rogerbu
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Post by rogerbu on Feb 8, 2018 16:12:07 GMT
ablrate I am sure I am missing something, but I don't see any advantage in Portfolio Loans for us retail lenders. Loans are the same risk as the 12-13% loans, but only return 8%! Capital not scheduled for return for 60 months if ever! There is no extra protection! They can't be sold on the SM (depend on new lender demand - with no ability to sell at a discount) I have dabbled in the mXX loan so that I can follow and understand, but I can't see any advantage. What am I missing?
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macq
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Post by macq on Feb 8, 2018 16:39:19 GMT
ablrate I am sure I am missing something, but I don't see any advantage in Portfolio Loans for us retail lenders. Loans are the same risk as the 12-13% loans, but only return 8%! Capital not scheduled for return for 60 months if ever! There is no extra protection! They can't be sold on the SM (depend on new lender demand - with no ability to sell at a discount) I have dabbled in the mXX loan so that I can follow and understand, but I can't see any advantage. What am I missing? i have asked this question elsewhere but is it 60 months for capital return as per details or 24 months as per docs? Guess i need to get home & check
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Post by ablrate on Feb 8, 2018 16:39:41 GMT
ablrate I am sure I am missing something, but I don't see any advantage in Portfolio Loans for us retail lenders. Loans are the same risk as the 12-13% loans, but only return 8%! Capital not scheduled for return for 60 months if ever! There is no extra protection! They can't be sold on the SM (depend on new lender demand - with no ability to sell at a discount) I have dabbled in the mXX loan so that I can follow and understand, but I can't see any advantage. What am I missing? The existing loans pay back shortly. They would not have redrawn without a flexible funding structure as the new portfolio are. So you would not be able to have any of these loans. Capital is loaned in two year tranches with maximum on the whole loan at 60 months. We have been asked multiple times on here to simplify the secondary market and not have premiums and discounts. This functionality is for those people and we also wanted to create a solid IFISA product for people who didn't want to self select. If you don't like PL's we completely respect that, that is why we still will be issuing self-select loans and have no plans to stop them.
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nw99
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Post by nw99 on Feb 8, 2018 18:27:34 GMT
The secondary market is what makes Ablrate so good please keep it as it is . Liquidity is awesome
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poppyland
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Post by poppyland on Feb 8, 2018 19:17:45 GMT
Yes, the secondary market is perfect as it is. You can almost always buy and sell just about any loan. Now we just need a couple of new ones, provided they're good of course.
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ceejay
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Post by ceejay on Feb 8, 2018 19:45:25 GMT
While I agree that the secondary market as it is is great for managing single loan investments, I can see the point of the new portfolio loans (I think).
There just aren't enough of the single loans for me to invest my money in - I had planned to put double the amount I currently have in ABL, but without a suitable destination the rest will stay elsewhere. So having some more/different loan products in the market is a good thing. I understand the attraction of bundling smaller loans together, and I like the idea of the 2 year tranche. I think I understand the logic that for this class of loan to work, the limited SM is indicated. I can even live with the idea that the rate might be lower than the single loans we've been used to...
But...
I've not plonked any money in today's loan, even though I have a modest amount waiting for a home, because I think that for THIS loan the rate is not appropriate for the level of security. That's an entirely different thing from saying that I don't like Portfolio Loans - I just don't like this one, until someone does a better job of explaining the security than they have done so far.
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blender
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Post by blender on Feb 8, 2018 19:54:56 GMT
While I agree that the secondary market as it is is great for managing single loan investments, I can see the point of the new portfolio loans (I think). There just aren't enough of the single loans for me to invest my money in - I had planned to put double the amount I currently have in ABL, but without a suitable destination the rest will stay elsewhere. So having some more/different loan products in the market is a good thing. I understand the attraction of bundling smaller loans together, and I like the idea of the 2 year tranche. I think I understand the logic that for this class of loan to work, the limited SM is indicated. I can even live with the idea that the rate might be lower than the single loans we've been used to... But... I've not plonked any money in today's loan, even though I have a modest amount waiting for a home, because I think that for THIS loan the rate is not appropriate for the level of security. That's an entirely different thing from saying that I don't like Portfolio Loans - I just don't like this one, until someone does a better job of explaining the security than they have done so far. In any case today's loan will replace two existing single loans, at some time, and so does not increase diversity. Agreed new portfolio loans a good addition to the Ablrate package.
