Automation gets better at Funding Knight

Funding Knight is the latest peer-to-peer lending company to announce improvements to make it easier for you to spread your risk and diversify across loans.

You will notice that when you search for a loan through Funding Knight's Loan Exchange you will get two options to choose from “Quick Buy” and “Advanced”. “Advanced” allows you to buy loans as you did before, on a one-by-one basis. The new search “Quick Buy” allows you to set a criteria of size of loan, term of loan and by shield (borrower) rating. Once you have made your selection you can complete your purchases with a single click.

You can diversify on Funding Knight by buying small parts of loans on Funding Knight's “Loan Exchange”, which is the P2P lending company's secondary market. If you have lots of money in larger loans, you could sell some of that and then spread your money into more loans through the Loan Exchange.

A secondary market is like the stock market – it's a place where you can buy and sell existing loans (rather than shares).

In the past, on Funding Knight's Loan Exchange, each purchase or sale needed to be completed separately and this was time consuming. With Quick Buy, you can make multiple purchases and simply “check out” at the end of the selection process.

A Funding Knight spokesperson said: “Currently there are 81 loans on the Loan Exchange, we are confident that this provides you with the diversification opportunities needed to build a varied portfolio.”

It's vital to spread your risks by lending to lots of borrowers. As Funding Knight says: “If your portfolio consists of small loans to many businesses, the effect of one business failing to repay their loan is much smaller than it would be if you tied up all of your funds in that one loan.”

Many P2P lending companies offer automation and the facilities are getting better on an almost weekly basis.

Sources: Funding Knight

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