Thursday, 13 April 2017 - I have just invested in a new P2P lending site

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Primstox logo copied for a review of
Just invested a few tenners in , a P2P lending outfit that has trappings of sanity like a nice web site. It has very high annual percentage payback rates on very small short-term investments if all goes well, and next to no references from other web pages. Given the first two points, I decided to invest about £100 yesterday, and given the lack of references, I write this.

The Primstox contract + , a brochure, or ask customerservice@...

Investers have a right to a parcel of food on default

The firm finances food for investers, and, being a P2P platform, investers own the food. Other P2P systems are a bit theoretical about this, but not Primestox, where it is a point of pride and and spelt-out in some detail, with inevitable gaps. The food is financed over about three months during manufacture, sale to a shop, and payment back to the manufacturer. Each investor owns the right to an individual parcel of food, with free delivery, if the process goes wrong. A pound of flesh for example. The food is valued at a top retail price somewhere like Waitrose.

"the situation could arise that he [sic] could not pay. In that case you continue to hold title to the the product until it is sold. You also have the option of requesting that the product be sent to you or a location you specify - at no additional cost. " - FAQ

At this point, Primstox ask the borrower to assemble parcels of food ready to send to each invester. This is easy for the sweet potato crisp manufacturer on the borrowers' list because they already have a stock of crisps at ClearanceXL and would probably send their chips to the same place.

An online vote, run by, allows other investers to out-vote you on the best or cheapest thing to do. Arbitration would be at "an english court", which sounds expensive. So you might not even get a parcel of food out of this but I assume that you do, just possibly with an option of very cheap sale, if you are lucky and another lender organises it. allow you to open an account and try to sell surplus food on a free small ad via an 18% escrow service, if nobody else in the group of investers can make an offer. Takestock's details are further down the page. If 18% for an escrow service sounds high, you can see what other links I have found at the bottom of the page as well, but none says "we pay top retail price at somewhere like Waitrose for your nearly overdate food". They all look a bit clearance-ey. One is for clearing restaurant food but won't download onto my mobile.

The contract doesn't say that Primestox will use their commission money to pay delivery, nor that Primestox themselves invest in each investment, so in theory they could get like Bondora or Funding Circle and flog hopeless loans, just to please some outside investor who wants rapid growth. At this stage, I imagine that they do invest in each loan if nobody else does, just to keep-up the appearance of a growing P2P market.

So after a default, food is plonked on your doorstep, you sign for it, and then I suppose you eat it because the pricing is so up-market that it would be depressing to try to re-sell at a huge loss and qutie likely fail to sell at all. If your job is anything to do with restaurants or retail food, it might be a different - you could to a dish or the day or prop-up the food on special offer by the counter.. Even if you run an expensive stall in a wholefood market, there can't be a great turnover in some of the products offered so far. So, the bigger the investment, the smaller the recovery of your loss if it goes wrong. I was going to say that your newsagent might borrow some and give a credit note for a proportion of any sales, but the valuation of the stock you buy is so much higher than anything in a wholesale catalogue that I doubt much would sell. Assuming that wholesale food prices are about the same as supermarket prices - a bit higher than the basics range.

My first two or three investments...

  • £30 for 16 x ¼ litre fruit juice, cold-pressed @ £15 a litre.
  • £20 for 20 x 60g fruit energy bars @ £16.66 a kilo. For comparison, ClearanceXL tries to sell 60g fruit energy bars at a quarter the price - four for a pound plus delivery. If they were buying they'd want to pay - what? - 10p a bar sale or return for some minimum amount?
  • £20 for 200g of vanilla paste @ £100 a kilo
  • £25 for 10 x 200g pots of fermented pickle @ £12.50 a kilo. This is usually home-made or sold in wholefood markets apparently.
  • £20 for 10 x 500g packs of frozen chips, sweet potato, battered @ £4 a kilo. MySupermarket shows a few shops selling sweet potato crisps, with the smaller packs or upmarket brands around £4 a kilo while typical prices are £2.60 or less on special offer or under £2 at Aldi. Waitrose sells these battered ones at £5.60 a kilo. The same brand has some crisps at ClearanceXL (see below) but I get this wrong at first glance - they are crisps and not these chips.

Incentives for lenders

  • Cashback

    If you buy the food in a shop, there is probably a cashback deal, should you be organised enough to keep the receipt and send it in. The products look so expensive that I wouldn't want them with or without cashback, but if you're curious, it's a deal.
  • Food is delivered to you if the borrower can't pay

    I don't know the likelihood of some food being delivered from several branches of a shop to a few dozen investers, by cheapest courier, at a time when shop, investers, and food company are on strained terms, but that's still a pretty good security I think. The value is in the flutter. I rather like the idea that a parcel of stuff might turn-up, if it's a small investment. Some people have space for a second-hand freezer, so they can punt a bit more and live like kings on luxury surplus food.

