sj
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Post by sj on Dec 13, 2017 18:47:25 GMT
Having read the letter, the word that sticks in my mind is "expected". That is different to a definite thing - but why? What issues could arise from a HS2 compensation payout? The business itself seems sound, has anybody in DD land done some digging on the creditworthiness of the business/directors? Are they likely to honour a debt if it goes belly-up or will they wriggle out of it?
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stokeloans
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Post by stokeloans on Dec 13, 2017 19:36:21 GMT
I thought it was a woolly head covering 😉
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mary
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Post by mary on Dec 13, 2017 19:39:52 GMT
Given the lack of solid security, I'm surprised this is only 12%.
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shimself
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Post by shimself on Dec 13, 2017 19:42:33 GMT
Sorry both, I looked for and failed to see the minimum term Loan Structure and Repayment Terms Interest payments: Lenders will receive interest as a monthly payment and the loan has a three-month minimum interest requirement due to the potential for it to run shorter than this. I know I know, only temporary blindness
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Post by badboyyardy on Dec 13, 2017 21:32:45 GMT
Having read the PDF in more detail I still like this but slightly confused if they have already had the majority of the relocation funds granted and given for the move what is the actual loan for? A bridging loan at minimal 15-20% but 3 months minimum interest......
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Post by eascogo on Dec 13, 2017 22:08:27 GMT
Having read the PDF in more detail I still like this but slightly confused if they have already had the majority of the relocation funds granted and given for the move what is the actual loan for? A bridging loan at minimal 15-20% but 3 months minimum interest...... To date HS2 paid some £250k towards relocation costs but the borrower needs further cash to pay for conversion work in new larger premises. Substantial payouts by HS2, more than sufficient to repay the loan, are expected in January 2018. More discerning investors may have reservations but to me this loan sounds comparatively robust. It is possible that the loan may repay before the 3-month minimum term agreed and thereby increasing the 12% rate somewhat. Am I wide off the mark?
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Post by df on Dec 13, 2017 23:07:43 GMT
Given the lack of solid security, I'm surprised this is only 12%. In SME world, 12% is not low for business like this. They could've got much lower rate elsewhere. AC, for example, is flexible in terms of the length of loan and type of security. I'm surprised why businesses end up going for higher cost borrowing.
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Post by df on Dec 13, 2017 23:44:41 GMT
I've not started a detailed analysis yet, but my immediate reaction is .... At Last !! A loan to a real business, actually making something, apparently profitably over a number of years. (but with a background in manufacturing I am somewhat biased) I think D**** W*** (FP***N) is also in this category. I like the fact hat MT is expanding to different territories. I'll definitely invest something in this one, but not sure of the amount yet (probably my maximum SME-per-loan-allowance+MT credibility bonus ).
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elliotn
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Post by elliotn on Dec 14, 2017 2:19:09 GMT
Sorry both, I looked for and failed to see the minimum term Quote Please note that the freehold is held by the shareholders in a different limited company with incumbent lenders holding a charge. Any compensation for the freehold will be paid to this separate company. It is for this reason our facility is not secured by the freehold and although we expect that an element of the compensation from the freehold could be used to pay off the gross loans, it will ultimately be paid to a different company over which we will not be holding a debenture.The compensation paid for business disruption will be paid directly to S****** (borrower) and it is this part of the compensation that will be used to repay MoneyThing lenders.
1 I get the impression from this that the borrower's owners have something to do with the freehold, so it worries me that no sort of charge is placed. 2 The compensation for disturbance does come direct to the borrower so I'd have thought something could be done to point this in our direction Will check in more detail today but the freehold was hived off in another borrower’s company that will receive the guaranteed compensation (albeit they are asking for more). Agree it would be much more comforting for the more ‘speculative’ element to have been paid to a solicitors with MT as first beneficiary.
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keith
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Post by keith on Dec 14, 2017 7:55:49 GMT
Not convinced about this one. It appears that there are a couple of charges against the company which I guess is the freehold issue mentioned above. I don’t understand why the existing charge holders would consent to a deed of priority relegating their charge below MT. I would have thought that the first thing that the company would have to do would be to clear any charge against the property before the trains go through it.
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shimself
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Post by shimself on Dec 14, 2017 8:04:27 GMT
Not convinced about this one. It appears that there are a couple of charges against the company which I guess is the freehold issue mentioned above. I don’t understand why the existing charge holders would consent to a deed of priority relegating their charge below MT. I would have thought that the first thing that the company would have to do would be to clear any charge against the property before the trains go through it. Well sure, but we have been told we expect that an element of the compensation from the freehold could be used to pay off the gross loans, which I think means that the first charge holder AND our loan are covered. No need us to get priority
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SteveT
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Post by SteveT on Dec 14, 2017 8:14:31 GMT
Not convinced about this one. It appears that there are a couple of charges against the company which I guess is the freehold issue mentioned above. I don’t understand why the existing charge holders would consent to a deed of priority relegating their charge below MT. I would have thought that the first thing that the company would have to do would be to clear any charge against the property before the trains go through it. AIUI, the charges against the trading company cannot relate to the premises since it doesn't own the premises. As to the rationale behind the deed of priority for the MT loan, MT are hardly likely to release the funds until their solicitors have confirmed that the deed is in place. I suspect the existing charge-holders will have extracted their pound of flesh somewhere along the line.
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shimself
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Post by shimself on Dec 14, 2017 8:34:13 GMT
Not convinced about this one. It appears that there are a couple of charges against the company which I guess is the freehold issue mentioned above. I don’t understand why the existing charge holders would consent to a deed of priority relegating their charge below MT. I would have thought that the first thing that the company would have to do would be to clear any charge against the property before the trains go through it. AIUI, the charges against the trading company cannot relate to the premises since it doesn't own the premises. As to the rationale behind the deed of priority for the MT loan, MT are hardly likely to release the funds until their solicitors have confirmed that the deed is in place. I suspect the existing charge-holders will have extracted their pound of flesh somewhere along the line. There is NO deed of priority of any sort. What I was querying is why it was not possible to get some sort of security
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SteveT
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Post by SteveT on Dec 14, 2017 8:51:37 GMT
AIUI, the charges against the trading company cannot relate to the premises since it doesn't own the premises. As to the rationale behind the deed of priority for the MT loan, MT are hardly likely to release the funds until their solicitors have confirmed that the deed is in place. I suspect the existing charge-holders will have extracted their pound of flesh somewhere along the line. There is NO deed of priority of any sort. What I was querying is why it was not possible to get some sort of security From the loan details: Security
Whilst we have no tangible security, we will hold a debenture over the trading business along with personal guarantees from the three shareholders for the total of the gross loans. There is also a deed of priority ranking existing charges behind our own.
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snowmobile
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Post by snowmobile on Dec 14, 2017 9:15:54 GMT
The more I think about this scenario the more questions it raises.
I don't understand why there is a sudden desperate need for substantial funds just three weeks before the compensation is due. Why are they willing to pay three months interest at a high rate for what is effectively a three week loan?
Why were the existing charge holders not willing to advance further funds, rather than agree to their charges being subordinated?
We are told the funds are required to settle contractors invoices and it is implied that work will stop unless they are paid. Why would they commit to all of this work without having the means to pay the suppliers? I wonder what payment terms were agreed with the contractors that has left them in this situation. Has the compensation payment been delayed?
We are told that the new leasehold premises will be 'state of the art'. Are the new premises being fitted out with new 'state of the art' equipment and will this be owned by the company? Could a charge on this equipment be offered as some tangible security to support the loan?
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