written in 2016 and 2017 with 2016 loan defaults now starting to level off;. Historic trends show that businesses which last 36 months into a 60 month term are very likely to continue repayments for the full term. Hence over the last 6-12 months, returns from loans written in 2016/2017 will appear relatively poor. Leaving FC at the 'peak' of the lifetime default curve will more than likely result in investors receiving lower returns and selling the more mature (perhaps better) loans on the secondary market.

I do not work for FC and I'm not trying to promote them in any way but think FC and other platforms should be seen as investments for the duration of the loan term rather than an instant access account with a guaranteed 'get out' on the secondary market.