Reply to arebelspy:
Yeah, those are fair questions. There's nothing overly special about this except that the corporate issuer is dis-intermediating traditional financial institutions, as does other p2p lending (somewhat Mustachian). It's also backed by underlying assets (like trailers, trucks), which is a bit novel, for the direct p2p lending model. I wouldn't be surprised if more corporations do this kind of direct issuance. I also suspect there will be more asset-backed p2p lending in the future as well. I think I heard the Lending Club CEO talking about getting into mortgages at some point.
A U-Note is just an asset backed bond with Amerco. I'm not done researching this, so I may not invest. But what I saw of their financial statements and annual report looked ok. I think the Club has been around for a couple years. I'm not that concerned about the Club/novelty aspect. I'm more concerned with the soundness of Amerco.
I was looking for some longer duration (around 5-8 years or so), higher yielding bonds. I don't own much of those. Mostly I have shoter term US treasuries (which are backed by only a printing press) and shorter bank CDs, and some stocks/etfs.
Upside potential is limited by the yield on the specific U-Notes you buy. 10 year note yields about 6.5%. And you get some of the principal back each year, rather than all at the end. So you get higher yields without having to lock all of the capital up for the entire duration. The underlying assets serve as collateral so those mitigate the risk below that of a comparable unsecured bond. There's always some risk, though, of course.
I like family owned/insider owned companies, and Amerco is one of those. It's been around since 1946, I think mostly run by the same family.