    On the other hand you can have too much of a good thing, and you can have too many defaults to break-even; the betting odds for the flutter aren't clear. Taking sweet potato battered chips as an example, the same brand has sent crisps to a clearance warehouse. There are no discounts at Waitrose, their UK stockist, and so no sign that food will be sent back to investers. If they did get a load sent-back, there is a problem. Shops like ClearanceXL and Approved Food do not do sell frozen stuff, so a frozen food loan is more of a risk than packets of something.
  • High interest

    There is a high interest rate, sometimes nearly 50% a year, which is one or two pounds on the sizes of investment I've described and a three month loan, but there is a tickbox you can tick to invest a lot more. In comparison Investly invoice finance pays around 10-15% to lenders on an autolend system: the loans are only a month, but your cash is re-lent automatically to the next one.

Incentives for borrowers

This is the tricky bit. The brochure gives an example like 9% over three months, not 9% per year, on £3,000. Assuming the commission and hassle bring the cost up to 10% that's £300, and some deals are larger amounts at higher rates of interest. Why do it?

Less call on P2P invoice finance

  • Investly is a P2P site where lenders lend the value of an invoice not yet paid. Borrowers and interest rates come-and-go: the UK part of their market is small, like Primestox. A London peanut butter manufacturer selling a special mix to a chain store got a months' credit at 10%; other borrowers get loans in the low teens or even 20%.

    The peanut butter loan was not secured on peanut butter. If either side somehow messes-up - either the shop or the supplier - then the loan is backed by the supplier's personal guarantee. Called-in for payment, this could be a distraction that causes stress and legal costs all round rather than paying-back the lenders.

    If the invioce has not yet been agreed, there is no loan; it is only for a month between sending an invoice to the shop and getting paid. Assuming the shop doesn't want to pay before production, that leaves a lot of ingredients and work to finance, even before sending the food and the invoice. So invoice finance just competes with the last month or so of the three-month cycle that Primestox typically finances.

    Primstox' one press mention, in Informita New, December 2016, says that there aren't many stock or inventory finance companies - "there are some out there who have had limited success, but none have hit the market in a bit way", so the niche-within-a-niche of the "perishable" could do with a specialist P2P firm.
  • Promoting the food, retail, wholesale, the brand in the background

    As borrower, P2P borrowing makes your business public; an overdraft is a secret between you and the bank. It's a kind of civic duty to find alternatives to banks at the moment, but for a businesses interested in food, I suppose it is the public side of the deal that attracts. There are also some random overdraft rates and refusals given by banks to businesses; this kind of thing doesn't count as a secured loan. Banks are oviously short of money. They have asked government for bail-outs. They are likely to pull-out of parts of the market or make rediculously expensive lendinng offers. Maybe the borrower had a row with the bank manager and threw something.

    The P2P platform tries to sell lending offer as a way of promoting the brand as well as borrowing money, for example with the cashback offer that encourages lenders to go and buy the food.

    "From the manufacturers perspective this will finance inventory and drive sales to consumers. A positive double whammy! ", says a review in Informatia.

    Lenders are called "friends", and if they don't use the cashback offer to buy the food, they still have some incentive to remember it. They might mention the food to people or at least give it away to neighbours if any of it is plonked on their doorstep. Some of them may be bloggers or tweeters or chatterboxes or dinner hosts or potential stockists. They might offer the cashback deal to to someone else. They also have an incentive to fund small amounts, simply because of the risk of plonking, so there are a more plonkees per batch of food than lenders per loan on other P2P sites - it's more like crowdfunding. Thirty six is a common number according to the web site, but in future there could be more per deal.
  • Promoting the food for clearance wholesale

    This is un-tested, but from a food producers' point of view it might be good to be known to a lot of foodies, just in case one of them can offer a good price for specialised food near its sell-by date. Maybe one is a shopkeeper who will try selling the stuff and order some more when it runs-out.
  • Formal way for informal contacts to lend

    If a food producer has relatives, regular customers, or any kinds of contacts who want to take a flutter, this provides a formal way that they can do it without having to think about legalities. The producer just puts-up a poster for Primestox. The customer sees the url, logs-on, and takes a punt
  • Novelty

    I guess this is the weak point in the idea, but no reason not to enjoy it while it lasts. Other platforms like Rebuildingsociety and Thincats had rediculously high rates of interest on offer when they started, which gradually dropped in an auction system. The system is to fix an interest rate and use an auction-like system to fill the loan, but they'll most likely experiment with lower interest rates if they can.

Background to the company

There are practically no references to the site on other sources. It looks more polished and sane than some sites that do things like bitcoin lending, or my own shoe shop that you should try, but less referenced from anywhere else. The borrowers are food businesses with web sites linked. is the company.
The check-business site would drop a couple of tiny hints from an Equifax report if there was anything to say, but there isn't - the business is too new. The Companies House entry doesn't state much more - just a links to West London from previous employers that's confirmed from the director's facebook page and choice of software engineer, so it looks UK-based.

