- Great insight in the commercial finance valuations and merger and acquisition markets. Worth a thorough read.
- FICO survey: p2p customer base has stagnated since 2015. Market share stuck at 1%. In the meantime, 19% of customers use online payments like PayPal or Venmo and 24% plan to use it in the next year. I wonder what is the market penetration of robo-advisors.
- Confirming the FICO survey Circle, a p2p payments company using blockchain raises $60mil
- And while unsecured personal p2p loan market is stagnating the secured real estate market is growing fast with PeerStreet also announcing record numbers and growth.
- Yet another investor explaining why Lending Club stock is a buy still at $5, with a target of $7.
- OnDeck partners with accountants associations already signed up 100 accountants.
- Why it is unlikely for the Shanda Group to target a Lending Club buyout.
- An interesting point of view that 1300 marketplace lenders compete for 1% of the market when 6500 banks compete for 99% of the market. As a result, BodeTree is typically paid 1% of loan principal for customer referral. They expect this number to grow to 3-5%. Claim that the cost of capital is what is keeping alternative lenders to focus on the 1% of the market with the highest interest.
- An interesting, perhaps history repeating itself point of view, how government distorts market and systems , while socializing risk and privatizing profits.
- Innovative Lending Platform Association ( ILPA, formed by OnDeck, Kabbage, Can Capital) launched a tool to standardize pricing comparison for SME borrowers ( SMART box). SMART Box is now holding a survey for feedback via an online survey.
- UK votes to leave the EU. P2p CEOs react to the vote. Very interesting reactions, various, thoughtful and diverse.
- The numbers of the UK p2p markets : individual lenders vs institutional, and volume over time. Good charts and data !
- France now passed the UK as #5 largest economy in the worlds (due to GBP fall related to Brexit vote).
- UK and European firms not ready for the July 3rd Market Abuse Rules. Only 5% of firms polled “are ready”.
- Funding Circle eyes C Share sale. Details on the structure shared. The previous fund hoped for 6-7 pence annual dividend per share. In fact, it will probably be more in the 4 to 5 pence range.
- Despite Brexit commercial real estate loans in the UK raise 12% month to month, mostly powered by p2p lenders.
- ThinCats secures $30 in lending capital from ESF Capital.
- United States
- Expectations in the Commercial Finance M&A Market, ( ABL Advisors), Rated: AAA
- FICO Survey: Online Payments Taking Off, But Alternative Lending Stalls, (PR Newswire), Rated: AAA
- Fintech companies emerge triumphant, with little sympathy for LendingClub, (CNBC), Rated: AAA
- Lending Club’s Stock Has Been Shattered, Now It’s A Buy, (Forbes), Rated: A
- Small Business Lender OnDeck Partners with Accountants, (Accounting Today), Rated: A
- Lending Club: Chinese Buyout?, (Seeking Alpha), Rated: A
- The Alternative Lending Bubble Is Here, And It’s Time To Do Something About It, (Forbes), Rated: A
- Small Fintech and Big Government, ( Linked In), Rated: A
- Online small business lending gets closer look from regulators, (San Francisco Business Times), Rated: A
- Innovative Lending Platform Association (ILPA) and its SMART Box initiative, (Press Release), Rated: A
- United Kingdom
- UK votes Leave – AltFi leaders react, (Alt Fi), Rated: AAA
- Brexit and the UK P2P Lending Markets, (Alt Fi Investor), Rated: A
- How Brexit might affect the private equity markets, (Dan Primack’s Termsheet), Rated: AAA
- Brexit shock – France ‘overtakes UK as world’s fifth largest economy’ after pound plunges, (Express), Rated: A
- The Morning Risk Report: Firms Still Scrambling over Market Abuse Rules, (Wall Street Journal), Rated: AAA
- Funding Circle SME Income Fund Eyes C Share Sale To Raise Capital, ( LSE), Rated: AAA
- Commercial transactions rise 12% despite Brexit fears, (Bridging and Commercial), Rated: A
- MoneySuperMarket launches peer-to-peer exclusive with Assetz Capital, (EasierFinance), Rated: A
- ThinCats secures $30 million to fund more Australian small businesses and start-ups, (Australian Anthill), Rated: A
Expectations in the Commercial Finance M&A Market, ( ABL Advisors), Rated: AAA
Coming off of a busy year in 2015 for M&A activity in the commercial finance sector, highlighted by GE Capital’s divestitures, it was fair to wonder whether 2016 would continue to be a seller’s market – or, with volatile debt and equity markets and a cloudy economic outlook characterizing the start of the year, whether M&A activity would dwindle to a trickle. So far in 2016, activity has remained quite brisk, albeit with a heavy concentration specifically in the equipment finance and leasing market.
