Investments

on the rebuildingsociety.com blog

11th Jan, 2019

What is an ISA Account?

We know that many of you are already savvy investors and many savers know about ISAs. However, our lender base is made up of a variety of different people with varying levels of experience and understanding, so we thought we’d write a short informative piece on ISAs to help answer any questions our lenders might have.

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06th Nov, 2018

Festive Preparation for Your Business

With the Bonfire smoke clearing and the sound of fireworks still ringing, in our ears many people now turn to Christmas preparation and celebrations. Whilst the upcoming festive season brings with it plenty of fun and reasons for celebrations, it is often a challenging time for business owners, particularly if planning hasn’t been done to ensure business continues as normal through this disruptive period.

We’ve put together a list of tips to help you ensure that you make the necessary arrangements to avoid disruption to service or unexpected issues during the festive period and to ensure that you set your business up for the best possible start to 2019!
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15th Oct, 2018

Investing money selectively is one of the best ways to invest

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)

Net Returns histogram for rebuildingsociety.com

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.

Invest your money the savvy way

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.

Many happy returns

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.

Getting good at investing is addictive

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!

  • 2013 – (the first year was a part-year) – £23,945.89
  • 2014 – £99,259.85
  • 2015 – £84,114.08
  • 2016 – £106,923.64
  • 2017 – £119,534.66
  • 2018 – £75,884.59 (part year until the 12th October)

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).

Understand the Risks

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.


16th Aug, 2018

Peer-to-business Lending – It’s a Journey Not a Destination

If you’re new to peer -to-business lending you might be wondering what you’re in for, if you’re a seasoned P2B lender, you may by now understand the various processes and cycles involved in lending to businesses.

As a platform we’ve been facilitating lending to UK SMEs for over 6 years and have noticed certain trends in lender and borrower activity. We thought it might be useful to give you an insight into what you might expect as a lender. (more…)


31st Jul, 2018

Transparency Matters

Peer-to business lending started out with the ambition to be better than the banks, by being more open and transparent, more ethical, more dynamic and better for businesses and lenders alike. Since the early days of the industry, we’ve seen platforms come and go and there have been many changes to the way in which platforms operate.

Many platforms started off as marketplace lenders, arguably the most transparent of the P2P models, but over time many platforms have changed their models, today few platforms still offer real marketplace lending, and even fewer offer the level of transparency on which the industry built its foundations.

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15th May, 2018

Yorkshire Post Speak with Our NED Investment Director About Working as a Non-Executive Director

A recent article in the Yorkshire Post, featured Georgina Mitchell, our NED Investment Director and explored how one becomes a Non-executive Director and what the job entails.

Georgina, previously of Redmayne-Bentley, completed the Financial Times Non-Executive Director Diploma in her journey to becoming a NED.

In the article, Georgina discusses her passion for business and her journey to becoming a non-exec at rebuildingsociety.com, investUp and her plans to launch a commercial coaching group and peer board with Uspire Network. 

Through her engagement with Yorkshire businesses, Georgina has become quite involved within the FinTech circles, having recently delivered a talk at the annual FinTech North Conference in Leeds and will be delivering a further talk at the inaugural FinTech North Manchester event on the 22nd May.

 


08th Jan, 2015

Self-Assessment Tax Return Deadline

With the festive season behind us, many self-employed professionals will be turning their attention towards the looming deadline for self-assessment tax returns. This deadline, however, is also applicable to members of the rebuildingsociety.com who are earning money from their investments.

The deadline for online tax returns for the 2013-2014 financial year is midnight on 31 January 2015. An automatic penalty of £100 will be incurred for late returns (even if you have no tax to pay) and continuously delayed returns could see penalties increase to as much as £1,600.

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01st Dec, 2013

The best way to invest money for a property deposit in 2014

In 2014, it might be time to look at innovative ways of putting enough cash aside to get on the bottom rung of the housing ladder as the future of Help to Buy comes into the spotlight, as Nick Moules explains.

The reality

Since the housing crash, it has been well-publicised that first-time buyers (FTBs) have been frozen out of the housing market. The Help to Buy scheme has an uncertain future (before it has really started) and if evidence of a housing bubble grows, political pressure to cancel the scheme will be ramped up.

From a lender’s perspective, it’s a tough ask to support FTBs as they’re typically the riskiest part of the market without the incentives; loans are at a high loan to value (LTV) and they’re under regulatory pressure to reduce risk and balance their books.

But it’s worse for the would-be borrowers for several reasons: (more…)


29th Nov, 2013

90% of Investors in Peer-to-Business Lending Invest More Than £1k

Nick Moules talks at Knowledge Peers’ Exchange 2013

 

Knowledge Peers hosted an insightful event at the Oval on 28 November focussing on emerging trends in the alternative finance market for SMEs.

Based around research compiled by Knowledge Peers on the alternative finance market, the event attracted speakers from Market Invoice, ThinCats, Funding Circle, Asset Match, Funding Knight, Crowdcube, Seedrs and more.

Knowledge Peers’ research will be published in full in the coming weeks and we’ll link to it, but some headlines are:

  • 90% of investors contributed more than £1k
  • The industries which have been loaned the most by peer-to-business lenders are 1) manufacturing 2) engineering and 3) technology.
  • Businesses in London have borrowed the most, followed by the South East and then the Midlands.

 


15th Apr, 2013

Making Your Business Investible

This week, we’re welcoming a guest blogger to the site, Rodger Seaman of Advantage Business Partnerships. Rodger is a business growth specialist and here he offers some tips on acquiring angel investment, which can sometimes be the solution for young businesses looking to raise finance and the expertise of a seasoned professional investor. If you would like to contribute a blog on a related topic in the future, contact nick@rebuildingsociety.com

“So how do investors select the businesses that they decide to invest in? More than two-thirds of private investors recently polled said ‘being personally moved by the idea’ was a leading factor when evaluating a venture for potential investment. The potential of the market and the prior experience of the entrepreneurs were also key factors.

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