There are three shareholders and one of them seems busy employed in South Africa; only one is an "officer" on the Companies House form.

The postal contact is the first floor above Starbucks in London's Oxford Street, which looks an expensive place to work or even hire a forwarding address. The floor was just recently let, after asking for offers over £75.69 a square foot for £55 rent and £17.91 rates. It's the registered office for 23 limited companies and an accountant - BG Partnership.

Linked-in profiles mention some people related.

There is no mention on P2Pmoney yet; I added a post on P2P independent forum.

If the whole lot turned-out to be a fantasy that someone had made-up, my excuse for lending would be to say that it was still convincing enough to be worth a flutter.

The software looks a like crowdfunding software, which can be had for free. I don't know if it is but if there is one free open source piece of software, there will probably be others, cheap or free, and this company has used something similar-looking for the new purpose of P2P lending, which is otherwise expensive to get going, I think, for lack of free software. I don't know if this is unusual - it's good to see that it can be done.

The company paid Alex Panichi, user interface web designer who answered an upmarket job ad and "worked to improved various steps in the user journeys. The user interface has been enhanched and refined. There has been lots of sketching, wireframing and hundreds of iterations to declutter the interface. In fact, the main challenge was to show the most relevent information to the user at each stage"

So, £200 an hour for several evenings and weekends doing iterations on a general theme is a few thousand pounds, but not bad.

blog background

Written as a hobby and to promote for vegan shoes online - an online vegan shoe shop selling boots belts and jackets mainly made in the UK

Selling food on classifieds sites - ebay and the rest tend not to sell food

Neither site has replied to my attempts to sign-up last week. but it turns-out that I have a log-on for that allows selling! The site doesn't have a huge amount on it, with a lot of the guide prices well over supermarket basics prices per kilo. classifieds - no login provided

  • Buy from their advertisers - it's a paypal system
  • Delivery - ads say things like "ships to Blackburn"
  • Sell to them - I've signed up, waiting for confirmation by email. No mention of commission yet. Still waiting for confirmation a few days later. classifieds want £86 sign-up fee

  • Buy from them -
  • Delivery -
  • Sell to them - same classifieds - allowed login

  • Buy from their advertisers - sign-up. It's a classifieds site for food. Guide prices & minimum orders are on each ad once you have signed-up
  • Delivery - postcode on each advert but no map or search-by-distance. Most offer to help with delivery. Some have a place name like "London" which helps searching; a lot are in north england or Norfolk for vegetables.
  • Sell to them - sign-up - they take the money via their bank account and take ? 18% +VAT if there is no dispute. 8% on fresh food.. Selling page recommends a low minimum order and to offer help with delivery.

Selling to shops and wholesalers


  • Buy from them -
  • Delivery - £17.50 minimum order and £6 delivery
  • Sell to them -

Clearance Wholesale

  • Buy from them - no web shop - Grimsby cash & carry
  • Delivery - apply for pallet deals
  • Sell to them -

ClearanceXL including

  • Buy from them -
  • Delivery - - £5.25 most areas. Free collection by appointment in Sheffield S9
  • Sell to them?


  • Buy from them -
  • Delivery - - £3-£5 or free over £40
  • Sell to them?


    • Buy from them - no web shop
    • Delivery - walk-in at Rotherham or Barnsley
    • Sell to them -

      Self Trading

      Not quite sure what this one is - it once bought a supermarket's stock. Found by googling "short dated food"

      SOS Wholesale

      • Buy from them - apply for an account or use the Derby cash and carry.
      • Delivery - apply
      • Sell to them -

      unlikely below this line, but worth a note from the same search

      Bargain Outlet
      • Buy - discount shop in newkey and weston. Prices from 25p
      • Delivery - walk in, retail
      • Sell - "supermarkets get in touch"

      • Buy
      • Delivery
      • Sell - looking for regular producers; food is sorted by manufacturer

      • Buy- app links you to any local restaurants with closing-time bargains
      • Delivery - you need to link to a restaurant near you via the app
      • Sell - restaurants welcome. If you know a restaurant on the system, they might use the app to try to sell for you on commission.


      • Buy - aka Nifties
      • Delivery - Delivery - - £6 or £2 in Dover. Possibly a walk-in grocer in Dover too.
      • Sell? - probably not for specialised upmarket products by the look of them

      The Peoples Supermarket

      •  - no web ordering - £25 annual membership to work 4 hours a month and get 20% off
      • Lambs Conduit Street, North Central London


      • buy -
      • delivery -
      • sell - looking for regular batch producers not surplus stock - 18% charge

        Not trading
        C...a ran just for the end of 2016 and start of 2017