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Loanpad Now Profitable After Tripling Loan Book

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By on 31 October, 2021 | Read more by this author

Loanpad*, the bridging and development P2P lending company with the strictest lending standards in the industry, has tripled the total amount lent through its platform in 12 months to reach profitability in June 2021.

It has reached this stage very quickly, as it only approved its first loan in 2018.

Are profits stable?

Loanpad tells us that it has remained profitable on a monthly basis since June. It expects this to continue indefinitely. Its profits mostly come from earning regular fees for managing ongoing loans.

It might be some time before Loanpad's published accounts can confirm its profits, or the size of them. The next accounts covering this period are likely to be abridged accounts that don't contain details on revenue, profit and loss.

However, Loanpad has proved itself to be among the most transparent P2P lending companies up to this point and its information has always been accurate. I see no reason to doubt what it has told us.

Is growth too fast?

When growth rockets at a P2P lending company, you need to dig to find out how and why and how it happened, to ensure that the cause isn't loosening lending standards.

What we really like to see is that a company and its directors aren't driven by the concept of by rapid growth. The past seven years of assessing P2P lending companies has repeatedly shown in the results that this qualitative test is a useful one.

Loanpad has consistently shown that it is not putting its own growth above lending quality.

Loanpad has been telling 4thWay for years that it has other possible lending partners lined up and able to supply more loans. The bottleneck in growth was building up a lender base that has money to lend. So the capacity for approving more loans has been latent for some time.

In spring this year, as a couple of P2P lending companies closed, many lenders moved their cash to Loanpad. This led to a large increase in lender money in a short time. With lending partners already lined up, it was not difficult for Loanpad to increase approvals.

Loanpad has otherwise grown very naturally while attracting more lenders, as it has established itself as an extremely low-risk investment.

Loanpad lenders have lent around £45 million over the past 12 months. Relative to the size of the overall market for these kinds of loans, this is still a small amount. So it's got a huge amount of room to grow before it could become too difficult to maintain its standards.

More lending partners have been activated

Loanpad* has added a further five lending partners, bringing the total to seven. These partners are established businesses that approve borrowers in the first instance. They also lend a lot of their own money to the same borrowers and they take the riskiest portion of the loans, whereby they lose their money first.

All lending partners have their own niche borrowers in terms of where they come from and they all grow through word-of-mouth. But they all offer the same kinds of loans.

Loanpad is only referred the borrowers that meet its extremely tight standards, so that Loanpad lenders continue to lend up to the first 50% of the valuation on ordinary types of properties that are easily valued, bought and sold.

These are ridiculously high standards, which is one of the main reasons why lending rates are not as high at other P2P lending companies, at 4%. (The other reason is lenders having their money automatically spread across the entire loan book, adjusted each week.)

Learn more:

On of 4thWay's specialists has updated the Loanpad Review with this and a little more information. The new byline shows a lot of confidence in Loanpad: “An investment that will keep your money safe through everything short of nuclear war”!

Visit Loanpad*.

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

We are not financial advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.

The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

*Commission and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from Loanpad and other P2P lending companies not mentioned above when you click through from our website and open accounts with them. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
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