Our Loan Book Update

Two perspectives: The Crowd2Fund portfolio of 565 listings over 7 years

16th November 2021

We’ve recently been conducting a deeper analysis on the Crowd2Fund loan book and would like to reveal an update on the portfolio’s overall performance. Issuing loans since the start of 2015, our data set demonstrates positive earnings every year for loans and revenue loans. The loan book can be reviewed from many different statistical perspectives and is continually changing. Within this article, we’ve specifically examined our loan book from two perspectives, as demonstrated below.

You choose the businesses you want to fund

Crowd2Fund empowers investors to build their own balanced portfolio and make personal investment decisions suited to them while also building a portfolio suited to their risk appetite. This crucially means that while our investors are able to make investment decisions that can help them earn up to 15% APR tax free as a maximum, they are also, of course, subject to negative returns if they make poor investment choices. 

It’s important that risks are fully understood when making investments through Crowd2Fund, as with any other investment platform – this is where the compliance elements and insight of the platform is crucial. 

Tax-free earnings 

Via the UK government-backed Innovative Finance ISA initiative, earnings on investments of up to £20,000 per year are subject to a legitimate, tax-free wrapper. 

1) Earnings from loans issued in specific years

The average earnings in a specific year is 5.98%. We calculated this by summing up “Tax-free net earnings % for loans issued that year” and dividing those by seven - the number of years we’ve been lending. This is a worst-case scenario as the calculation assumes all defaults are written off and does not consider recoveries. Our historical recovery rate from defaulted loans is 27%.

The table above is shown after fees but before any additional compensation which may have been paid back to investors by the platform over the years.

2) Monthly earnings based on the balance of all loans

On our second perspective, overall net earnings are calculated by taking cumulative interest and dividing it by loan book balance. Since 2015 net earnings are 38.51% until 1st November 2021. This does not include defaults which are in recovery, but this means if you invested £10,000 equally in every loan or revenue loan listed since the platform started you would have earned £3,851 tax-free before defaults and recoveries but after written off and fees.

 

The net earnings are shown before defaults but after written off. All figures are shown after 1% fees and before additional compensation that may have been provided back to investors.

Please also note that all figures do not take into account ‘Compound interest’ and ‘Time-weighted earnings’ which can sometimes make the earnings appear higher.

  

To learn more about our platform statistics and your earnings please click here

 

Past performance and forecasts are not reliable indicators of future results. Tax treatment of any of the investment offers will depend on the individual circumstances of each investor and may be subject to change in the future. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser. Do not invest more than you can afford to lose. Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Investing in start-ups may expose the individual concerned to a significant risk of losing all of the money or other assets invested. Peer-to-business lending through Crowd2Fund is not the same as holding a bank or building society savings account. When making a peer-to-business loan, your capital lent to a borrower is not covered for compensation in the event of a loss by the Financial Services Compensation Scheme. It may prove impossible to recover all or part of the loan by calling in the business assets held as security on that loan. Reward and Donation funding types are not regulated by the Financial Conduct Authority Crowd2Fund Limited is authorised and regulated by the Financial Conduct Authority (FRN 623683). Crowd2Fund Limited is registered in England and Wales. Registered No. 08472687 Registered Address: 242 Acklam Road, London, W10 5JJ.

 

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Risk warning

Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.

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