Thus far, valuations have remained attractive for selling shareholders in 2016, but each announced deal had its own circumstances surrounding the sale and unique financial results that impacted valuation. Generally speaking, valuation metrics for healthy sellers in the commercial finance sector have averaged 12x to 15x trailing after tax earnings and 1.5x to over 2.0x tangible equity. With charge-offs and delinquencies generally remaining at or near all-time lows, loan loss provisioning has not been a major expense, resulting in good earnings. If credit quality deteriorates in the near term, valuations will suffer in the sector, which could lead to the continued momentum of M&A transactions as sellers look to seek liquidity before credit quality, and therefore earnings, start to suffer.
Within the last year, banks of all sizes have completed acquisitions of commercial finance companies. Aside from the large purchases involving GE Capital’s divestitures and bank buyers such as Wells Fargo, smaller community banks have been acquisitive. Berkshire Bank (Pittsfield, MA – $8 billion in assets) acquired equipment lender Firestone Financial and SBA-7(a) specialist 44 Business Capital. State Bank and Trust Company (Macon, GA – $3.5 billion in assets) acquired equipment finance provider Patriot Capital Corp.
Gulf Coast Bank & Trust Company (New Orleans, LA – $1.4 billion in assets) acquired AmeriFactors Financial Group, an accounts receivable finance company. And Sterling National Bank (Montebello, NY – $13 billion in assets) acquired NewStar Business Credit, an asset-based lender. Each of these deals involved a sub-$15 billion asset bank acquiring a non-bank commercial finance company to either enter a new line of business or further penetrate an existing line of business. These types of acquisitions should continue through the balance of 2016.
An encouraging sign relative to banks and recent acquisitions of commercial finance companies is that in several transactions, like those cited above, the bank buyer was a regional or community bank with a specific, or even narrow, geographic retail focus, yet in their acquisitions of a finance company, were willing to take on a platform with a greater geographic reach, or even a national presence.
With business development companies (BDCs) as a peer group continuing to trade at about 80% of book value, essentially prohibiting their ability to accretively raise equity capital, commercial finance company M&A activity has generally screeched to a halt. BDCs, however, are willing to opportunistically consider commercial finance M&A, and they continue to be an attractive option for growing specialty finance companies as a source of debt capital, particularly junior debt that can be treated as equity capital and levered with cheaper senior debt from traditional lender finance providers such as Wells Fargo and Capital One.
Private equity firms continue to show interest in commercial finance companies, although new investment activity has been slower in 2016 than in 2015. Two interesting transactions include Light Year Capital’s investment in Pathlight Capital, a consumer and retail oriented asset-based lender, and Palladium Equity’s investment in Fora Financial, a tech-enabled small business lender.
Another interesting trend to keep a keen eye on is that of international buyer interest in U.S. commercial finance firms. Negative interest rates in Japan, for example, could continue to have a positive impact on U.S. M&A deal activity, as evidenced by Hitachi Capital America Corp.’s recent acquisition of Creekridge Capital, a Minnesota-based vendor finance business focused on the healthcare and IT sectors. Both Japanese and European firms have been rumored to be interested in various bank and non-bank firms in recent months.
The M&A market for commercial finance companies remains active, albeit with a fraction of the pace that you see in other sectors of financial services like banking and fintech. But that is the historical norm. As long as net interest margins remain stressed at banks and capital continues to abound in the non-bank finance company, international and private equity sectors, we expect continued steady M&A for the rest of 2016.
