I have been investing for about a year and tepidly recommend this new asset class. Remember that this is not the"Canadian lending club": these are loans to based small- & midsize canadian companies with revenue between $100000 to two million. What I like: - can do guide investing or auto-invest predicated on custom selection, - financial advice past 3 years (assets, debt commitments, earnings, etc. ), - ability to ask questions of borrowers (this is much better than lendingclub or other P2P sites), - possible to perform due diligence on the companies, unlike the anonymous debtors on lending club, - reduced minimal investible per loan ($25, allows for great diversification across 100's of loans), - simple to move money in and outside ($200 min transport in, $50 move out), - occasionally secured by corporate guarantees - seasonal promotions What I do not like: - hazard categories seem out-of-place when compared with fundamental cashflow analysis - retrieval rates on bad debt are extremely low - loan volume is reduced in winter - that they ought to better highlight the need for diversification and how long it generally takes to smartly deploy capital. I mistakenly did an'auto-invest' of a single lump sum as soon as I signed up, which over-allocated to all the loans that can be found on the site (roughly 10-20 on any given day). What I should have done was spend small amounts gradually, over a month's coarse, placing only $25 per loan over 100s of loans. - the historic survival curves should be shown by them. - the auto-invest should comprise more filters (region, industry, debt-to-income) - that they will need to create this compliant with RRSP and TSFA accounts! Currently my portfolio is 1/2 C&D and 1/2 A&B loans, using a nominal return of 13. 5%. This will decrease, naturally, as defaults wrack up (inevitable). Shameless self promotion: earn if you sign up with my referral code. Thanks! 3d28b2 Update: should you take a look on reddit to get lendingloop, you will see an energetic community. Lots of people complain about defaults, when they do happen. But, these complaints capture more attention. Testimonials that are objective demonstrate that the defaults are approximately 1-3%. Takeaway message: Remember to diversify amounts in lots of loans, never concentrate in one loan.
Lending Loop is an online marketplace for Canadians to lend money to growing local businesses.