In my opinion, Saving Stream, incidentally my favourite PtP platform in the UK, is now more than a stream and is rapidly becoming a river in full flood of substantial, i.e. multi-million pound, UK property loans.
Saving stream loans are all asset-based, return 12% per annum (plus no fees) and are secured against property associated with the loan. These bridging loans normally last for about 12 months. Secured loans mean that, in the event of a default, there is a reasonable probability of getting the capital back once the associated property has been sold off.
Saving Stream also have a simple secondary market allowing loans to be sold at any time to other members on the platform. This is great for those wishing to exit a loan early and also for those who wish to diversify, reducing their exposure from a single, larger loan to a number of smaller ones.
Note that the secondary market only operates at par. This means there is no opportunity to sell at a premium or discount. I like this approach and the simplicity of the SS secondary market.
The other fantastic thing about the Saving Stream platform is Pre-Funding. Every other UK PtP platform informs you when a loan is expected to come on-line and then requires you to add sufficient funds to your account before you bid. Often bidders fail to get anything because the ‘big players’ grab the lot in the first few seconds. The unsuccessful bidder then has to decide whether to leave their cash on the platform (earning no interest) until the next loan or whether to withdraw the cash again.
Pre-funding allows the bidder to define how much of each pipeline loan (ie those not yet ‘live’) that they wish to purchase. At this point the lender doesn't pay anything. Once the loan is ready to go live, saving stream email you to let you know what proportion of your bid has actually been allocated to you. So, for example, if I bid for £1000 of a £1M loan and the total pre-funding bids are £2M then I only get half what I bid, i.e. £500.
At this point you can sell part of the new loan, if you have been allocated too much, and/or buy or sell parts of other loans on the secondary market. Once this activity is complete the platform indicates exactly what you owe and SS ask you to settle up, ideally within 24 hours.
Generally, when a large, multimillion £ pound loan comes on stream, the secondary market opens up temporarily as lenders release older loans in order to fund the newer ones. This is the time to diversify. Normally the demand for a share in new or old loans outstrips supply so, on the Saving Stream platform, selling a loan is almost instantaneous where as it takes patience to successfully buy an existing loan.
What next for Saving Stream? Well, I for one, hope they can continue to delight their rapidly expanding Peer to Peer Lending audience in 2016. This means they continue their excellent record of negotiating and managing new and existing loans so any future defaults result in no permanent losses for their lenders.