Which P2P Lending Sites Are Profitable?
This page was last updated on 19 October, 2018
We are regularly asked by 4thWay's users about whether an individual P2P lending site is profitable – whether it is making money.
Their 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 not get it back at all.
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 sites goes out of business, there is a pretty big risk that there will be delays to you receiving your money. But history so far shows, and I most firmly believe, that most people lending through P2P sites will not suffer any losses caused by P2P sites going bust. (You can read more about the scale of this risk, and how to greatly reduce the risk, in The Five Key Risks In Peer-To-Peer Lending.)
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, most of these P2P lending sites 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 company reports that have not been externally audited by independent accountants. That increases the chances that there are some inaccuracies:
- Assetz Capital* made over £1 million profit on lending of £126 million in its financial year ending on March 2017.
- BridgeCrowd* appears to be profitable.
- CapitalStackers* is profitable.
- Crowd2Fund* managed to make a profit in the first quarter of 2017, but full 2017 results show a loss.
- Funding Circle has claimed it could be profitable if/when it stopped trying to grow further, although it lost over £35 million in 2017. Its sales rocketed in 2017 to £94.5 million, up nearly 400% in two years, and its losses narrowed two years in a row. We have no more recent information.
- FundingSecure was profitable in 2016 and 2017.
- HNW Lending* stated in 2019 that it has been profitable every year, but it is a very small business that is exempt from filing detailed accounts at Companies House. Its profits must have been marginal.
- Kuflink's published accounts show it was profitable in 2017 and 2015.
- Landbay* expects to report profitability in 2018 when its accounts are published late in 2019.
- Mintos made a profit for the first time in 2017, making just under €200,000 on €2.1 million in revenue. It is forecasting that its revenue will more than double in 2018, although there is no word on whether it expects to make another profit.
- MoneyThing was profitable in 2015 and 2016. We have no more recent information, but it states that it runs itself “profitably”.
- Octopus Choice was profitable in the 12 months up to April 2018, but its direct parents losses were larger at £1 million – and in this case its direct parent is relevant. The overall group company is profitable and this is also relevant if Octopus Choice needs to be wound down smoothly.
- RateSetter* was profitable for two years before deciding to invest for growth again. Its CEO had said it will return to profit in 2018, but this has been delayed. As of autumn 2018, it is not forecasting becoming profitable. (Although it said that if you exclude the cost of bringing in new lenders it should be profitable in the first half of 2019 – unless it decides to spend more to grow faster.)
- Zopa‘s* peer-to-peer lending business was profitable in 2017 as forecast by its CEO. It earned £1.5 million on £46 million in revenue, which rose by 40%. If it continues at this rate, accumulated losses for previous years will be wiped in a few years. However, this is just from Zopa's P2P lending businesss. Zopa has other businesses, including setting up a new Zopa Bank. We expect that Zopa's overall business is still not profitable.
We're going to update the above list regularly, adding more information, such as profit figures, as and when we can get them. We'll send this out again to our newsletter subscribers whenever there have been substantial changes. (You can sign up below.)
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. We already show dozens of P2P lending companies in our accurate comparison tables and we keep adding more as soon as they provide us with enough details. We receive compensation from Assetz Capital, BridgeCrowd, CapitalStackers, Crowd2Fund, HNW Lending, Landbay, RateSetter and Zopa, 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.