Assetz Capital Review (UK Lender)
(4.5 / 5)
My Actual Account Growth
– Updated October 2018
My 100% unbiased Assetz Capital review. Based on my own investing experience. Highlighting the positives and negatives of investing with one of the UK’s fastest growing Peer-to-Peer lenders.
Assets Capital is a medium to large size Peer to Peer – Peer to Business (P2P/P2B) lender. Offering very reasonable returns from 4.10% for instant access, auto investment portfolios. And over 15% for manually selected investments. Providing loans to property developers and small businesses throughout the UK (most of which are secured by property). I like Assetz Capital, and consider them to be one of the better options for high returns with asset security as a big plus.
Obvious Investor Easy-Info Table
|Overall Rating*:||(4.5 / 5)|
|Who can invest:|
|Estimated Return:||4.00% - 15.00% depending on account|
|My Actual Return:||6.12%|
|Risk Rating*:||3/10 - Low-Medium|
|Deposit Funds:||Bank Transfer. |
Typically Available in 2 - 24 hours.
|Early Exit:||Yes, no cost under normal market conditions.|
QAA account fastest exit.
|Auto Invest:||Yes - 4 accounts|
|Manual Invest:||Yes, higher returns but no provision fund.|
|Loan Types:||Various Business Loans.|
|Default Rates:||Expected 4.6% actual below 3%|
|Loan Security:||Yes. |
Most loans secured by property and/or
|Provision Fund:||Yes. |
On 4 auto-invest accounts, not on manual invest.
|Time to Invest:||Usually Quick. |
Couple of days depending on loan availability
|Time to Mange:||None (auto-invest).|
Depends on your research (manual)
|Payments Received:||Monthly - Various times throughout the month.|
|Amount Lent:||£609m+ (Sep 2018)|
|Number of Investors:||29,000+|
|Loan/Dflt Stats:||Yes, Click Here|
|Telephone:||0800 470 0430|
|IFISA/IRA**:||Yes - IFISA - Click here for more info.|
|Cashback**:||Contact Assetz for information on offers.|
|How to Sign Up**:||Sign Up Here!|
Assetz Capital were launched in 2013 in the UK as the first secured Peer to Peer business lender. In the 5 or so years they have been in business, they have become one of the best known and trusted P2P/P2B companies in the UK.
Current figures suggest that they have lent over £600 million (as of September 2018) in the 5 or so years they have been in business, which is not bad at all. Default rates for 2017 were 3.2% and bad debt rates were 1.9%, which are very good rates for peer to peer companies lending to small businesses.
Assetz Capital are regulated by the UK’s Financial Conduct Authority (FCA) with full permissions under FCA number 724996. They gained FCA permissions in September, 2017. It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme), so capital is not protected as it would be in a bank.
Opening an account with Assetz Capital is fairly easy. Just the usual ID checks. If they can verify you though one of the UK’s credit agencies, you will be approved immediately. If not, you may need to send them a copy of your passport or driving license and a utility bill or bank statement. Residents of most countries can sign up, including USA residents. However you’ll need a UK bank account. See my TransferWise Borderless Account review for more information on how it may be possible to get UK banking details if you’re not a UK resident.
Deposits & Withdrawals
Deposits and Withdrawals are made by bank transfer from a UK bank. No debit or credit card deposits are available. Deposits usually show up in your account the same or the next working day. Withdrawals typically take 2 – 3- business days. It is possible to make deposits directly in to the individual Assetz Capital lending account by using a special reference number supplied by them when you sign up.
Time to Become Invested
It can take a few days to get in to loans when in any of the auto-invest accounts (except the QAA, Quick Access Account) which lends out the funds fairly quickly. I’ve found it varies based on the amount of capital I am investing, as well as the Assetz loan book. On the MLA (Manual Lending Account) it entirely depends on how long it takes to research the loans, and how much diversification you want. As you can see by the screenshot below, it’s easy to see how much money in each account is waiting for investment.
Who are we lending to?
Assetz Capital is a true Peer to Peer Lender where lenders are lending directly to borrowers who are typically small to medium size British businesses. Loan agreements are between the lender and the borrower.