FICO Survey: Online Payments Taking Off, But Alternative Lending Stalls, (PR Newswire), Rated: AAA
- Customers who borrowed money from peer-to-peer or marketplace lenders remained flat at 1 percent year-over-year, with no signs of growth
- Online payment services are the most popular alternative to traditional banking, with 19 percent of consumers currently using them and 24 percent indicating interest in using them in the next year
19 percent of respondents currently use online payment services such as PayPal and Venmo, and an additional 24 percent indicated interest in using them in the next year. The respondents identified ease, speed, and convenience as the primary reasons for using online payment systems.
According to the survey, the number of alternative lending customers has stagnated from last year, with only 1 percent of respondents borrowing money from peer-to-peer/marketplace lenders.
While the alternative lending market is forecast by consulting and research firm GrowthPaxis to be worth $350 billion by 2025, today it is closer to $20 billion. This means it is still some way from becoming mainstream as it represents only 0.6 percent of the overall consumer credit market in the U.S.
Another potential challenge for the industry is the quality of customers they attract. According to FICO’s survey, consumers who had already experienced delinquency events were the most likely to consider services from peer-to-peer lenders (48 percent).
“While alternative lenders may be increasing access to credit for some populations, they are finding it difficult to profitably grow beyond their initial risk appetite,” said Ryan.
FICO conducted an online survey of about 1,000 US consumers over the age of 17 in October and November 2015. Data was weighted by age and region to reflect U.S. Census data.
Fintech companies emerge triumphant, with little sympathy for LendingClub, (CNBC), Rated: AAA
Some financial technology start-ups have emerged as bright spots in the industry, scoring big bucks and saving themselves from the carnage in the fintech space. Part of the strategy? They’ve aggressively distanced themselves from fallen star LendingClub and the markets affected by it. Negative sentiment seemed to bleed quickly into other U.S. firms in the industry. Vouch reportedly folded amid the hostile funding environment, while companies such as Avant, On Deck Capital and Prosper Marketplace reportedly battled business woes.
“Individual retail investors have in large part told us they are looking for a safer place to invest,” said Brett Crosby, founder of PeerStreet, a marketplace for investing in real estate-backed loans. “All of a sudden, the phone is ringing off the hook.”
In the month of May alone, PeerStreet added more than $11 million of new capital, the company said, and has funded $75 million in real estate loan investments since its launch in October.
“We effectively compete with Prosper and LendingClub on yield,” Crosby said. “But if something goes wrong, you can foreclose on the real estate.”
Jeremy Allaire, founder and CEO of Circle, denies getting any pushback when raising funding. The company, which specializes in cross-border peer-to-peer payments, announced Thursday a $60 million strategic financing round.
Jeremy Allaire, founder and CEO of Circle, denies getting any pushback when raising funding. The company, which specializes in cross-border peer-to-peer payments , announced Thursday a $60 million strategic financing round. Circle, which looks similar to PayPal‘s Venmo but works with blockchain technology, will focus its expansion on China and Europe.
Lending Club’s Stock Has Been Shattered, Now It’s A Buy, (Forbes), Rated: A
What is the market missing?
Lending Club is the largest online lender and its fundamentals are still relatively strong. The stock trades at less than 2x its book value of $2.77, its current ratio is 35.93, and it is trading at a PEG of .50. In today’s low return environment, Lending Club provides an alternate for investors seeking a greater return on their investments.
The company has shown positive earnings in every quarter since first reporting after going public and has a great business model that should continue growing. Additionally, there are some big investors buying into Lending Club, such as Shanda Group. This private investment firm founded by Chinese Internet entrepreneurs amassed an 11.7% stake in Lending Club in 2016, according to a regulatory filing.
One other important little factor is that this company isn’t a group of college kids working out of a dorm room – there is a distinguished group sitting on the board of directors that includes the 71st Secretary of the Treasury and Former World Bank Chief Economist Lawrence H. Summers, who is also the President Emeritus of Harvard University, as well as Morgan Stanley Chairman Emeritus John Mack, Kleiner Perkins Caufield & Byers general partner Mary Meeker, Norwest Ventures general partner Jeff Crowe, Canaan Partners general partner Daniel Ciporin, and Morgenthaler Ventures partner Rebecca Lynn.
