Investor
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Post by Investor on Jul 21, 2014 20:16:29 GMT
For anyone who missed it, there is a new kid on the block called ablrate.com. Predominantly seem to be setup for flighty loans rather than boaty loans, so geared up for aviation leases. They have their own section in the Other P2P area of the forum. Only reason for posting here is the quote today 'I note from their website that they are expecting to offer some marine and further aircraft loans shortly'. Had a look a few days ago and they are very much in startup phase, first loan is 100k at 10%, looks like a fixed rate however they will also be doing auction based bidding for future loans. As for risk, although I think a boat secured in a marina is a pretty secure asset, I would also think that a 747 (with factory fitted Thatcham alarm) is also a fairly secure asset, and would anticipate the premium for TPFT insurance would be quite low on the Theft part.
They are currently being put through the mill by forum members in the usual duedil early day methodology, login is wrong, security is wrong, website is wrong, investor ID process is wrong etc. Same grief we seem to give all the new boys, (should be called the James Marshall Syndrome!)
Another interesting piece is that their SM, rather than being the fixed rate or markup/markdown that we are used to, it will also have an option to be auctioned based. Would be interesting to know that given the slow summer SS pipeline, the growth of investors, and the desire for diversification, what we could get by auctioning boaty bits off on the SM. Given the scrum/stampede/opening day of the January sales (delete as applicable) that occurred today, it would seem that anyone getting a boaty bit loan may find its opening marketable value increases beyond it purchase price. Along the lines that a second hand high performance car can cost more than a brand new one when the delivery time for a new one exceeds a few months.
Still a fan of SS and they still have the greatest share of my current investments spread across 6 platforms.
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kermie
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Post by kermie on Jul 21, 2014 20:40:12 GMT
If ablrate want to bring in funds (lenders), I would encourage them to stick with fixed rate rather than auctions.
In the short term, there will be little difference to the resultant rate because there will be so few lenders.
In the longer term, auctions tend to result in a competition to see who is the most stupid (sorry, that's harsh - but that's the way I see it). The risk premium gets squeezed out by (in my view) inexperienced lenders who do not necessarily understand the risk they are taking. There is not far south to go from 10% before I find I might as well go to RateSetter or Wellesley, particularly once I factor in tax, fees and losses.
You may find that once ablrate have more lenders than loans, then it might make sense for their business to then dabble in auctions. That will hurt lender returns, but might make them more competitive for borrowers.
SS still have the upper hand here for marine loans and similar, I think...although even SS will need to bend eventually I suspect since 12% now seems very good compared to rates elsewhere that seem to be on a downward trend. As it happens, I suspect competition in p2p for borrowers is one reason why SS is quiet right now.
Excuse my random ramblings!
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Investor
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Post by Investor on Jul 21, 2014 21:00:01 GMT
If we didn't put our random ramblings on here there would be no posts!
I still like the simplicity of SS. Am slowly reducing my position on some of the other p2p sites that require significantly more effort, research and due diligence in selecting the better loans. Seemed to enjoy the game for quite a while but then realised that the additional effort did not necessarily repay as additional reward.
Would like to see Lendy try to further promote the lendyclassic.com website more aggressively, and possibly change it so it is not so 'classic car' centric but more towards asset based loans on all higher priced cars whether classic or not. Think it is a very lucrative market, would still be likely to be seasonal, but must have more potential customers than boaty loans. All we have seen so far was an Aston Martin (I was secretly hoping they might default at 50% LTV) as I was in the market for a Vanquish at the time. My understanding is that lendyclassic.com has not generated any business yet, and surely the added benefit of having not only a loan for your vehicle, but that is in secure undercover storage for the loan period, would be an excellent sales point.
Just think there is an untapped market there, with easy to value assets, relatively cheap storage, and that the first make the marketing investment to get a foothold in that market space could see a nice return. Would certainly look into it myself if I needed short term capital, mine sits in the garage from October through March unless we get one of those freak warm winter days.
