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We’re excited to announce the most recent changes to our auto bidding tool, BidPal.For years lenders have used BidPal to help them manage their Rebs lending portfolio, helping them invest in a wide range of loans whilst saving them valuable time, and now we’ve improved it to make managing your lending account even easier and to allow you to make more tailored auto lending decisions.
BidPal is our automated lending tool, that auto applies bids on behalf of lenders as and when a new loan is listed that meets their pre-set lending criteria. This means lenders that have set up BidPal do not need to log in each time a new loan is listed to make a bid.
Previously the preferences available for lenders to set were limited to industry sector and risk rating. We’ve now extended the options available to lenders, allowing you to make more defined bidding preferences to suit your lending appetite.
You will now be able to choose to include or exclude certain regions that you do or do not want to lend to.
The new BidPal will also include an option to auto-buy loans on the Secondary Marketplace as well as bid on the Primary Marketplace. Lenders may choose to set one or the other or both auto-bidding options.
Where a lender chooses to buy micro loans from the Secondary Marketplace, they will be buying micro loans that other lenders are selling on. These are loans that have already been funded via the Primary Marketplace. When loan parts become available that match your buying preferences and where you have sufficient Available Balance, these micro loans will be automatically bought and added to your loan portfolio.
We’ve also introduced new rules that allows users more flexibility over their BidPal criteria. Over time, we hope to further expand on the data options that a lender can set for their lending rules.
Currently lenders can configure the settings such as:
The buy logic is triggered when a user sells their microloan(s), there is now a ‘clearing process’ to check if the microloan meets the buy requirements of another user and where it does, the purchase will occur instantly. This feature allows lenders to grow a diversified portfolio quickly while simultaneously bringing an increase in liquidity to the platform. When selling microloans, you may notice a message “1 of 1 microloans sold.” When you see this, another lender’s BidPal Buy function has purchased your microloan automatically.
BidPal does not guarantee that all your funds will always be lent out, that you will never encounter a default or that your account will deliver a set interest rate.
Available funds are only lent out to a pre-set proportion of your lending portfolio, you can alter all this in the settings.
If your funds are auto bid on a loan, there is no guarantee that you will not be outbid, if you are outbid you will be alerted (according to your notification settings), and will be able to login and rebid should you choose.
Lending to businesses carries the risk of default. If a business fails to repay a loan you could lose all or part of your capital. Therefore you should carefully consider how best to mitigate these risks, consider perhaps divesting via the secondary market or reviewing the performance of the various loan risk ratings and reviewing your Bidpal settings regularly.
Whilst BidPal will auto bid at the highest rate available on a loan, it does not guarantee a set return on any single loan or on your portfolio.
As a lender, lending to businesses, you should be aware of the risks involved in lending. Understanding the risks is the first step to building a strong loan investment portfolio through careful management.
Whilst BidPal reduces the need to log in as regularly to ensure that your funds are working for you, lenders should still ensure that they are monitoring their lending account to ensure that it is performing to their expectations and to regularly review their investment strategy depending on the performance of their investments.
You may wish to get some treats for your mummy or you may have plans to be goblin them all down yourself. “Witch”ever way you decide to celebrate this Halloween don’t have nightmares about missing out on Candy Hero’s devilishly good sweets and enjoy our little couplet.
The cold has set in so fire up your combi
Or else you’ll be walking around like a zombie
Sit back and relax with a tonic and gin
Or try your hand at carving a pumpkin
If trick or treat is asked by a man called Death
Give him a sweet or he’ll take your last breath
I’d say werewolves scare me the most
For others however, it could be a ghost
If you’re out and about, or round a campfire
Beware of Dracula or any other vampire
A final warning as Halloween approaches,
Watch out for the headless horseman and his coaches
Each of these monsters are deadly for sure
If you get bitten or worse, visit me for a cure.
Many people don’t trust themselves to invest (or lend) so they leave it to others. Independent Financial Advisers can be helpful with advising on a range of customers about their options, relevant to their circumstances.
We believe, that with little study and research, anyone can learn the basic investment skills, to understand risk and reward. One of the things our lenders love is receiving interest payments each month. Many investments don’t pay interest monthly, but the borrowers using our platform repay their loan on a Direct Debit. So as you collect this repayment onto your online balance, you can re-lend them to other businesses. This is known as compounding. (Where you can earn interest on previous interest earnings).
Many other platforms will encourage you to be passive about investing, offering little information about the businesses. They sell their service on ease, but they also tend to pay out less. By making a little effort, you can earn considerably more. We’ll show you how, but before we do, have a look at the evidence.
Here is a histogram of Net Returns for lenders as at October 12th 2018. (a live version is on our stats page, under the Net Returns tab)
From this chart, you can see the green line peaks from the 3-4% segment and continues to be high until the 9-10% segment. This shows how most lenders are earning between 3% and 10%, but notice how 85 lenders are earning over 20% (on the far right). This article explains how they do it, so you can learn from their investment strategies.
Read our 10 tips on peer to peer lending – This article covers some key guidance on strategies that have proven to work.
Understanding how your portfolio matures is important. With any platform, there’s a honeymoon period for newbies, but there’s also a hard phase around year’s 2-4 where you have sustained your first defaults but not had any recoveries. In this article, Kylie writes about various phases in the journey to mature investing. It’s a good read.
When you see a business with a unique idea or product, take a minute to consider who their target customers are. If you know anyone suitable, why not buy them a gift or simply make a referral. Word of mouth marketing is so powerful. Sometimes a new customer can make the difference to a business surviving. This is especially true of seasonal businesses, where they may be vulnerable out of season. Like the facebook page, follow them on Twitter, share the videos, be an ambassador for your borrowers, they will love you for it.
Did you know one of our top lenders retired early to invest full time on our platform? Gross earnings are shown below, (from a peak capital employed of: £624,000). Being smart about peer-to-business lending allowed them to earn more in interest than most people’s salary!
It has not all been rosy, over the six years this lender has also had a £105,562.93 loss from bad and doubtful debt. So their profit is £509,662.71 – £105,562.93 = £404,099.78 before fees and taxes.
This lender has an average weighted Net Return of 12.74%, by being diligent about lending decisions, they can support a great standard of living from a few hours work each day.
Notice also how 33 lenders (on the far left) have a Net Return of < -20%. It is possible to lose money if you are not careful. Investing for higher returns carries some risks. For example, lending to inexperienced business people, a business you don’t understand, offering little security on the loan, is not a good idea. Notice that the red line (lenders who invest over £5,000) and the blue line (lenders with more than 10 loans).
The above figures are taken from actual lenders from rebuildingsociety.com during various stages of their investment history with the platform. Remember that past returns are not indicative of future returns and your own experience may vary.
If you are unfamiliar with the risks of peer-to-peer lending, read more here.
Overall, our past performance has been good for most lenders, but that could change. For example in an economic downturn, not all businesses will survive.
The best way to learn is by doing, open an account today to get started, you can try lending from as little as £10 on each loan.
To learn more about lending visit our Lender Library.
We took some time to speak to Montgomery Food International about their business and their plans going forward.