I am a long term investor and although I was fortunate to add shares to my portfolio at $3.75, which have already appreciated as much as 35% when LC closed at $5.06 on June 2, 2016, I believe holding LC will provide great annual returns over the next 5-10 years.
If you are right, what is the upside in this stock?
Over the next 1-2 years, I can see the stock reaching $7 again which is a 40% + return from where it is today, and longer term, I can see this stock at $15 in 5-7 years which would be a 200% + return from where it is today. Could it return more? Yes, but it will have some volatility along the way, so it is one to buy and hold.
Small Business Lender OnDeck Partners with Accountants, (Accounting Today), Rated: A
A small business lending company, OnDeck, has recently launched an Accountant Advisor Program that helps accountants arrange financing for their small business clients.
The program launched in March and works both in person and online. OnDeck expanded it this month, hiring Accountant Relationship Managers in Louisville, Ky., Miami, Fla., and Mobile, Ala.
The program is open to accountants, bookkeepers and CPAs, and is available to the majority of small businesses in approximately 700 industries across all 50 states. So far, more than 100 accountants have signed up since March, according to Orofino.
“One of the things that we desire to do is have the feet on the ground in order to support the different communities in a face-to-face manner,” said Orofino. “We still believe that the inside sales model is a great model, but in order to build lasting partnerships with accountants, we also recognize that in some of the more populated areas and some of the more desired areas we would like to have an individual there to support and be there on a moment’s notice.”
OnDeck is hosting a free CPE webinar on small business lending and its new program on July 9 at
Lending Club: Chinese Buyout?, (Seeking Alpha), Rated: A
- Chen Tian Qiao now owns 15% of the company.
- Chen Tian Qiao’s Shanda Group is involved in a social media platform called Youni, which experimented with new payment methods.
- Lending Club could complement Youni’s existing payment methods, but there are plenty of P2P lenders in China.
- Aggressive option positions show that Chen Tian Qiao was relying on short-term fluctuations of the stock, uncharacteristic of a potential buyer.
Although Chen Tian Qiao could be eyeing Lending Club to complement Youni, there are plenty of substitutes in China alone. From the option positions, we can tell that he set up the trade to take advantage of short-term fluctuations of the stock, which is not characteristic of a strategic buyer. Given the above, I believe that the chance of Chen Tian Qiao bidding for the entire company is small.
The Alternative Lending Bubble Is Here, And It’s Time To Do Something About It, (Forbes), Rated: A
Alternative lenders (and traditional lenders for that matter) need to monitor what is happening inside of their portfolio companies in real-time. I know the technology exists; in fact, it’s a huge part of what we do at my company, BodeTree. With real-time monitoring, lenders can ensure that their borrowers aren’t simply running up their debt balances and significantly de-risk the loans they make. While I wont speak for the entire industry, the clients that I have worked with in this space are much more concerned with the borrower’s personal finances than the business’ finances since they often obtain a personal guarantee.
While specific statistics are hard to pin down, we estimate that there are approximately 1,300 companies operating in the alternative lending space today. These 1,300 organizations are competing for about 1% of the overall market, compared to about 6,500 traditional banks competing for the remaining 99%.
Lenders are paying anywhere between $2,500 and $4,000 per loan to acquire the customer. At BodeTree, we work with a number of lenders who tap into our considerable user base to find customers. Historically, they’ve paid us about 100 basis points (1%) for each loan we source. Over the past 18 months, however, we’ve seen that number skyrocket to anywhere between 3% and 5%.
The problem is that banks have an allergic reaction to anyone offering to lend at interest rates above 15%. However, if the alternative players were to drive their cost of capital down through rigorous data analysis, I suspect this dynamic would change. Banks would open up the floodgates and alternative lenders would be able to stop fighting for the bottom 1% of the market.
Small Fintech and Big Government, ( Linked In), Rated: A
On June 10, 2016, the White House sponsored a White House FinTech Summit, where various companies and government entities met to discuss “how financial firms and start-ups are partnering with one another to create and scale innovation, as well as the important role of government in ensuring that these partnerships can reach their full potential.”
The Fintech industry – and individual companies – needs to ask itself several questions, about cooperating with the government.
