stevio
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Post by stevio on Feb 8, 2018 12:11:49 GMT
ablrate would you be able to provide a simple explanation in layman's terms of how these loans work please? - Are we lending to M** or their customers? - So are M** taking the risk of the money they loan out or are Ablrate lenders? If M**, then we need to know: (a) Financial stability of the company (b) How their business works (a) M** appear to have substantial debt, which has been increasing. If the business is profitable, why has debt increased and not been paid off? (b) In terms of business process, looks like M** take legal charge over the goods (at cost value), 10% deposit, receivables from end customer (contract some how?) and insurance if end customer doesn't pay - is this correct? Can you provide all the steps in layman's terms which help provide security to their business? How does this differ in process and risk to Invoice Finance from say MarketInvoice? Thanks!
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elliotn
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Post by elliotn on Feb 8, 2018 12:56:30 GMT
The business before this JV was not profitable - certainly in the last couple of accounting years - and debts exceeded the company's assets (the accounts required a special note that their main creditor agreed to keep this company as a going concern).
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elliotn
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Post by elliotn on Feb 8, 2018 12:59:43 GMT
& what are the primary differences from the original security that requires the substantial investor haircut?
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elliotn
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Post by elliotn on Feb 8, 2018 13:33:20 GMT
I'm yet to read the new docs stevio but the business until now aiui has been: - we are providing working capital to Mxx - Mxx previously assumed the credit risk of individual trades and swapped out failed transactions ie lender risk relies on Mxx as a going concern - fiancial stability relied on their main creditor in the British Virgin Islands supporting them as a going concern (note: this should now have changed following the equity joint venture) - Mxx arrange export-import finance for small and medium enterprises, this amount has trade insurance of 90% (or bank confirmation the SME has the equivalent funds available) and the customer places the remaining 10% as a deposit with Mxx - Mxx were not profitable so debts increased (presumably the JV pays this off) - MarketInvoice provide finance on monies owed by any customer (trade debtors), Mxx specialise in funding specific ex-im transactions that are covered by insurance + deposit. |
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macq
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Post by macq on Feb 8, 2018 13:49:00 GMT
maybe of interest-just seen a piece on the P2P finance news website from today that MK-I are to start using the same trade credit insurance provider that MTF already seem to use so assume similar type product
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elliotn
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Post by elliotn on Feb 9, 2018 14:24:15 GMT
The main portfolio thread is discussing the accrued interest treatment so I’ve reverted to here. The proposal details millions in revenues but the operating company has never reported a penny's profit since coming out of dormancy in 2013. We are offered the opportunity to share in the institutional grade lending of over 5 millioin pounds but the the funding costs are greater than the operating profits. What are the forecast profits (after funding) for the next three years that have persuaded the equity partner to invest substantial funds in a loss making company that required creditor sign off as a going concern. The presentation of the borrowing proposal wothout any reference to the continuous, reported losses made has shaken my confidence in ablrate more than missing security charges and the absence of intra-term updates. Taking the haircut of 4% coupon for its own monthly fee when inestors have been given no quantified upside to the joint venture and how its first reported profit will be made is, I'm afraid, Lendyesque in my honest opinion. |
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