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mikes1531
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Post by mikes1531 on Jul 21, 2014 22:03:28 GMT
In the longer term, auctions tend to result in a competition to see who is the most stupid (sorry, that's harsh - but that's the way I see it). The risk premium gets squeezed out by (in my view) inexperienced lenders who do not necessarily understand the risk they are taking. This is the way I see it too, and I applaud AC, SS, and FS for avoiding that. (They're the three platforms I'm watching reasonably closely now.) I was lending at Zopa for a number of years, and watched the situation get out of hand -- JMHO, of course. Lenders were offering money at what seemed to be ridiculously low rates -- in the higher risk markets lenders would lose money if actual bad debt came in at the level Zopa were estimating. Perhaps those lenders were very optimistic about the level of bad debt they'd suffer, or perhaps they just weren't understanding the situation. It reminds me of the situation often seen on eBay, where a given seller offers an item both at a fixed price and via auction, and overenthusiastic bidding puts the auction price above the fixed price available at the same time. Where bidding is allowed, I'd expect lenders to get carried away, willing to accept nearly any interest rate as long as it's higher that what they can get from their high street bank. That might be great for borrowers, but things would get ugly when the defaults start coming in. Complaints about lenders being misled would pop up everywhere, and the whole P2P concept would be damaged, possibly fatally. It's nice to think that lenders might learn from their mistakes and not let the bidding go so low after being burnt. Some might, of course, but with P2P growing strongly, I fear there always will be a supply of inexperienced lenders making the same mistakes as they get started. I suspect that's part of the reason Zopa gave up on their Listings concept after a while, and then stopped giving lenders the ability to choose the rate they'd lend at.
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merlin
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Post by merlin on Jul 24, 2014 8:59:17 GMT
In the longer term, auctions tend to result in a competition to see who is the most stupid (sorry, that's harsh - but that's the way I see it). The risk premium gets squeezed out by (in my view) inexperienced lenders who do not necessarily understand the risk they are taking. This is the way I see it too, and I applaud AC, SS, and FS for avoiding that. (They're the three platforms I'm watching reasonably closely now.) I was lending at Zopa for a number of years, and watched the situation get out of hand -- JMHO, of course. Lenders were offering money at what seemed to be ridiculously low rates -- in the higher risk markets lenders would lose money if actual bad debt came in at the level Zopa were estimating. Perhaps those lenders were very optimistic about the level of bad debt they'd suffer, or perhaps they just weren't understanding the situation. It reminds me of the situation often seen on eBay, where a given seller offers an item both at a fixed price and via auction, and overenthusiastic bidding puts the auction price above the fixed price available at the same time. Where bidding is allowed, I'd expect lenders to get carried away, willing to accept nearly any interest rate as long as it's higher that what they can get from their high street bank. That might be great for borrowers, but things would get ugly when the defaults start coming in. Complaints about lenders being misled would pop up everywhere, and the whole P2P concept would be damaged, possibly fatally. It's nice to think that lenders might learn from their mistakes and not let the bidding go so low after being burnt. Some might, of course, but with P2P growing strongly, I fear there always will be a supply of inexperienced lenders making the same mistakes as they get started. I suspect that's part of the reason Zopa gave up on their Listings concept after a while, and then stopped giving lenders the ability to choose the rate they'd lend at. I am afraid you are absolutely right about some newbies getting drawn in to P2P and chasing rates down. I think there is also another factor and that is that whilst the high street is still offering rates below 2%, 5% with a P2P is likely to look very good indeed to some people and 12% beyond their wildest dreams.
On a slightly different note I am beginning to get seriously bored with SS due to the lethargy that seems to have overcome them. I have a pile of dead money in SS which I pulled out of another P2P just waiting for some good offers to come along. If it does not happen soon perhaps I will have to pull it out and go elsewhere, seriously boring!!
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mikes1531
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Post by mikes1531 on Jul 24, 2014 10:29:06 GMT
On a slightly different note I am beginning to get seriously bored with SS due to the lethargy that seems to have overcome them. I have a pile of dead money in SS which I pulled out of another P2P just waiting for some good offers to come along. If it does not happen soon perhaps I will have to pull it out and go elsewhere, seriously boring!! With the glorious weather we've had recently, if I had a boat I'd be out using it. This isn't the time of year to take out a short-term loan using the boat for security and lose the opportunity to use it. Though, as SS have said, if you need the money and have the asset, a Lendy loan is an easy thing to arrange. I'm not sure these huge bridging loans are helping SS. At the moment, SS/Lendy have nearly £800k of their working capital tied up in PBL005, waiting for investors to come along and take a part of that loan. They might not be able to do another large loan until they free up a large part of their capital. And those of their investors -- like merlin -- who might have capital available probably have taken as much of PBL005 as they feel comfortable with, so they don't want any more. So the bridging loan side of the business goes quiet while they try to find new investors. But new investors don't see an opportunity to spread their holdings within SS because there's only one opportunity available, so they look elsewhere -- and SS are stuck in a vicious circle. They'd be better off with five £400k loans than one £2M loan, but I expect that's easier said than done.
