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Anyone Involved or Invest in Peer to Peer Lending


Kimbers

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Been suggested to me that a good portfolio these days should include some Peer to Peer Lending and I must admit I like the look of this one in particular because you can choose to support businesses you want to and ones that you can credit check.

 

Whereas the person to person is allocated by the loan companies.

 

Any advice, anyone involved in it? As far as I can see the risk is less than the Stock Market if you choose carefully and research the companies, plus spread your loan over several to further reduce your loss should one cease paying.

 

You can read all about it here, if you don't know what it is.

 

https://www.fundingcircle.com/investors

 

Anyway, I have given it a try with a manageable amount and have chosen to support only Manufacturing and Local companies to me. We'll see how it goes.

 

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

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I looked into this last year, on behalf of a local venture. My take, an excellent way to raise money (if you can) and an equally excellent way to loose money.

 

People generally only seek peer to peer after the banks have knocked them back, usually for a good reason.

Life is like a sewer, what you get out of it, depends on what you put into it. (Tom Leahrer)

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I disagree. With a 1.3% default rate I think, as long as you are sensible, you can make a reasonable margin and help local small businesses.

 

I also think you may not understand the climate in the UK at present, mate. Where companies who make a profit year on year with a sound background and good Directors, can't get funding from banks. I know 3 small businesses that have had funding cut or removed all together for making a loss in one year for an anomoly, and have forcast and made profits the next and with a sound bottom line.

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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I don't disagree with your comments, and yes we do tend to be a bit more "cowboy country" here, but the fundamentals are the same.

 

My comments were based on an experience last year when I was approached by a local business man who could not get funding. He asked me to take a look over his business plan, OK I'm supposed to be retired but he's an Englishman.

I looked over it, he came back in the specified 3 days, he was not happy when I said "nice vision, no plan".

Therein lies the problem most people don't know the difference between a vision and a plan, but the bank does.

If you cannot demonstrate how you are going to repay the loan there is no bank on the planet going to advance you money.

And neither would I peer to peer or otherwise.

Remember we are going through some major upheavals, media, manufacturing, communication, and Banking itself, the very times we live in are volatile. 

Life is like a sewer, what you get out of it, depends on what you put into it. (Tom Leahrer)

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I can see the altruistic side of going into this but I'm not sure I'd be that happy with the returns. I like to buy stocks and shares more as a hobby than for a living and prefer the rate of return you can get. For instance in July 2011 I bought £30K worth of Rolls Royce shares (not the cars) my holding is now worth in excess of £50K thats once I have paid the accountant and whatever tax is supposedly due. I like the white knuckle ride which is the stock market but I guess it's not for ther faint hearted because in August to October 2011 my total share stock I held was down £15K and I'm sure some people would have panicked

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  • 3 weeks later...

Life is like a sewer, what you get out of it, depends on what you put into it. (Tom Leahrer)

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David. I agree and have a decent amount in Shares myself. Over the last 3 years my holding has increased in value to the tune of 32%. But I spread the risk over several companies. My biggest gains being Stagecoach Group, Aviva, Aberdeen Asset Management and Legal and General. I have made small losses of Vodaphone and Tesco but thats not an issue seeing as how both are paying divdends of approx 6-8% so the losses are mitigated by Dividends.

 

However. I have made a small contribution to peer to peer lending and have given myself a strict lending structure. Manufacturing and local to me are the first 2 important criterea, I also prefer to lend over 12-36 months and like to see stable accounts and good business structure.

 

I am only dabbling with a mere grand and have spread it in £20 to £100 loans to reduce my risk. We'll see how it goes but it was really exciting when my first payments started coming in this month!! Of my £2 payments I got £0.14 in interest! Not a bad rate of return as long as payments are kept up!

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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Shares are flying up in value at the moment, I've just done a calculation this week and my shares have risen over £1800 in value from this Monday to this Friday. I tend to buy shares in companies I have dealings with through my business whether it be being a sub contractor to a business that has dealings with them hence RR Holdings and QQ both of which have served me well although there is no insider knowledge gained on my part I hasten to add.

I must have bought Vodafone at a good time because I am showing a gain on the 3000 I hold.

Thing is what to do when it stops the mad rise as gold should have been bought in 2007.

I guess the smart thing to do is cash them in at the high hold the cash then buy at the lowest could be an interesing few years ahead.

I'm always lending my mates money I only charge 200% interest and if they don't pay I get one of my big hairy arsed sub-contractors to go round and hold them upside down and shake them for a few minutes till the money falls out their pockets then scoop it up, I'm doing a public service and I'm nicer than payday loans people at the end of the day.

Edited by B1 RMA
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Well I have just lent out my last £200 to a Manufacturing company making specialist tools for Export. So I also have Loans in Diamond retailers, Knitware importers and 2 other manufacturing comapnies. I'll let you know my experiences.

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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  • 11 months later...

Yes bud, My figures are thus. 

 

Gross yield: 7.5%

Estimated fully diversified net return: 4.8%

 

 

That was after I stepped outside my criterea and lost £14 or so when they didn't make their last few payments. But with a good spread of investments and tight controls on who I lend to it has worked out well. I have added in another criterea and only lend 12 to 24 months now as well. 

 

Overall I think 4.8% was a good rate of return and, top be honest, it's as much fun as investing in stocks and shares.

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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I think i'm with David on this one.

Will stick with Shares, been a great year with Vertu, Northgate and BP. making very big gains. Have to even it out with days like yesterday, £3k loss. (bloody Russians)

 

Have looked at peer to peer, but have filed it with Bitcoin/land banking/etc

I have CDO, it's like OCD but all the letters are in alphabetical order, AS THEY SHOULD BE !

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That's the difference between Gross and net yield bud. That and taking into account their default %. If you keep your investments small (I do investments of £100 a time) then any loss is usually mitigated by the rates.

 

That said, I know someone who lends to "C" grade customers (I only lend to A and A+) and whereas my average lend rate is 8%, his is 12%. But his default is running at 3.75%. So it evens out.

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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  • 3 years later...

I put £1000 into it.  And invested that in 20 projects (£50 a time). All circa 5-8%. I had one company go bust on me so lost £32 on that one, but taking that into account I have had 5.2% return on my money year on year. Pretty good in todays market @pete.

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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