- Are risks socialized and profits privatized? It is how we got “too big to fail,” bailouts, targeted tax loopholes, etc., etc., etc.
- Do the regulations favor the larger businesses? We see it across financial sectors (particularly community banks), and it practically wiped out the debt buying industry.
- Should the government direct the lending and spending practices? Laws like the Community Reinvestment Act – though not the primary impetus its critics claim it to be – are still part of the “system” of laws and regulations where the government has requirements of businesses to where they spend or invest money – often in areas where no reasonable business would invest, where the money does no real good for anyone (even within the areas invested), and the losses are absorbed by the taxpayer – not the business.
- Is government involvement a short-term or long-term solution? At times, heavier government involvement can seem like a profitable venture, but does it result in long-term stability?
Fintech companies, both individually and as a whole, need to look at the past couple decades of government involvement and take a broader look as to whether or not it is something that needs to happen.
Online small business lending gets closer look from regulators, (San Francisco Business Times), Rated: A
“We have serious concerns that any additional regulation would be both premature and could stifle access to much-needed capital,” Scott Talbott, senior vice president of government relations at the Electronic Transactions Association, a trade group that represents online lenders, told the paper.
That concern was echoed by Kathryn Petralia, co-founder and head of operations at Kabbage, a small-business online lender.
“For consumer loans, it is easy to compare pricing to an annual percentage rate because the loans are generally uniform, but in small-business lending it would be a challenge because there are many different types of loans,” Petralia told the Journal.“We have one fee so there’s no deception in this case,”
Innovative Lending Platform Association (ILPA) and its SMART Box initiative, (Press Release), Rated: A
SMART Box model disclosure is aimed at helping to empower small businesses in assessing and comparing financing solutions for their various business needs.
A 90-day “national engagement period” provides interested lenders, trade associations, think tanks, policymakers, and non-profit organizations an opportunity to provide feedback that will help inform the final SMART Box via an online survey.
The SMART (Straightforward Metrics Around Rate and Total Cost) Box will be a model disclosure for small businesses that includes standardized pricing comparison tools and explanations. Interested parties can engage in the initiative by visiting: www.innovativelending.org
Background: The Innovative Lending Platform Association was formed in May of 2016 by the nation’s three largest online small business lending platforms – OnDeck, Kabbage, and CAN Capital – with a mission to advance small business online lending education, advocacy, and best practices. To promote common disclosure verbiage and standardization, the new group’s first priority, launched in partnership with the Association for Enterprise Opportunity (AEO), the leading advocate for microbusiness in the United States, is the SMART Box initiative. The SMART Box will present a small business with a chart of standardized pricing comparison tools and explanations, including various total dollar cost and annual percentage rate metrics that enable comparison of small business financing solutions
UK votes Leave – AltFi leaders react, (Alt Fi), Rated: AAA
Angus Dent, Chief Executive of ArchOver :”The outcome is a disaster for this country. You can expect foreign businesses, institutions and other investors to start pulling out of the UK. The Chancellor will be forced to put together an emergency Budget to plug the gap and this country, which was on course to become the world’s fourth largest economy, will now go backwards. What a waste of all the hard work. ”
James Meekings, Co-Founder of Funding Circle, the UK’s largest pan-European platform, said that the business was extremely well placed to weather any “short term uncertainty”:
“Clearly there will be economic and political uncertainty over the short term and we will react accordingly, including factoring this into our credit models. We have been discussing a possible ‘Brexit’ internally for some time and have already started to execute our contingency plan. The full picture will become clearer as markets adjust and the UK economy moves forward.”
