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.
Please read my comprehensive Assetz Capital review below, and if you find it useful, I would be grateful if you would sign-up via my referral link (no cashback at present – paused due to Coronavirus).
Updated view in light of the ongoing Coronavirus pandemic (06/02/2021)
Assetz Capital, in my view, were a little slow initially to react to the investor liquidity issues faced across its Quick Access, 30 Day Access and 90 Day Access accounts. However, they have since created the Access Account marketplace which gives investors the ability to discount loan holdings to secure an early sale of their investments (or wait to receive repayment in full once the loan has repaid). I think that this was the right decision and am pleased with how Assetz Capital has managed the crisis. Target interest rates have fallen, but not dramatically so. A lender membership fee of a Lender Membership Fee of 0.9% per annum, which is the equivalent of 0.075% per month currently applies – this is being phased out over the next few months. Assetz has stated that starting in February 2021, this fee will reduce by 25%. This will rise to 50% in March, 75% in April and 100% reduction down to zero again from May 2021 onwards.
Assetz Capital - Secured Business & Property Loans
Name: Assetz Capital
Description: A secured business lending platform which has an active secondary market for its Access and manual lending accounts.
- 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||3.75% - 4.1% (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||Temporarily paused due to COVID-19.|
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
These accounts aim to provide immediate, 30 day and 90 day access to your funds, respectively, subject to normal market conditions. All of the automatic lending accounts are protected by a provision fund.
Note that at present, due to the coronavirus pandemic, Assetz Capital has deemed that we are no longer in a period of ‘normal market conditions’. Liquidity at par value is therefore not available on these timelines. However, holdings in the Access Accounts can be traded at a discount on the secondary market. Equally, this means that new investments can be made into the Access Accounts at a discount (depending on availability).
For example, if you wanted to secure £100 of holdings in the Access Accounts, you could potentially acquire this for £99 (1.00% discount) if a seller is looking to exit at 1.00% discount. The value of the discount will vary depending on the best discount currently being offered by investors seeking to exit their investment.
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 funds invested in the Property Secured Account or Great British Business Accounts, which are now closed to new investment, are 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 – In the financial year ending 30 March 2020, Assetz Capital were profitable at EBITDA level (excluding exceptional costs incurred in the year). Despite this, 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 on the following working day.
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.
What cashback does Assetz Capital offer its new investors?
Assetz Capital has currently paused its cashback offer.