What a difference a day makes. The successful close of the Olsen Doors & Windows £250,000 loan yesterday fell from 11.4 per cent when the bid target was reached, dropping overnight to 11 per cent. The cost of the B-rated credit stream fell steadily during the day leading up to last night's close. The Money&Co. borrower eventually got credit at an average rate of 10.4 per cent - a full one per cent annual reduction on the quarter of a million.
"We had strong interest in the loan throughout the day," said Rachel Green, director of business development at Money&Co. "The new bidders saw the average price of the credit and offered to lend at a little under, thus knocking out the offers of more expensive loans. A closing price of 10.4 per cent means that the borrower gets a line of credit at a good price, and lenders on the Money&Co. platform still get an excellent rate of return on their capital. This process is proof positive that the peer-to-peer business lending works really well for borrower and lender alike."
Rachel has just finished a lively hour at a free webinar round-the-clock investment event (ending at 10 pm tonight. It's free to log in, just click here). She spoke about the benefits (and of course the risks) of lending via peer-to-peer crowdfunding. We have two more loans currently live on site. Both are A-rated. One has a gross indicative yield of 9.7 per cent, and the other 10.5 per cent. Of course, when they close, the credit should get cheaper, so the lenders who have offered to lend above those rates may find themselves knocked out of the bidding.
Remember that lending carries risk. Please read the risk warnings on our home page and in our Frequently Asked Questions.