UK leading marketplace lending platforms
Lending Deposit gives you an overview of the size and likely future returns of the leading peer-to-peer or marketplace lending platforms based in the United Kingdom.
Summary of leading UK marketplace lending platforms
The following table gives an overview of the total volume of the loans funded by the major platforms of the UK. The data is as of December 2015 and are of 12-months forward-looking returns, net of risk costs and platform fees.
|Name||Volume to date in million Pounds||Restrictions||Expected annual return||Riskiness||Active since||Type of loans|
|Zopa||1211||Low||5.2%||Low||2005||Mainly consumer loans|
|Funding Circle||979||Low||6.8%||Medium||2011||Small business loans|
|RateSetter||932||Low||6.2%||Low||2010||Mainly consumer loans|
|LendInvest||469||High||6.6%||Low||2010||Asset backed loans|
|Wellesley & Co||281||Low||5.5%||Low||2010||Asset backed loans|
|ThinCats||142||High||9.0%||Low||2010||Small business loans|
|Assetz Capital||84||Medium||8.0%||Low||2010||Asset backed loans|
|Folk2Folk||79||Medium||7.0%||Medium||2010||Small business loans|
Zopa is the worlds first and UK’s largest peer-to-peer lending site. Zopa’s peer-to-peer loans offer borrowers low rates and flexible terms and an immediate loan quote without impacting your credit score. With more than 10 years of experience Zopa claims to have reduced the default rates to one of the lowest in the industry. In addition to that Zopa has a “Safeguard Trust” that protects investors from defaults. With a minimum of 10£ per loan participation building a portfolio on Zopa is fairly easy.
RateSetter.com is a peer-to-peer lending website enabling lenders to gain back control over the returns they get on their investments. On the other side RateSetter offes fair rates for borrowers cutting the cost of borrowing by offering better rates than most of the traditional credit institutions. Same as Zopa the minimum investment amount per loan participation is 10 £ making it easy to build a portfolio.
Funding Circle is the leading online marketplace for business loans, where people and organisations can directly lend to small businesses. Funding Circle was the first site to use the process of peer-to-peer lending for business funding in the UK. Other as with the US branch investors do not have to be accredited. The lending minimum is with 20 £ per loan participation still very low for business loans.
MarketInvoice is Europe’s first and biggest peer-to-peer lender for businesses with outstanding invoices. They are an online working capital solution that gives businesses immediate access to funds otherwise tied up for between 30 and 120 days. Retail investors are not accepted but must have an investment company.
LendInvest in the UK is the worlds biggest marketplace platform for residential and commercial mortgages. Attractive for investors is that loans are secured by property, however a minimum investment per project of 1000 £ makes it very costly to build up a portfolio.
The Volume data given in the tables are either directly taken from the respective website or estimates from us if there is no data.
Under “Restrictions” we evaluate the complications European investors face investing in the respective platform such as Currency risks, legal restrictions and the minimum investment size.
- Expected annual return
The given expected return is directly taken from the platforms websites; only in the case that there is not information provided do we estimate the number.
Under “Riskiness” we try to give the investor an idea how risky the investment is given historical default rates and the loan type. Different loan types carry different risks: Asset-backed loans are for example less risky than personal loans which are especially affected in times of economic instability.
- Type of loans
Indicates the biggest group of loan types the respective platform deals with.