Past Performance

We provide our loan book data in a number of ways. Our ‘live’ loan book statistics are shown on the home page of our website and on the MoneyThing platform ‘live loans’ page. We also provide daily statistics to AltFi for their industry comparisons.

The statistics on this page use historical data and are updated on a quarterly basis.

Figures shown below are correct as of 2nd July 2017.

Q1 2016 Q2 2016  Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Cumulative lending £10,685,771 £18,165,570 £29,034,904 £41,029,306 £51,595,354 £65,409,508 £71,269,631
Current loan book £5,011,399 £9,480,346 £15,432,005 £23,374,594 £26,442,535 £34,105,009 £28,036,551
New lending in quarter £4,642,370 £7,479,799 £10,869,334 £11,994,402 £10,566,048 £13,814,154 £5,860,123
Capital repaid in quarter £234,100 £745,000 £2,866,813 £565,000 £1,681,795 £2,995,318 £6,090,789
Total renewed in quarter £564,500 £2,038,000 £4,352,500 £3,863,750 £4,776,500 £3,156,362 £5,087,951
Interest earned during the quarter £141,874 £270,599 £402,673 £558,328 £728,632 £910,687 £1,030,615

Actual and Expected Defaults and Losses

2015 2016 2017
Expected Defaults 3% 4% 6%
Actual Defaults 0% 0%
Actual Losses 0% 0%

Our approach to defaults and losses

To date, there have been no defaults or losses on the MoneyThing platform, although past performance is no guarantee of future performance.

We have a track record of completed loans where capital and interest have been paid back in full. However, as we are a young platform many of our loans are still live and as such we are building up our performance record of completed loans.

Our approach is to firstly prevent defaults and losses from occurring. We do this by only accepting asset-backed loans and applying an appropriate loan-to-value ratio and also by spending time understanding our borrowers and their ability to service the interest and repay the capital at the end of the term.

That said, tangible assets are subject to changes in value and it is possible that during a loan term an asset’s value may decline. This is an inevitable risk of lending, however, with a prudent and diversified portfolio a lender can seek to mitigate potential losses.

We manage our loan book closely and we have processes in place ready to deal with arrears and defaults should they occur. If borrowers’ circumstances change and they are unable meet the terms of the loan agreement, we place the loan into default and pass it to our solicitors to recover the funds.

Expected Defaults

MoneyThing has no historical default data to use to predict future defaults and losses as to date we have had zero defaults.

At MoneyThing we finance an array of loan types, providing our lenders with the opportunity for a varied and diverse portfolio. We assess each loan deal on a case-by-case basis, taking into consideration several factors including historical business performance, forecasts and current financing obligations of our borrowers. Calculating a predicted blanket default rate across the portfolio is therefore difficult given this variability, further compounded by our historical performance to date of zero defaults.

Having conducted thorough market research on prevailing default rates amongst peer-to-peer lenders, together with consideration of our loan portfolio, we have judged an average default rate of 6% to be a prudent forecast default rate for 2017.

Importantly, it should be noted that a defaulted loan does not necessarily mean losses will be incurred. Please refer below for loss predictions.

Expected Losses

All of our loans are asset-backed. We assess every loan on an individual basis with regards to future performance and risk of default. For example, we typically offer up to 70% loan-to-value (“LTV”) on property-backed loans whereas more exotic items such as paintings or jewellery will tend to be at a lower LTV – typically no higher than 65%.

If a loan defaults, we have legal entitlement to seize the underlying asset supporting the loan. Provided that the asset has not fallen in value by more than the LTV applied to the loan, lenders will not suffer any capital loss.

In the event that the underlying asset value has decreased during the loan term by an amount greater than the LTV applied, capital losses will be incurred.

As stated, a typical MoneyThing loan will be at 70% LTV or less. This therefore provides a substantial 30% buffer regarding the underlying asset value. Let’s consider how this would work, however, in an atypical scenario whereby we have granted a loan at 85% LTV.

Loan: £850,000

Asset: £1,000,000

A 30% reduction in asset value would result in a realisable value of £700,000, giving rise to a loss of £150,000. If we assume this happens on 6 of every 100 loans and for this example we assume all loans are the same, then we would see losses as follows:

Predicted losses:

£150,000 x 6 = £900,000

Gross loan book:

£850,000 x 100 = £85,000,000

The potential loss as a percentage of the loan book in this example would therefore be 1.06%.

The impact of such a loss would be further reduced for a diversified lender.

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