Zopa CEO Jaidev Janardana sees no immediate impact for the platform or its customers: “Zopa is a UK-based company and focussed on UK customers, thus we do not expect any direct and immediate impact on the business. Zopa focuses on lending to customers with stable income and very high propensity to repay. ”
Rhydian Lewis, CEO of RateSetter, sees a potential opportunity for fintech companies: “FinTech is in its infancy but that means it is necessarily forward-thinking and modern and that allows it to respond more nimbly to the inevitable changes and opportunities that will arise from today’s vote. Leaving the EU may discombobulate big banking conglomerates and FinTech businesses will look to fill any spaces. This may prove to be an opportunity for FinTech”
Stuart Law, CEO of Assetz Capital, struck a positive tone, while admitting that the platform’s credit team would have to be “even more careful” going forwards: ” Brexit will create a big opportunity for Assetz Capital’s investors as bank interest rates on business loans are likely to rise (making banks less competitive) and their lending volumes are reduced and at the same time banks are likely to lower their savings account rates even further. ”
Brexit and the UK P2P Lending Markets, (Alt Fi Investor), Rated: A
What does this mean for the world of P2P lending?
Looking first to the top level ‘in-out’ decision; an out vote would prevent lending businesses authorised in the UK or another EU country to offer its services in any other EU country, this is officially called “Passporting”. This could cause a real headache for platforms such as Funding Circle who are really starting to develop their EU businesses, this would impact the ability for P2P lending markets to grow going forward..
Turning to the actual P2P market itself; there are both supply and demand factors at play. Not only may lenders stop lending, but borrowers stop borrowing.
Looking at the everyday non-institutional user of P2P lending platforms, they are the target lending audience and tend to be less confident and aware of the economic consequences of a Brexit. RateSetter stats for “UK consumers who say they understand P2P lending” place figures at only 42 per cent for men and 26 per cent for women. With the added pressure of Brexit uncertainty, it is no wonder that some may think twice about locking money into a lending platform for 3-5 years when the didn’t fully understand it in the first place!
The far more disruptive group is the institutional lenders, these are more sophisticated in nature but have a tendency to act in a more flippant ‘risk on-risk off’ manner, similar to their stock market counterparts.
A report by Capitalise recently stated “40% [of SME borrowers] admitted Brexit has already impacted their business decisions” when talking to SMEs (Small Medium Enterprises).
Since January 2016 there has been a noticeable decline in weekly market volume, naturally there are fluctuations within the marketplace.
Readers should be aware that there are indeed other factors at play, such as the unexpected delay in the Innovative Finance ISA wrapper being available to retail investors, with platforms having to wait for full FCA authorisation before being able to offer it.
As an investor in the P2P lending space, I am personally looking to hold off any major relending until the Brexit decision has been made and counterparties stand on solid ground.
How Brexit might affect the private equity markets, (Dan Primack’s Termsheet), Rated: AAA
There already are a bunch of theories as to how Brexit might affect the private equity markets, including a pause on UK deal-making (and UK-focused fundraising), given all of the outstanding trade questions between Britain and the EU. There also could be renegotiation of existing deals for UK targets ― or even broader geographic renegotiation if today’s global markets mess is sustained (not to mention troubles for potential IPO issuers). And then there is the issue of AIFMD rules that will govern British firms for a while longer, but not necessarily once the UK turns off its EU lights in a couple years (i.e., uncertainty over what comes next, and also if more firms will move their European headquarters out of London for the sake of simplicity).
Brexit shock – France ‘overtakes UK as world’s fifth largest economy’ after pound plunges, (Express), Rated: A
FRANCE has overtaken the UK as the world’s fifth largest economy after the pound plunged to a 31-year low, with the vote to leave the EU reverberating across the world’s financial markets.
The Morning Risk Report: Firms Still Scrambling over Market Abuse Rules, (Wall Street Journal), Rated: AAA
Financial firms across Europe will have to implement the European Union’s new Market Abuse Regulation by July 3, but concerns persist in the U.K. that many firms aren’t fully prepared for the new rules.
A survey by law firm Linklaters LLP this month found that less than 5% of listed companies “feel completely ready” for the new regime, and 21% of them “feel they don’t stand a chance of being able to comply in full” by July 3.
The new MAR rules are broader than the existing regime, with disclosures on insider lists, for instance, applying to all companies with shares listed on regulated European stock exchanges as well as those listed on multilateral trading facilities that weren’t previously subject to this level of oversight, such as London’s Alternative Investment Market.
The two main areas of increased enforcement risk are trading activity, because of the expanded market coverage, and the obligation to report suspicious trading as well as suspicious orders, even if they haven’t been executed, said Calum Burnett, a partner at Allen & Overy.