Most (but not all) of Assetz Capital’s loans are secured by property, business assets or personal guarantees from company directors. In the PSA (Property Secured Account) all loans are secured against property with reasonable LTV’s (Loan to Value ratios). Assetz Capital’s website always gives good information on security. It lists all items on the loan page, and if you hover over the item, it gives further detail.
Assetz Capital has an expected lifetime default rate of 4.6% with an actual rate of below 3%. Their non recoverable bad debt rate is what is really impressive though at an expected 0.1% with an actual of 0.0% meaning that so far they have been able to recover almost all of the lent capital. You can see current statistics here.
Most of Assetz Capital’s loans amortize, meaning you receive capital and interest payments every month. This reduces the risk of the loan compared to a non-amortizing loan in which nothing is received until the end of the loan period, or only interest is received monthly and then the capital repaid at the end of the loan period. Amortization is an accounting technique used to lower the cost value of a finite life or intangible asset incrementally through scheduled charges to income. Amortization is the paying off of debt with a fixed repayment schedule in regular installments over time.
It’s easy to see when payments have been made, and when payments are due by drilling down in any loan listing.
Selling Loans and Withdrawing Capital
Assetz Capital don’t charge an exit fee for selling loans. In the QAA under “normal market conditions”, capital can be withdrawn from loans almost immediately providing there is enough other lenders capital in the account to cover your loans (typically not a problem). In the other auto-invest accounts, it can take anywhere from a few days to a couple of weeks or more to sell loans, all depending on market conditions. In the MLA it’s hard to gauge exit time as loans can only be sold if and when another investor chooses to purchase the loan.
Here you can see the invested capital in the QAA. Withdrawing shouldn’t be a problem here as of the time of this screenshot.
Assetz Capital takes care of diversifying loans in the auto-invest account. It is mostly good, however I have seen instances where it is possible to get a big chunk of capital in to a single loan. In theory this shouldn’t matter because of the provision fund, however the fund is discretionary (meaning they don’t have to use it), and if it runs out, there could be a big chunk of capital go bad.
As you can see from the screenshot of my GBBA holdings below, when I sort my account by loan holding, I have a large amount in a couple of accounts. This doesn’t worry me too much because they are asset secured with good LTV’s.
Another thing to watch; if you have funds in a couple of different accounts, say the PSA, QAA and GBBA, you can end up with capital from both accounts in a single loan.
Assetz Capitals provision fund covers their auto-invest accounts. It aims to cover up to 5% of interest and capital repayments from bad debt. Under normal market conditions, this should cover any bad debt just fine, allowing the account to provide the indicated return rates. The fund is discretionary with Assetz Capital though, meaning they don’t “have” to use it if they don’t think it is necessary.
Assetz Capital offer an Innovative Finance ISA which was launched in December 2017 for UK residents.
Assetz Capital has 5 different investment accounts. At the top of the accounts page on their website is displayed your average combined interest rates between all 5 accounts.
The PSA as you may have guessed, offers loans secured on property at a current rate of 5.50%
Offers a little less percentage yield at 5.10%. However under normal market conditions, they say you can make withdrawals with 30 days notice.
The QAA is a really great option. It offers instant access to funds contained within, similar to an easy-access bank account under normal market conditions. I have to say out of all the P2P lenders, the QAA sets Assetz Capital above the other options out there because it pays a good return.
Other companies like Ratesetter (Rolling Rate Account) have quick access accounts, but they don’t typically pay as much interest. The other great thing about the QAA, when waiting to invest in the auto-lend accounts, money can be placed here to earn 4.10%. This greatly minimizes cash drag on the other accounts. Loan repayments from other accounts can also be swept here for the same reason.
GBBA offers a higher rate of 6.25% on loans exclusively to businesses, most of which I find are secured anyway. I put most of my money in the GBBA for the “hands off” auto-invest at the highest rate they offer with a provision fund.
It’s important to point out that ALL of the Assetz Capital auto-invest funds (not the manual invest) have a provision fund in place. This can be used to offset defaults so lenders keep getting their payments while assets are sold to redeem principle.
With the MLA there are currently rates up to 15.00% available, however it takes time to invest and you need a little more experience with lending to know how creditworthy a company might be, and how good the asset security is. So if you’re not really interested in learning the ins and out of business credit, perhaps the auto-invest account are best.