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poppyland
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Post by poppyland on Feb 8, 2018 20:51:24 GMT
While I agree that the secondary market as it is is great for managing single loan investments, I can see the point of the new portfolio loans (I think). There just aren't enough of the single loans for me to invest my money in - I had planned to put double the amount I currently have in ABL, but without a suitable destination the rest will stay elsewhere. So having some more/different loan products in the market is a good thing. I understand the attraction of bundling smaller loans together, and I like the idea of the 2 year tranche. I think I understand the logic that for this class of loan to work, the limited SM is indicated. I can even live with the idea that the rate might be lower than the single loans we've been used to... But... I've not plonked any money in today's loan, even though I have a modest amount waiting for a home, because I think that for THIS loan the rate is not appropriate for the level of security. That's an entirely different thing from saying that I don't like Portfolio Loans - I just don't like this one, until someone does a better job of explaining the security than they have done so far. While I agree that more loans would be good, and I will be glad when some appear, it's also important that Ablrate don't feel under excessive pressure to originate new loans to meet demand. This could easily lead to them being tempted to cut corners with due diligence, and offer loans that don't really have proper loan to value ratios or proper security. In the short term investors would be happy: lots of yummy new loans. In the long run investors would feel betrayed and taken for a ride, as the loans go into default and capital returns come no where near the supposed "value" of the security.
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blender
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Post by blender on Feb 8, 2018 22:33:04 GMT
This is true, poppyland, but the loan book provides its own pressure to replace the loans maturing and amortising in 2018, and to grow. A rough calculation shows that Ablrate will need to originate nearly £8M to replace the scheduled reduction in the loan book from now to the end of 2018. It's a treadmill, whether or not lenders shout for new loans. Also the high rates that some borrowers are paying overall, often 25% plus, means that we might expect some more to be refinanced early at lower rates. Ablrate really need these longer term facilities, imo.
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Post by pmac67 on Feb 11, 2018 11:13:27 GMT
I staggered on reading 8% !! I read an email which talked of letters of credit and guarantors ?? I've loaned on other platforms to companies with good credit rating and had Director guarantees and lost every single penny of my investment. I want to see assets with official valuations not letters saying 'yeah things are going really well and we've got lots of people wanting to buy our products in the future, maybe' Just my own personal feeling...
This opportunity has been in the pipeline a while now and it's not for me. I do note however this investment has the iSA wrapper so may be attractive to some investors.
On a positive I really like ablrate they are probably my favourite right now and I will continue investing, as stated elsewhere here you don't have to invest in something if you don't want to. I hope this is successful because I do want this p2p to succeed !
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Post by ablrate on Feb 13, 2018 16:11:46 GMT
I staggered on reading 8% !! I read an email which talked of letters of credit and guarantors ?? I've loaned on other platforms to companies with good credit rating and had Director guarantees and lost every single penny of my investment. I want to see assets with official valuations not letters saying 'yeah things are going really well and we've got lots of people wanting to buy our products in the future, maybe' Just my own personal feeling... This opportunity has been in the pipeline a while now and it's not for me. I do note however this investment has the iSA wrapper so may be attractive to some investors. On a positive I really like ablrate they are probably my favourite right now and I will continue investing, as stated elsewhere here you don't have to invest in something if you don't want to. I hope this is successful because I do want this p2p to succeed ! Thanks for the comments, always appreciated either way. International Trade Finance operates on letters of credit - these are issued by banks to other banks to guarantee a payment will happen, which is the comfort a manufacturer may need to begin production for a specif order.. It also has insured contracts via an institutional grade insurance (i.e this particular insurance company has 38000 employees, 248 subsidiaries and 4.7 trillion yen in revenues - about £31 billion). These contracts are generally 60-90 days. Basically as an example - what happens is Company A who sells kids buggies, for example, gets an order from a big UK shop (lets call it MumCare) - Company A doesn't have the balance sheet to make such a big order so turns to M**. They know Mumcare are a big company and have good credit, so they get the purchase order and insure the payment against MumCare, they then organise a letter of credit to the manufacturers bank... order goes ahead... goods are shipped... MumCare pay and Company A receives its cut of the sale minus fees. We have seen some other questions on here to and have sent those to the borrower to answer specifically and we will post those or upload them to the platform and let you know.
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elliotn
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Post by elliotn on Feb 14, 2018 3:29:48 GMT
Hopefully the borrower provides the forecasts that shows them making their first ever profit after financing with their new equity partner ie quantifying all that tech-enabling, systems’ leverage and so on that requires such a scything lender haircut.
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macq
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Post by macq on Feb 14, 2018 8:22:35 GMT
Before we get the answers to questions it would from an investment point of view be interesting to see which out of all the questions asked were considered relevant in the first place
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blender
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Post by blender on Feb 14, 2018 8:38:56 GMT
Hopefully the borrower provides the forecasts that shows them making their first ever profit after financing with their new equity partner ie quantifying all that tech-enabling, systems’ leverage and so on that requires such a scything lender haircut. I don't think the borrower is paying any less per month for this new loan. It's just that at least a third of each monthly repayment (equivalent 4%) is retained by Ablrate as fees, though we have not been allowed to see the actual figure for this loan.
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