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oldgrumpy
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Post by oldgrumpy on Jul 24, 2014 10:41:47 GMT
On a slightly different note I am beginning to get seriously bored with SS due to the lethargy that seems to have overcome them. I have a pile of dead money in SS which I pulled out of another P2P just waiting for some good offers to come along. If it does not happen soon perhaps I will have to pull it out and go elsewhere, seriously boring!! ..... They'd be better off with five £400k loans than one £2M loan, but I expect that's easier said than done. ..... with only a £2M* and a £465K* loan in the offing/pipeline .... I expect the big'n will be a 12 monthers. There's plenty of narrowboat building/fitting out/restoration going on on the Midlands canals. Maybe Lendy's 6 month rates to the borrower are just too high. *figures corrected from original post. Put yer specs on Grumps!! 
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ramblin rose
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Post by ramblin rose on Jul 24, 2014 10:49:00 GMT
...................At the moment, SS/Lendy have nearly £800k of their working capital tied up in PBL005, waiting for investors to come along and take a part of that loan. They might not be able to do another large loan until they free up a large part of their capital............ I'm pretty sure that it's underwriter money that's available on PBL005, and not their own working capital. It was probably whilst you were still away - PBL005 had a big push from SS at the end, with incentives to get it covered, and then a few days later about £1 million turned up on it and there were some discussions during which SS confirmed that any private lender sales would be prioritised over the underwriter sales. Can't remember, but it's probably all in the PBL 005 thread.
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mikes1531
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Post by mikes1531 on Jul 24, 2014 11:11:10 GMT
...................At the moment, SS/Lendy have nearly £800k of their working capital tied up in PBL005, waiting for investors to come along and take a part of that loan. They might not be able to do another large loan until they free up a large part of their capital............ I'm pretty sure that it's underwriter money that's available on PBL005, and not their own working capital. It was probably whilst you were still away - PBL005 had a big push from SS at the end, with incentives to get it covered, and then a few days later about £1 million turned up on it and there were some discussions during which SS confirmed that any private lender sales would be prioritised over the underwriter sales. Can't remember, but it's probably all in the PBL 005 thread. That does sound familiar, now that you mention it. In that case, my theory is rubbish, and a shortage of working capital isn't a potential cause of the slowdown in SS/Lendy lending.
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Investor
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Post by Investor on Jul 24, 2014 11:32:56 GMT
..... They'd be better off with five £400k loans than one £2M loan, but I expect that's easier said than done. ..... with only a £2M* and a £465KM* loan in the offing/pipeline .... I expect the big'n will be a 12 monthers. There's plenty of narrowboat building/fitting out/restoration going on on the Midlands canals. Maybe Lendy's 6 month rates to the borrower are just too high. *figures corrected from original post. Put yer specs on Grumps!! Q1 465KM? Is that Billions Q2 Where do you buy yer specs from? Q3 Anyone know a guaranteed cure for pedantic a****** like me.
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oldgrumpy
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Post by oldgrumpy on Jul 24, 2014 11:43:45 GMT
Q3 Anyone know a guaranteed cure for pedantic a****** like me.
Iced banana milkshake before and afternoon siesta ... which is due soon. Anyway ... posts like that make you a focus or target for others of the same breed (me?) .... you shoudn't haf two weight longe.
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merlin
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Post by merlin on Jul 24, 2014 15:35:38 GMT
I'm pretty sure that it's underwriter money that's available on PBL005, and not their own working capital. It was probably whilst you were still away - PBL005 had a big push from SS at the end, with incentives to get it covered, and then a few days later about £1 million turned up on it and there were some discussions during which SS confirmed that any private lender sales would be prioritised over the underwriter sales. Can't remember, but it's probably all in the PBL 005 thread. That does sound familiar, now that you mention it. In that case, my theory is rubbish, and a shortage of working capital isn't a potential cause of the slowdown in SS/Lendy lending. Ah but with £9M of property loans sitting in the wings what chance a string of nice little boat loans coming over the horizon shortly?
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ramblin rose
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Post by ramblin rose on Jul 24, 2014 15:52:40 GMT
That does sound familiar, now that you mention it. In that case, my theory is rubbish, and a shortage of working capital isn't a potential cause of the slowdown in SS/Lendy lending. Ah but with £9M of property loans sitting in the wings what chance a string of nice little boat loans coming over the horizon shortly? Well, the loans are actually only just short of £2.5M, so not as much as you're thinking, but that's still a lot of money. I'm pretty sure there'd be no problem funding a string of boat loans though, if only they were to be found.
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mikes1531
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Post by mikes1531 on Jul 24, 2014 21:33:23 GMT
..... a £465KM* loan in the offing/pipeline .... Q1 465KM? Is that Billions Nah! That's kilometres -- it's a long pipeline!
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