elliotn
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Post by elliotn on Mar 8, 2018 1:55:34 GMT
MoneyThingInteresting how much value they put against the stock in the latest accounts at CH vs the stock value in the loan particulars. They are quite different. Perhaps they now have more stock. They also had quite a bit of cash in the business at the time of the last published accounts that could be used for expansion perhaps. It would be interesting to know how this has been used. I would be comfortable if they used the same stock valuation method in the company accounts and the loan particulars, and then calculated the LTV. Of course they may have done that. Stock in the company accounts will have been valued at cost I assume. Per metoo post, these are held at cost (lower if they've lost value) ie companies are not allowed to realise any profit element before sale; this will be realised in turnover when sold, so try doubling the stock amount (for starters) to assess your ltv comfort levels.
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jlend
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Post by jlend on Mar 8, 2018 6:50:07 GMT
MoneyThing Interesting how much value they put against the stock in the latest accounts at CH vs the stock value in the loan particulars. They are quite different. Perhaps they now have more stock. They also had quite a bit of cash in the business at the time of the last published accounts that could be used for expansion perhaps. It would be interesting to know how this has been used. I would be comfortable if they used the same stock valuation method in the company accounts and the loan particulars, and then calculated the LTV. Of course they may have done that. Stock in the company accounts will have been valued at cost I assume. Per metoo post, these are held at cost (lower if they've lost value) ie companies are not allowed to realise any profit element before sale; this will be realised in turnover when sold, so try doubling the stock amount (for starters) to assess your ltv comfort levels. Yep I know that is the case from my own accounts. The comment was just point this out. I was surprised the valuation was 4 times the stock value in the last accounts but this may well be correct for a number of reasons including more stock and the delta between cost/value and retail price. I don't dislike the loan in general I must say
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jlend
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Post by jlend on Mar 8, 2018 6:53:33 GMT
Stock in the company accounts will have been valued at cost I assume. From the 31 May 2017 accounts: Yep normal account practice. That is what I do.
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elliotn
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Post by elliotn on Mar 8, 2018 7:04:48 GMT
Per metoo post, these are held at cost (lower if they've lost value) ie companies are not allowed to realise any profit element before sale; this will be realised in turnover when sold, so try doubling the stock amount (for starters) to assess your ltv comfort levels. Yep I know that is the case from my own accounts. The comment was just point this out. I was surprised the valuation was 4 times the stock value in the last accounts but this may well be correct for a number of reasons including more stock and the delta between cost/value and retail price. I don't dislike the loan in general I must say To further bolster your point, we are told there is stock in the company being excluded from our 50% ltv calc :/
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jlend
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Post by jlend on Mar 8, 2018 7:12:26 GMT
I am more careful with ltv figures these days.
I would have thought in the worst case liquidation sale of all the assets, they are likely to go for less than the cost/net realisable value. At the moment I am not sure what this is vs the 2.4m quoted figure for retail in the loan details.
It may be all fine. I just can't tell.
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Post by SophieThing on Mar 8, 2018 7:19:59 GMT
MoneyThing , SophieThing Due to the slightly unusual clause " Lenders will receive interest as a monthly payment provided that the interest has been received by the borrower"..can MT confirm that if no interest is paid, the asset will be sold and interest accrual will be paid out of the proceeds? Also, does the clause absolve the Guarantor/Debenture from the Interest element of this loan in the event of a shortfall? Most MT loans are serviced by the borrower, they've just made the wording clearer, so no change. MT provide forbearance on late payments as deemed necessary and will initiate recovery if they believe arrears will not be made up. Recovery will be for all outstanding interest (probably then at a default rate) and all remaining capital from the loan security provided. Morning, Yes it is exactly as elliotn described. We regularly have content reviewed by our compliance team and they made some recommendations on making the content even more clear. We will be releasing more information shortly on loan management and updates, along with T&C changes to bring them up to date with current practice. It was going to be this week, now likely to be next as we are making tweaks following lender feedback. Kind regards Sophie
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Post by SophieThing on Mar 8, 2018 7:22:29 GMT
I'd like to see some clarification that even if the borrower does not receive interest on the loan (assets held for security), that the interest will simply accrue until the point where the borrower does receive interest on the asset. Also like to see confirmation that this does not get caught under the umbrella of "wholesale lending" (is that the right term?) - i.e. whereby P2P lenders are lending money to intermediaries who then lend it out - I thought that legislation did not permit this? I'd also like to understand how a check-and-balance is put in place to ensure that the borrower's interests remain aligned with lenders' - lending someone else's money secured on someone else's asset can introduce all sorts of predictable consequences. Otherwise I quite like the loan(s). Hi kermie, This is a direct loan to a business and not wholesale lending. The loan is against their retail stock that they own. Kind regards Sophie
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stub8535
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Post by stub8535 on Mar 8, 2018 8:34:02 GMT
I'd like to see some clarification that even if the borrower does not receive interest on the loan (assets held for security), that the interest will simply accrue until the point where the borrower does receive interest on the asset. Also like to see confirmation that this does not get caught under the umbrella of "wholesale lending" (is that the right term?) - i.e. whereby P2P lenders are lending money to intermediaries who then lend it out - I thought that legislation did not permit this? I'd also like to understand how a check-and-balance is put in place to ensure that the borrower's interests remain aligned with lenders' - lending someone else's money secured on someone else's asset can introduce all sorts of predictable consequences. Otherwise I quite like the loan(s). Hi kermie, This is a direct loan to a business and not wholesale lending. The loan is against their retail stock that they own. Kind regards Sophie So why the need for the statement in the loan particulars SophieThing? It should be in your general terms and conditions acting on all loans shouldn't it?
