With credit conditions getting tougher, one of the 'big three' peer-to-peer lending platforms, Funding Circle, recently lowered its annual return projections.It should be noted that the 'big three' platforms have different business models and lending criteria so should not be compared on rates alone, but how do Funding Circle's returns stack up for any new investor looking at the biggest brands in the market?Funding Circle recently cut projected returns on its Conservative and Balanced products.Its Conservative product targets 4.9 to 5.2 per cent, from between five and 5.5 per cent previously.This product offers exposure to loans made only to creditworthy businesses deemed lower risk.Balanced, which also lends to higher risk businesses and has a higher estimated bad debt rate, now targets returns of 5.5 – 6.5 per cent, down from the previous six to seven per cent.In contrast, P2P consumer lender Zopa offers returns of 4.5 per cent in its less risky Core product, while Zopa Plus invests in higher-risk loans for a higher estimated return of 5.2 per cent.
Loan Offer LatestMoney&Co. has grown relatively slowly (and received some criticism for this) since it began facilitating loans in 2014 - Just under £15 million facilitated. A major reason for that is the conservative approach to credit analysis and company vetting that we take, For now, at least, enough said. As we write, the latest loan offering is 81 per cent subscribed. The offer is property-backed and offers a fixed rate of 8 per cent over its five-year term.
A Process Guide To Innovative Finance ISA InvestmentMoney&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of almost £15 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders' capital is at risk. Read warnings on site before committing capital.All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.So here's our guide to the process: