Assetz Capital - Secured Business & Property Loans
Summary of Investment Proposition
The Assetz Capital platform predominantly enables investment in secured business loans, though a distinct property loan investment account is available. The platform features a provision fund and further seeks to mitigate risk via diversification.
I personally have £4,500 invested in the platform (£1,000 in a classic account and £3,500 in an IFISA). This is currently my biggest individual P2P investment. I chose to invest because I was attracted by the hands-off nature and strong returns offered by the 90 Day Access account.
If you sign-up today via my referral link and invest £1,000, you will benefit from £50 cashback. This offer is not available when signing up directly.
Time in business
Hands off investing
Summary of key features
The key features of the Assetz Capital investment account are listed below.
|Estimated annual returns||4.1% - 6.25% (automatic, hands-off investing) or up to 12.0% for manual lending accounts.|
|Loan security||Secured against business assets or property.|
|Provision fund||✓ (All accounts except for manual lending account)|
|Innovative Finance ISA||✓|
|Cashback offer||£50 if you invest £1,000, plus an additional 1.0% cashback (non-ISA) or 2.0% cashback (ISA) if you invest before 31 May 2019.|
Detailed Assetz Capital Review
Assetz Capital first launched in 2012 and has grown to become the second largest general business P2P lender in the UK (behind only Funding Circle). The business boasts over 30,000 lenders who have funded over £750 million of facilities and earned £70m to date.
Where does Assetz Capital invest my money and what investment options are there?
Assetz Capital offers a number of automatic lending accounts (where your funds are diversified across a number of loans on the platform) alongside a manual lending account where you select specific loans to invest in.
Automatic lending accounts
The automatic lending accounts include:
- Quick Access Account
- 30 day Access Account
- 90 day Access Account
- Property Secured Account
- Great British Business account
The first three accounts named above aim to provide immediate, 30 day and 90 day access to your funds, respectively, subject to normal market conditions. Both the Property Secured Account and Great British Business account similarly allow you to sell your loans at any time, though no specific timeline is quoted for how long that will take.
All of the automatic lending accounts are protected by a provision fund.
Manual lending account
The manual lending account should be considered separately as it is more hands-on in nature. When investing in this account, you will need to manually select your loan investments.
The potential upside is higher returns of up to 12.0%, but this comes with increased risk due to reduced diversification and no provision fund protection.
How frequently is interest paid on the money I invest?
Interest on funds invested in the Quick Access Account, 30 Day Access Account or 90 Day Access Account is paid once a month, on the first day of the month.
Interest on the Property Secured Account or Great British Business Account is paid at varying times throughout the month (depending on the profile agreed with the underlying borrowers).
How good is the website reporting?
The investment dashboard is clear and easy to use.
Upon logging in, you are greeted with some high level reporting with your various account balances on display. For example, I can see that I have £2,500 within the 90 Day Access Account within my IFISA:
If required, you can dig deeper and see the underlying loan holdings:
You can also generate tax statements which summarise your taxable income in any tax year.
What lending data does Assetz Capital publicly provide investors?
Assetz Capital currently provides high level data to potential investors, though this is not updated on a regular basis.
- Loans originated
- Average interest rate across portfolio
- Projected lifetime bad debt rate
- Current actual lifetime bad debt rate
- Loans realised
- Current default exposure
Is money invested in Assetz Capital protected?
Assetz SME Capital Ltd is authorised by the FCA (link).
Authorised status does not mean that money invested is covered by the FSCS protection scheme which applies to banks, building societies and credit unions only. However, it does provide some comfort as authorised firms must comply with client asset rules which set out how firms hold and control client money.
Generally, it’s important to remember that investing in P2P lending is riskier than putting your money into a savings account. The two key risks in my view are 1) borrowers do not repay on time and 2) Assetz Capital itself goes into administration. We discuss both of these scenarios below.
Risk of borrowers not repaying on time – When investing via one of the automatic lending accounts, the platform aims to mitigate this risk via 1) diversification and 2) a provision fund to cover potential losses.
Risk of Assetz Capital going into administration – Whilst Assetz Capital were profitable in the two financial years to March 2018 (March 2019 results not yet released), you should always give consideration to the risk of platform failure. As an FCA authorised business, Assetz Capital is required to have a contingency plan in the event of going out of business. The company states that if the business went into administration, new agents would be appointed to manage existing loans and the money invested. All security in relation to loans outstanding would not be affected by any insolvency of Assetz Capital. In this scenario, it is likely that you would experience delays in accessing your invested funds.
How easy is the sign-up process?
I found the sign-up process to be very quick and easy. If you are interested, you can set up an account with no commitment to investing funds (click here).
How can I pay money into my Assetz Capital account?
Deposits must be made via bank transfer. In my experience, deposits are typically received
Does Assetz Capital offer an IFISA?
Yes – all of the various investment accounts can be invested in a classic account or an IFISA. The only difference is that interest income generated in an IFISA is not subject to personal income tax.
How good is the feedback online for Funding Circle?
Assetz Capital has strong feedback online with a TrustScore of 9.1/10 on TrustPilot based on 540 reviews (last checked May 2019).
What cashback does Assetz Capital offer its new investors?
If you sign-up today via my referral link and invest £1,000, you will benefit from £50 cashback. This offer is currently only available via referral.