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Post by SophieThing on Mar 8, 2018 9:03:49 GMT
Hi stub8535I think you've mis-read it. Let me have a look at the language on the listing in case it's not clear. This is a straightforward loan to a business secured on their stock, that they own. It's not lending on. The interest payments, as with all loans, are dependant on the borrower themselves paying the interest. We've made that specific in this loan listing, as with the others we have recently launched, to make it clearer that lenders will only get interest if the borrower pays interest. That's already in the T&C's and is (I think) obvious in any case, but in the interest of making sure that everyone understands that, we're adding better language. We will also update the other listings too, as a general language improvement. Kind regards Sophie
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SteveT
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Post by SteveT on Mar 8, 2018 9:06:45 GMT
Let me have a look at the language on the listing in case it's not clear. I suspect a typo in the loan listings. Makes more sense if the sentence read "Lenders will receive interest as a monthly payment provided that the interest has been received from the borrower." Or else "Lenders will receive interest as a monthly payment provided that the interest has been paid by the borrower." But not "received by"!
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stub8535
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Post by stub8535 on Mar 8, 2018 9:10:26 GMT
Hi stub8535I think you've mis-read it. Let me have a look at the language on the listing in case it's not clear. This is a straightforward loan to a business secured on their stock, that they own. It's not lending on. The interest payments, as with all loans, are dependant on the borrower themselves paying the interest. We've made that specific in this loan listing, as with the others we have recently launched, to make it clearer that lenders will only get interest if the borrower pays interest. That's already in the T&C's and is (I think) obvious in any case, but in the interest of making sure that everyone understands that, we're adding better language. We will also update the other listings too, as a general language improvement. Kind regards Sophie As I have responded on another PM Sophie the comment needs to be in a seperatly clearly headed section on "terms and conditions reminder" maybe? I am certain you will be able to adjust things to make it clearer. Elliot read it the way you meant it so it could just be me. Being a teacher educated to above degree I hope I am not losing my language skills😉 as I approach retirement.
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Post by mike1963 on Mar 8, 2018 9:15:06 GMT
Let me have a look at the language on the listing in case it's not clear. I suspect a typo in the loan listings. Makes more sense if the sentence read "Lenders will receive interest as a monthly payment provided that the interest has been received from the borrower." Or else "Lenders will receive interest as a monthly payment provided that the interest has been paid by the borrower." But not "received by"! Exactly!...I agree that this one word is causing all the confusion.
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Post by SophieThing on Mar 8, 2018 9:25:42 GMT
OK updated as suggested, thanks everyone.
Next time I'll try to make my 'better' language better.
Kind regards
Sophie
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andy1
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Post by andy1 on Mar 8, 2018 10:01:29 GMT
I am more careful with ltv figures these days. I would have thought in the worst case liquidation sale of all the assets, they are likely to go for less than the cost/net realisable value. At the moment I am not sure what this is vs the 2.4m quoted figure for retail in the loan details. It may be all fine. I just can't tell. Conceptually I'm not sure it's possible to sell an item for less than its net realisable value but I do take your point on the whole valuation thing. Based on their filed accounts I think the true LTV is somewhere between 50% and 200%. That leaves me with 2 hours to decide whether or not I'm in.
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elliotn
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Post by elliotn on Mar 8, 2018 10:13:06 GMT
I am more careful with ltv figures these days. I would have thought in the worst case liquidation sale of all the assets, they are likely to go for less than the cost/net realisable value. At the moment I am not sure what this is vs the 2.4m quoted figure for retail in the loan details. It may be all fine. I just can't tell. Conceptually I'm not sure it's possible to sell an item for less than its net realisable value but I do take your point on the whole valuation thing. Based on their filed accounts I think the true LTV is somewhere between 50% and 200%. That leaves me with 2 hours to decide whether or not I'm in. In this instance jlend means any estimates the company/auditors have made as to the stock’s net realisable value in the accounts. It’s perfectly possible that any item could realise less than their guesstimate in a forced sale.
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