What Opportunities Are Available To P2P Investors During The Pandemic?

Throughout the coronavirus pandemic, there have been reports of peer-to-peer (P2P) lenders instituting a number of measures to counteract the current economic situation. In previous articles, we have explored how P2P platforms have adjusted to the pandemic. Whether it be suspending the secondary market or other forbearance measures, there has been a reduction in returns available to investors, but P2P platforms are still operational. It's important to remember that your capital is at risk when investing in P2P sites. But each platform has its own measures to try to protect investors.

The information we have provided has been extracted from the P2P sites themselves and is correct at the date of publication. Please check the terms and conditions when investing. In this article we explore what each of the four biggest P2P platforms have available for investors who may be looking for returns.

P2P Platform	What is it offering to investors?	Nextfin’s Commentary
Assetz Capital	The platform has announced it will keep its platform open to retail investors while funding CBILS. From the start of May the platform introduced a 0.9 per cent per annum lender fee that will be in place for at least the next three months, the equivalent of 0.07 percent each month. The platform offers investors returns from 4.1 percent to 5.75 percent depending on the type of account they choose to use.	CBILS Loans will be a great addition to Assetz Capital, as they will be 85% guaranteed by the government, giving investors more security. Assetz Capital is a property lender. Therefore, their loans will be secured against an asset. It will be interesting to see the terms and conditions of these loans as well as the estimated returns on investment. A loan secured against the government and a private asset should have a positive effect on Assetz Capital’s ability to provide investors security.
Zopa	Zopa has not announced any changes to its target interest rates yet due to Covid-19. Its lower-risk Core product offers projected returns of between 3.4 and five per cent, while its Plus account offers four to six per cent. However, it has stopped lending to borrowers who would normally fall into its higher risk bands C, D and E. The move means its Core product will only fund loans in the A* and A bracket while Zopa Plus will also fund loans in the B risk band.	Zopa specialises in retail loans, so do not qualify for any government guarantees or support. Again, it will be interesting to see how Zopa cope with slower investment takeup and the predicted increase in unemployment which could affect retail borrowers. It's good to see that they have changed their risk profiling, however, it's their existing loans that could be affected during this crisis. It's worth noting that Zopa is the longest established P2P platform in the UK and has survived the 2008 financial crash.
Funding Circle	Retail investors are no longer able to fund new loans through the UK’s only publicly-listed P2P lender. After becoming the first P2P lender to be accredited under the coronavirus business interruption loan scheme (CBILS), Funding Circle has paused all non-CBILS lending from retail and institutional investors to concentrate on supporting the government programme.	CBILS Loans will be a great addition to Funding Circle, as they will be 85% guaranteed by the government, giving investors more security. However, the loans will be issued based on Funding Circle’s lending criteria in a healthy economy. It will be interesting to see the approval rate of these loans compared to banks as well as the estimated returns on investment.
Ratesetter	RateSetter has temporarily halved its interest rates for all investors in response to the economic uncertainty caused by the pandemic. Access account-holders will earn 1.5 per cent per annum, rather than the three per cent rate that was previously offered. This will give Access investors an effective annual rate of two per cent across the entirety of 2020. Plus account-holders will have their interest rates slashed from 3.5 per cent per annum to 1.75 per cent per annum, to give an effective annual rate of 2.33 per cent across 2020.	Ratesetter has a contingency fund which covers losses for investors, but there is a limit. It will be interesting to see how it copes in this downturn. In the last three years they have focused on personal loans and car-finance which do not qualify for government support in the terms of issuing CBILS loans which are government-backed. They are doing property development loans which could qualify for CBILS. It's good to see that Ratesetter have changed their rates of return and risk profiling, and there will obviously be a demand for personal loans. However, the risks are high with a suspected increase in unemployment. Yet, Ratesetter has a contingency fund and some of their portfolio is secured against cars, so that in the event of default they can recover some of the loan.