Which P2P Lending Sites Are Profitable?
This page was last updated on 29 October, 2021
For many years, 4thWay has had a small, steady stream of requests from our readers to find out which P2P lending companies are profitable – which of them are making money. That's why we have this guide, which we update kind of regularly.
Lenders' concern is that if these websites are not profitable then they will go bust. Or, rather, the concern is that if they go bust it will take much longer to get your money back or that you might even get less money back.
After all, P2P lending websites not only find the borrowers for us individual lenders, they also collect loan repayments and chase bad debts.
Certainly, in the event one of these companies goes out of business, there's a substantial risk that you'll face delays in getting all your money back.
Luckily, history has shown so far that most people lending through P2P sites don't suffer additional losses as a result of the closure. (Although, as usual, you can suffer losses from bad debts – just like if the P2P site was profitable.)
You can read more about the scale of this risk, and how to greatly reduce it, in The 10 Key Peer-To-Peer Lending Risks Risks.
How much are the P2P lending sites making?
Alas, profitability figures are hard to come by because the P2P lending sites are private businesses. This means they don't provide much public information about their own financial situation, unlike companies that are listed on the stock market.
In addition, many of these P2P lending companies are still small enough that they are allowed to file highly uninformative mini accounts. Worse, these accounts might be one to two year's old, which is a huge amount of time for new businesses.
What we know about their profits
However, here's the latest information we have on profitability.
Bear in mind that this information is largely taken from spokespeople comments or from company reports that have not been externally audited by independent accountants. That increases the chances that there are some inaccuracies and sometimes even whoppers. (And even independently audited accounts are not immune from error and deception.)
ArchOver* lost £1.4 million in the calendar year 2019 off of total revenue of £1.6 million, according to its latest, independently audited accounts. The auditors are CBW Audit Limited.
Revenue and losses were both pretty steady compared to the year earlier, i.e. no improvement.
ArchOver still boosted its balance sheet by issuing new shares, so its substantial and profitable parent, Hampden Holdings, appears to be continuing to support it with real cash – at least up to the end 2019.
Assetz Capital* first reported its profits in its filed accounts in its March 2019 accounts, filed in March 2020. The group of interconnected companies that makes up Assetz Capital made a loss of around £1.4 million in 2019, for which you do need to read the footnotes in the accounts to get the total loss figure.
Both revenue and costs increased substantially in 2019, matching Assetz Capital's extremely ambitious policy of rapid growth. It increased its headcount from 78 to 98 in the year, which was probably the main factor in its loss, contributing to a rise in administrative costs of £4 million.
Revenue was up to £17 million from £14 million in 2019. Assetz Capital is still in its growth phase, so don't expect consistent profits.
Assetz Capital's 2019 accounts were the first to be subject to independent audit. The firm is unknown to us, being Kay Johnson Gee Limited. It's based in Manchester where Assetz is also headquartered.
Assetz Capital's March 2019 accounts show a total profit for the prior year – up to March 2018 – of £150,000. (Again, that's after taking footnotes into account.) We had previously been told of a £1.5 million profit in 2018 and £1 million in 2017.
The earlier filed accounts don't contain enough data to verify the £1 million profit figure and I think there's a good chance that it's extremely flattering. It would not surprise me if losses had actually been made in those years, based on the limited information in the earlier filed accounts. They certainly seem to indicate cumulative losses each year from at least 2016 onwards.
BLEND Network appeared to make a five-figure loss in 2019, but this is a very small, new P2P lending site. I expect its losses to grow for several years as it scales up its business. Its owner appears to have injected enough money into the business to work on the growth it needs.
SoMo is profitable. It filed audited accounts for 2020 show a profit of over £3 million. It's been profitable for many years and profits appear to have risen for several years in a row. SoMo says that it's made a profit ever since 2015, when it was called BridgeCrowd.
It's notable that SoMo's directors owe the company over £3 million in interest-free loans, as well as £1 million lent to another company controlled by a director.
Little information is available in CapitalRise‘s unaudited, published accounts, with the latest dated 31st July, 2019. It looks like it might have made a £1.5 million loss, which is not unusual at this stage in a P2P lending company's life. Its owners appear to put their money where their mouths are and they appear to be successfully growing the business at a rapid rate.
CapitalStackers* has been making very small profits every year up to its financial year end in September 2020, after turning profitable in approximately 2017.
Crowd2Fund* hasn't made a profit yet. It might have lost about £1.5 million in 2019 on an unknown turnover, but its unaudited accounts don't contain enough details. Crowd2Fund's CEO has owed Crowd2Fund over £100,000 for at least three years.
Up to March 2019, the date of CrowdProperty‘s last filed accounts, it appears to be making six-figure annual losses, but there's some guesswork here, because the accounts are unaudited and contain little information.
Downing Crowd is a unit of a larger business, Downing LLP. We can't see the results of the Downing Crowd unit, but the overall business is nicely profitable, making at least seven-figure profits over the past five years off around £25 million revenue. It's been profitable for at least the past 12 years.
Folk2Folk made its first profit in 2019 after seven years. £200,000 profit off the back of £3.2 million in revenue, according to audited accounts filed at Companies House. Profits came after a cut in costs of over half a million, and a small increase in revenue.
Funding Circle was profitable in its UK arm in 2019, making £3 million profit off of more than £100 million in revenue. Funding Circle is still making a loss overall, but it claims its US arm is on the same trajectory towards profit as the UK.
Its accounts filed to 31st December, 2019, show a global loss if £92 million, up from £47 million. Income was £170 million, up from £140 million.
Funding Circle has sufficient scale and, I think, efficiencies in its underwriting, that it will find a way to be profitable overall in the coming years.
HNW Lending* stated in 2019 that it has been profitable every year.
It's a very small business that is exempt from filing detailed information at Companies House. From the limited information available in its unaudited accounts, I would estimate it's making about £1 million profit per year, off of an unknown total revenue.
Invest & Fund
Invest & Fund is loss making.
The Kuflink group of companies had a £129,000 loss in its 2020 financial year, down from a loss of £2.7 million in 2019. (2019 was also an improvement on 2018, where it lost £3.4 million.)
Kuflink appears to be on track for a profit in the calendar year of 2021, which is the first time it has reached this milestone since it launched a P2P lending platform.
That said, it's looking to grow more, and that will require spending more than it earns again. It raised over £4 million from shareholders in the past couple of years in order to give it this growth. It seems on course to reach a stable kind of profitability in a few years' time.
Kuflink's figures are complicated by the fact it's required to report direct lending through its platform, as well as related bad debts, in its own company accounts, due to a technicality in accounting rules.
Kuflink's other bridging-loan business, its older brother so to speak, has mostly been profitable and growing since 2011.
After long delays, all Kuflink's accounts are now filed and up-to-date at Companies House.
Information in LandlordInvest‘s unaudited accounts doesn't reveal its profits, but reading between the lines it's not likely to have reached stable profitability yet.
Loanpad* tells us it reached profitability on a monthly basis in June 2021 and it states that it will remain profitable from now on. Most likely its next published accounts won't be able to confirm this, as they will be abridged accounts for smaller companies.
MarketFinance turned profitable in the 2020 calendar year, according to P2P Finance News, although we have no figures. Its audited group accounts are due to be filed by the end of September 2021.
Other ways to measure P2P lending site stability
At this stage, profits aren't key for many of these fast growing startups, so you need to look at other ways to measure stability and strength. To that end, read Who Owns The P2P Lending Sites?
*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 Assetz Capital, CapitalStackers, Crowd2Fund, HNW Lending, Kuflink and 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.