A refreshingly liquid secondary loan market and embracing platform automation. We talk to two long-lending platform users, to hear about their Proplender experiences.
B’s story
B is an experienced peer to peer lender who has been investing in property-backed loans through Proplend for three years. Recently he needed to liquidate his sizeable portfolio as quickly as possible before emigrating to a warmer climate and we were pleased we could help facilitate this – with the considerable help of fellow Proplenders via the Proplend Loan Exchange (PLE)
The PLE gives Lenders the opportunity to make their loan parts available to their peers before the end of term, should they need to. Liquidity cannot be guaranteed but the (all-time) average sale waiting period to date has been between 10 and 11 eleven hours – a world away from the lengthy delays that have been hitting the headlines on some platforms.
Surpassing B’s expectations, more than 800 loan parts were made available over the course of three days, all of which were snapped up within the day.
“I’d used the secondary market to buy already interest-bearing loan parts during term, so I was aware that you normally have to be quick to snap loan parts up when they become available” said B. “I was fairly confident that there would be healthy demand for my portfolio but given the volumes and some of the stories you hear about restrictions placed on some platforms, I thought I might have to be patient. I needn’t have worried” he added.
There are a number of reasons why Lenders may want to take advantage of the secondary market and even for the those that haven’t used it to sell, it’s nice to know it’s there – and just as importantly, its liquid!
In B’s case, he’d enjoyed the investment opportunities, with no issues over the service or proposition he’d received. And when it came down to it, he was just as grateful for the ease and speed of exit – when he needed it.
“I’m a big fan of the platform and their LTV-based commercial property-backed proposition. I fully expected to hold my loans to term and didn’t think I’d be relying on the exchange to do anything other than grow my holding. I wouldn’t be exiting the platform for any other reason and it’s nice to think other Lenders will benefit from the loans I’ve made available. That mutual benefit is what peer to peer is all about”, B concluded.
M’s story
M first heard about P2P Lending through a Which magazine feature 4 or 5 years ago and having read-up on a few of the property-backed platforms, decided to give Proplend a try.
Starting with our minimum investment through a Classic account, she has grown her portfolio steadily over the last few years and was delighted when Proplend launched their [Innovative Finance] ISA in 2017.
“I trust Proplend and with my ISA I don’t have to worry about paying tax either. You haven’t had any [investor] losses so far and I do feel that you’re particular about what you go for”, M told us. “We don’t want you to go for any old thing – it’s right that you’re cautious.”
M started Lending because she was looking for better returns than her building society account offered – she decided to limit her investing to our lower risk (maximum 50% loan to value) Tranche A investments. Now in her 90th year, M has built up a diversified portfolio of loans backed by commercial property, with a value at least twice that of her capital at risk.
As well as utilising our monthly interest facility to have her loan interest regularly ‘swept’ to her designated bank account, M has also embraced our convenient ‘Auto-Lend’ facility during 2019 to have her funds automatically invested to available loans.
After taking the time to chat through with us exactly how the facility works, she now regularly takes advantage of Auto-Lend’s priority access to Tranche A investments for new loans. She’s also comfortable varying her maximum investment settings for each loan.
“I’m not always free at midday to login for new loans, so Auto-Lend can do the investing for me”, states M. “I keep an eye on the pending loans list and then look out for the ones that I’m interested in. I like that you can easily see when Auto-Lend is on or off.”
“The other thing that’s important to me, is that I feel like I can ring up when I have any questions”, M added. I don’t want to be a nuisance, but I don’t feel that I am when I call. Everyone seems to be quite friendly and helpful”, she concluded.
Thanks to M and B for agreeing to share their experiences with us. More Proplender stories will follow in the new year. If you’d like to take part, please contact the Lender team. We don’t need to include your full name and after contacting you for a short interview, we will check you’re happy that your story is a true reflection of your feedback before publishing.
Related to this post …
More about Proplend’s automated investment facility, ‘Auto-Lend
Blog article (July 2019) – 8 ways Proplenders are using Auto-Lend
Blog article (September 2019) – Auto-Lend one year on
Blog article (September 2018) – Top 10 reasons to invest with Proplend
Become a ‘Proplender’ – sign up for a Proplend ISA or Classic Account