Funding Circle SME Income Fund Eyes C Share Sale To Raise Capital, ( LSE), Rated: AAA
Funding Circle SME Income Fund Ltd, the London-listed closed-ended fund set up to invest in loans originated through Funding Circle, the peer-to-peer lending marketplace, on Friday said it has decided to go ahead with raising equity capital by selling C shares.
Funding Circle SME Income Fund, which earlier in June revealed it was mulling a capital raising, said it continues to receive “encouraging indications of demand” for its shares from prospective investors.
“As is usual in C share offerings, any funds raised will be deployed in a separate pool until the earlier of nine months or at such time as the funds have 90% invested, at which time they would be converted to ordinary shares, thus avoiding the performance drag on the ordinary shares that would otherwise derive from holding a substantial cash position pending investment,” Chairman Richard Boleat said in a statement.
“The C shares will be separately listed during the period prior to their conversion to ordinary shares,” the chairman said.
Confirmation of Funding Circle SME Income Fund’s intention to go ahead with raising capital came as the company reported results for the period from its incorporation on July 22, 2015 to March 31.
Funding Circle SME Income Fund said it has invested more than 85% of its cash in SME loans in the UK, the US and Continental Europe. The company raised GBP150.0 million in its initial public offering on the London Stock Exchange in November 2015.
The loans are producing yields and experiencing delinquency levels in line with those anticipated at the time of the IPO, Boleat said.
Funding Circle SME Income Fund reported a net asset value total return of 0.87% for the period to March 31.
Funding Circle SME Income Fund, which at IPO said it was targeting an annual dividend of between 6.0 pence and 7.0p per share once fully invested, said its performance to date and the projected earnings over the next twelve months enabled it to declare an initial dividend of 1.0p per ordinary share.
The company reiterated that it expects to pay dividends at a rate of 1.5 pence to 1.75p per ordinary share in respect of each subsequent quarter.
“We expect that dividend yield on a cumulative basis will be 6% to 7% based on the current share price. It is our intention to adopt a progressive dividend policy to the extent that the Company’s future performance permits,” Boleat said.
Commercial transactions rise 12% despite Brexit fears, (Bridging and Commercial), Rated: A
Data published by peer-to-peer (P2P) investment platform Saving Stream showed commercial property transactions reached 10,790 last month, up from 9,650 in April.
The firm partially attributed this rise to alternative and P2P lenders filling the gap left by Basel III regulations, which limited bank lending within the commercial property sector.
Liam Brooke, Co-Founder of Saving Stream, says: “[This data] shows that commercial property investors are finally getting the funding they need.
MoneySuperMarket launches peer-to-peer exclusive with Assetz Capital, (EasierFinance), Rated: A
MoneySuperMarket has launched an exclusive peer-to-peer incentive to new customers investing with an Assetz Capital account. Those who invest £2,000 or more for a minimum of 12 months into an Assetz Capital investment account will qualify for £150 cashback, as long as they apply exclusively through MoneySuperMarket before 21st July 2016. The exclusive cashback offer is available through a range of Assetz Capital’s investment accounts, with the added benefit for customers of earning up to 7% gross per annum.
ThinCats secures million to fund more Australian small businesses and start-ups, (Australian Anthill), Rated: A
Australian peer-to-peer business lending platform, ThinCats Australia continues to grow with 300 lenders in the provision of funds for Australia’s 2.1 million small to medium sized businesses.
The Australian operation has been boosted by a commitment of $30 million in funding for loans to small businesses in the next 2 years, provided by UK partner ESF Capital.
“There is a real opportunity for peer-to-peer (P2P) lending in Australia as a result of pressure on the major lenders from the Australian Prudential Regulation Authority (APRA) and their traditional aversion to unsecured loans, as well as inability to price small business risk accurately.”
ThinCats Australia has also launched a new credit assessment tool that makes finance applications easier.
Created by local company Othera, the credit assessment tool allows small companies to pre-qualify for loans on the ThinCats platform, as well as allowing its 300 peer to peer lenders make more informed business lending decisions. ThinCats now has access to Othera’s Lender Dashboard to run credit assessments on loans applied for by small businesses on the platform.