LENDIX IS AN INNOVATIVE WAY TO INVEST IN SME AND TO OBTAIN MEDIUM/HIGH RETURNS FROM YOUR SAVINGS.
FINALLY, PRIVATE CITIZENS TOO CAN FINANCE BUSINESSES!
LENDIX/OCTOBER ANALYSES AND ACCEPTS AN ENTREPRENEURIAL PROJECT, ESTABLISHES THE RISK AND THE INTEREST RATE, AND THEN IT MAKES IT AVAILABLE TO INVESTORS.
FOR EACH PROJECT, THE MINIMUM INVESTMENT IS 20€, THE MAXIMUM ONE IS 2000€.
IT IS AN INNOVATIVE P2P LENDING FOR BUSINESSES, SO LET’S TRY TO GET AN INFORMED OPINION ABOUT IT
Who do we lend the money to on October?
Rime has a delightful blog where she showcases her creations; her business has her own name.
She designs extraordinary bridal dresses and she wants to enter the old market of bridal wear with an innovative offer. It isn’t easy, but she has an iron will and she swears she know what she’s doing. She already has a considerable experience in the sector and by reading what she writes and by visiting her blog, you’ll really want to invest in such a brilliant idea.
So Rime finds credit, Lendix acts as an intermediary and whoever has means to invest and adopt Rime’s idea comes into play with 7,75% returns. If everything goes well, everyone wins.
How does October work?
Lendix/October is a credit service available for businesses and private citizens, where both parties can benefit.
In short on October we find Business Loans.
For the businesses, the benefit is finding sustainable credit outside the banking system, while for the investing users, the main attraction is high interest up to 9,9%. Similar products can be: Flender, Linked finance, Smartika, LendingClub, FundingCircle.
The best alternative I found so far is Flender, an Irish tool for business loans.
The British alternative is Founding Circle Uk.
What is Lendix P2P default rate?
The average default rate once gone through the amount of Lendix’s projects is shown in the tables below.
They are reasonable numbers, even not too exciting on higher risk loans. The statistics and the data available on the website are updated monthly.
Lendix has French origins, is amongst the biggest companies in its sector – as for now, it is surpassed by Funding Circle.
Here are the statistics from 2018:
And here are the statistics about default rate (the number I value most) in 2019:
One more time here I note that when using P2P investment tools is normally much safer to reduce exposure on the highest risk loans.
The website is extremely well done and pleasing to navigate; many statistical data are available, but to get in the detail of the most interesting numbers I needed to have an intense exchange of emails with Lendix.
I thus searched information about a possible secondary market on which to sell my financed projects; unfortunately, Lendix doesn’t offer this opportunity yet.
This means that if, for example, you commit to finance a project that returns the capital within 24 months, then you will choose to use a capital that you won’t need for at least 2 years.
The variety of the projects is increasing greatly and, unlike other platforms of Venture Capital and of Crowdfunding, these are all understandable and detailed.
We find chemical businesses, restaurants, bakeries, textile products, innovative brushes, inventions and mature startups – you really want to trust in many of these and the presentations are appealing.
The message on the homepage that warns us about the risk is clear:
“Warning! Lending money to businesses involves a risk of capital and it requires locking up your savings. Don’t borrow sums of money beyond your ability to repay.”
The risk to lose capital exists, because it is clear that, despite the very good intentions and the rigorous selection that Lendix does on the posted businesses, the likelihood that some of them won’t repay does exist.
Opinions on October
The projects with shorter length are more appealing and it is reasonable to invest only residual amounts on C ratings.
I also find it amazing to be able to get passionate about an entrepreneurial idea and to strongly finance it, while at the same time knowing to be doing well for your own country by injecting resources right where they are needed, in the real economy.
October/Lendix P2P key numbers for prospect investors
Default rate: 6,05% of loans, 2,38% of volume
Amount lent: €305,611,015.23
Defaulted capital: €7,292,780.51
Rate of return for investors: 4,61% (after defaults)
Number of projects funded: 627
Number of active lenders: 18000
Minimum investment €20
What investors need to start wit October P2P
- Fill up the initial form
- Confirm the data in the email they will sent
- Upload the needed documents like the ID card
How to transfer money on October P2P
Credit card transfers are available
Ordinary bank transfer are possible
Lendix Vs. Envestio
At this time I believe October is older, bigger and more transparent than Envestio. In my Envestio review you can see that the latter has higher yields compared to October /Lendix, but it has also less appeal for my standards now.
Lendix Vs. Flender
Flender is my pick for now, even if it is extremely smaller and geographically limited.
Because of its (actual) 0,2% default rate.
Final consideration and my opinion on October
October is big, rather established and popular in Europe.
I believe it is really helping small and medium enterprises to do business. At the same time it is bringing some value to investors even if interests ara nothing to call home about.
What I really love about October is the honesty in showing detailed numbers. Their statistics page is the best I’ve ever seen. Transparency is crucial in peer to peer investing and they know that.
Secondary market is missing and provision fund has not not been implemented yet.
Auto invest not available.
October offers a 20€ bonus for those who wish to register from this link when investing at least 500€. There is still, then, a considerable barrier for those who wanted to just try it out, precisely because you can’t quickly opt out of the investment.
Whoever wanted to make sure they can sell and opt out of the investment within a reasonable amount of time, can get more information about Bondora (in 24 languages, P2P loans, high returns), or about Mintos and Grupeer (loans, in English).
They are still all tools to invest long-term.
Here is a list of good crowdlending and crowdfunding websites.
Are you happy with October? Tell my your opinion in the comments.
Why can’t I have a total guide to investing money? Here it is.
This blog is for purely informative and educational purposes (disclaimer).
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NOTE: The indications contained in this analysis are to be considered mere information tools and do not intend to constitute in any way financial advice, solicitation to the public savings, suggest or promote any form of investment.