There is no provision fund on the MLA, so we are subject to direct defaults on this account. However if you choose loans with a good Loan to Value (LTV), you should be able to recoup most of your money eventually in the event of a default.
The loan listing page shows good initial detail on the loan and also LTV’s for each loan.
And if you drill down a bit further, you get even more details on each of the loans individually.
If you do choose to use the Manual Lending Account, please remember the “Prime Directive” and be sure to diversify accordingly as there is no provision fund. Personally I don’t like having more than 0.5% of my portfolio to any single loan, but providing the loan has a good LTV, I would go a little more with Assetz as they have an excellent record of recovery and very low default rates.
Assetz Capital is one of my favorite peer to peer lenders. Their website is great, as are their returns for (mostly) secured property loans. I trust Assetz Capital with my money and I have no hesitation recommending them to other investors.
Thumbs Up Points for Assetz Capital
- Safety – medium size company with a good track record and makes preservation of your capital one of their top objectives. Most loans are property secured, and if you want to ensure they are, you can just invest in the Property Secured Account for a nice 5.50% rate.
- Auto-Invest – in all but one portfolio means virtually no time managing investments. Just send your money over, decide which portfolio you would like to invest in. Once your money is invested, you can sit back and watch the interest come in. Repayments can be reinvested automatically.
- Great Rates – for a property secured auto-invest account, the rates Assetz Capital offers are among the best in the business.
- Website – the Assets Capital website is very comprehensive, but also very easy to use and understand once you get the hang of it. It can take a while to learn, it but once you get to know the interface it works well. Some P2P websites leave a lot to be desired.
- Large Investments –although Assetz Capitals loan book is not as big as Funding Circles, they still manage to gobble up large investments. You just need to keep an eye on the loans in the auto-invest, to make sure they are distributing the money as diversified as possible so you don’t get too much in a single loan.
- No minimum investment – if your portfolio is still small, it’s still easy to invest with Assetz Capital. They have even put me in to loan parts of just 0.01p.
- Quick Access Account (QAA) – is great for getting a good interest rate, especially for almost instantly accessible funds under normal market conditions.
- Zero cost exit –Assetz Capital dosen’t charge any points for exiting your investment early (providing there are buyers available to buy your loan parts). It is very easy to exit the QAA but it can take longer on the other accounts depending on how many buyers there are available.
- Provision Fund – in the auto-invest account the fund should pay out on any defaults, although Assetz Capital does say that the fund is “discretionary” so it’s good to keep that in mind.
- Financial Conduct Authority (FCA) Regulated.
- IFISA available for UK investors
Thumbs Down Points for Assetz Capital
- Initial Investment Time – It can take a little bit of time to get invested because of the popularity of Assetz Capital. And the sheer number of investors trying to get in. The QAA account makes up for it though, because your money will sit there earning 4.10% interest from day one while it’s waiting to be invested in the longer term portfolios.
- Unsecured Loans – some (very few) of the Assets Capital loans are unsecured loans given to businesses, so if things were to go bad, you don’t have any collateral. If this worries you, just invest in the Property Secured account and it should put your mind at rest a little.
- Large Loan Chunks – keep an eye on the loans you get invested in through the auto-lend if you have a sizeable account, as they seem to be lacking a bit of diversification when the account gets bigger.
Risk Factor – 3/10 – Low – Medium
I consider Assetz Capital to be at the lower to medium end of the risk scale. Taking into consideration that many of its loans are secured, it’s hard not to give it a lower risk rating. However they are lending to businesses, which are inherently more risky then lending to individuals, and their diversification is not always my favorite. I like Assets Capital a lot however and put a lot of trust in them. They are one of my largest lender accounts. As you can see by the TrustPilot review above, many other people like them too, both investors and borrowers alike.
Who Can Invest with Assetz Capital
* My opinions on ratings and risk rating factors refer to my personal experiences with the lender. Including factual data such as interest rates, loan types, security, platform history, default numbers etc. Read my Disclaimer before making investment decisions.
**Affiliated! – I am an investor with this company! (I only review companies I invest with so I can provide an honest evaluation based on my own experience). If you click on an affiliate link, I may receive a small commission, at absolutely no cost to you. It helps me to run this website and continue to offer new reviews and updates.