Linked Finance

Linked Finance Review

I started using Linked Finance in March 2018. Since then, I have invested in practically all projects, always the minimum per project (50 Euro). Thanks to the high number of opportunities, you can invest the minimum (50 Euro) to quickly generate a diversified portfolio. My strategy is to continue investing in each project. I hope to reach soon the point where the benefits are enough to invest in each new project without the need for new deposits. Check my portfolio analysis for the latest updates.

• Platform Type: Crowdlending to Businesses (P2B).
• Start: 2015, Ireland.
• Modalities: Fixed and projects are usually a few tens of thousands of Euro. Projects are loans to companies of all kinds. Linked Finance assigns a risk level to each (A +, A, B, C, D and Y). As expected, the higher the risk, the higher the returns.
• Geographic focus: Ireland.
• Currencies: EUR.
• Return rates: Between 8 and 13% (10.5% on average in my case). Return rates and terms are fixed, agreed in advance.
• Investment flow / Cash Drag: Plenty of activity: 32 opportunities per month on average.
• Minimum investment (per loan): 50 EUR.
• Payment modality: Interest and the proportionate share of principal get each month, which is excellent because you can reinvest in new projects.
• Terms: Projects from 1 to 5 years.
• Defaults: The historical default level is 0.89%. The loan is marked as default when the business misses 3 repayments. You can check my rates of defaults and delays updated for all the platforms in my last portfolio analysis.
• Buyback: None, like other P2B crowdlending platforms.
• AutoInvest: There is AutoInvest. You can choose the level of risk (ranging from A + to Y, directly related to interest) and the term (6, 12, 24 and 36 months). If you do not use the AutoInvest, you will likely miss most opportunities because they fill up right away, some in 1 second (literally). Even if you have the Autoinvest, due to the high number of registered investors together with the relatively small loans, not every investor can invest in each loan. There is a feature called the order rotation, which is an update in the bidding process introduced in June 2018. Because of this, lenders are able to enter approximately every 4th loan within the desired rule. The success rate also depends on the size of the loan launched. When the new loan is launched, AutoInvest is queuing the lenders with the adequate grade and term enabled. Lenders are queued according to the time when they first set-up the AutoInvest rule for that particular grade and term. Let’s imagine that you were bidding for the 12-months B grade loan with 600 other lenders. The loan closed with 359 bidders in, and you were left out, as a 360th lender in the order, together with 240 other lenders that ended on the bottom of the queue. Next time when the 12-months B grade loan is offered, the list of the bidders would start with you on the top and the rest of the list from the bottom would enter that loan.
• Secondary market: Doesn’t exist.
• Interface / Tools: Quite complete. Charts with the money invested, in the investment process, and funds available for investment, movements, lists of projects in which you have invested with their characteristics and deposits (which can be downloaded in CSV format), a bar graph with the distribution of loans by interest rate, the average interest rate on all your investments. To deposit funds in the platform, unlike other platforms, you can also use a credit/debit card.
• Taxes: It doesn’t withhold taxes.
• Customer Support: Whenever I have contacted them, they have always responded in less than 24 hours.
• Languages: English.
• Welcome promotion: None at the moment.