bod
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Post by bod on Sept 6, 2018 15:05:59 GMT
The home may have been running for 18 years but the company now running has only been incorporated 4 years and the director identified as responsible was made a director last year around the time the CQC found the establishment as needing improvement. According to the CQC website, there has been a revised assessment made this year and the report is pending. It is a shame this is not published as then we could judge if the new director is effecting a turn around or not. I'm tending to side with Bobo on this one especially as my ready funds are only modest and we have some other opportunities promised in the pipeline. I might chuck a few sovs in for fun. LW I may have misunderstood but I read the info on CH as the Company was incorporated in 2010 with the Director being in place since inception. Several other companies he was Director of have either been liquidated or dissolved via compulaory stirke off. One of the liquidated Companies held the 2 care homes until it was liquidated and they were then purchased by the current company. Hence the Director through different companies has been managing these homes for the 18 years stated in the borrowing proposal.
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hazellend
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Post by hazellend on Sept 6, 2018 15:09:57 GMT
Presumably interest can be offset against profit, or losses carried over, so net interest is less But so can the rent they’ve been paying to date, so I don’t think it’s relevant Sure but rent is permanent and usually increasing but interest is reducing and finished after 4 years
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Post by df on Sept 6, 2018 15:47:39 GMT
I’m in, only read the documents briefly as on the move today and it was filling fast. Looks okay to me though The same, I didn't have much time, just scanned the info to get the main points. 2nd charge is unattractive - I wouldn't invest in it if it was interest only, but quite happy to take a risk on amortising loans. Other comforting features are - it is ABL loan (I trust ABL's DD more than some others) and ABL's SM has a long track record of working well (should I decide to reduce or withdraw from this loan 6 months later).
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snowmobile
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Post by snowmobile on Sept 6, 2018 16:07:15 GMT
The home may have been running for 18 years but the company now running has only been incorporated 4 years and the director identified as responsible was made a director last year around the time the CQC found the establishment as needing improvement. According to the CQC website, there has been a revised assessment made this year and the report is pending. It is a shame this is not published as then we could judge if the new director is effecting a turn around or not. I'm tending to side with Bobo on this one especially as my ready funds are only modest and we have some other opportunities promised in the pipeline. I might chuck a few sovs in for fun. LW I may have misunderstood but I read the info on CH as the Company was incorporated in 2010 with the Director being in place since inception. Several other companies he was Director of have either been liquidated or dissolved via compulaory stirke off. One of the liquidated Companies held the 2 care homes until it was liquidated and they were then purchased by the current company. Hence the Director through different companies has been managing these homes for the 18 years stated in the borrowing proposal. The company incorporated in 2010 appears dormant, certainly the last filed accounts were. I believe it is the other subsidiary (incorporated in 2001) that operates both care homes. The holding company, named in the borrowing proposal as the borrower, is the one that has been incorporated for 4 years with the sole director appointed last year. A CQC report for the other care home was published earlier this year and also found 'requires improvement'. I have posted relevant links on DD central.
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Post by scottdt on Sept 6, 2018 16:12:46 GMT
I’m in, only read the documents briefly as on the move today and it was filling fast. Looks okay to me though The same, I didn't have much time, just scanned the info to get the main points. 2nd charge is unattractive - I wouldn't invest in it if it was interest only, but quite happy to take a risk on amortising loans. Other comforting features are - it is ABL loan (I trust ABL's DD more than some others) and ABL's SM has a long track record of working well (should I decide to reduce or withdraw from this loan 6 months later). My view also. Plus, with c. £4m of loans “due” to repay by the end of the year, that could further boost SM demand.
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Post by df on Sept 6, 2018 16:24:04 GMT
The same, I didn't have much time, just scanned the info to get the main points. 2nd charge is unattractive - I wouldn't invest in it if it was interest only, but quite happy to take a risk on amortising loans. Other comforting features are - it is ABL loan (I trust ABL's DD more than some others) and ABL's SM has a long track record of working well (should I decide to reduce or withdraw from this loan 6 months later). My view also. Plus, with c. £4m of loans “due” to repay by the end of the year, that could further boost SM demand. Exactly! ABL is not likely to be a subject to mass exodus in near future. Out of platforms I use, ABL is the most stable in 10%+ club.
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bod
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Post by bod on Sept 6, 2018 17:27:41 GMT
I may have misunderstood but I read the info on CH as the Company was incorporated in 2010 with the Director being in place since inception. Several other companies he was Director of have either been liquidated or dissolved via compulaory stirke off. One of the liquidated Companies held the 2 care homes until it was liquidated and they were then purchased by the current company. Hence the Director through different companies has been managing these homes for the 18 years stated in the borrowing proposal. The company incorporated in 2010 appears dormant, certainly the last filed accounts were. I believe it is the other subsidiary (incorporated in 2001) that operates both care homes. The holding company, named in the borrowing proposal as the borrower, is the one that has been incorporated for 4 years with the sole director appointed last year. A CQC report for the other care home was published earlier this year and also found 'requires improvement'. I have posted relevant links on DD central.
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bod
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Post by bod on Sept 6, 2018 17:31:19 GMT
Thanks, I don't have access to DD Central. I was slightly confused with the 2 simimilarly named companies, the one mentioned in the proposal and the other of same name but including (Middlesborough)
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gustapher
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Post by gustapher on Sept 6, 2018 17:34:50 GMT
My view also. Plus, with c. £4m of loans “due” to repay by the end of the year, that could further boost SM demand. Exactly! ABL is not likely to be a subject to mass exodus in near future. Out of platforms I use, ABL is the most stable in 10%+ club. Time will tell but I don't think trusting ABL's DD or the above thinking is wise. I do like ABL and have been in way before the recent surge but just remember: - Everyone was saying the exact same thing about MT before that blew up. - One bad default anywhere on the platform and that sentiment will evaporate in an instant. - SM Premiums have been dropping over recent weeks. - Assets are not sufficient to cover this loan if the business goes under (you'd be looking at losing at least 60% of capital based on worst case valuation) and as we have seen elsewhere doing DD like reading accounts and going on CH is of limited value if a director is adept at playing games. Personally I'm with registerme on this one. I'll admit I'm not being scientific or rational about this but care homes have been on my avoid list ever since my early days on FC. Care homes, lawyers, architects... all sound businesses on paper that just went *poof* in the night. I'm sitting out based purely on that but good luck to all who invest.
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sapphire
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Post by sapphire on Sept 6, 2018 18:30:53 GMT
I am finding it difficult to understand why it is appropriate to consider the going value of the business as the appropriate value underpinning this loan, as has been done in the borrowing proposal.
The security supporting a loan is meant to be 'robust' and something which can be liquidated in all circumstances i.e. even if the business fails.
Indeed if the business is running fine then one would expect the interest costs to be serviced out of its profits and so the value of the security is not really relevant in this scenario. The security's true role and real value is if the business fails, in which event I think it is the 'bricks and mortar' valuation i.e. £1.5m which is relevant, and so something which should have been used for calculating the LTV. So, I think using the £2.8m figure is inappropriate and misleading.
Happy to be enlightened if I have missed something.
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blender
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Post by blender on Sept 6, 2018 19:47:35 GMT
I am finding it difficult to understand why it is appropriate to consider the going value of the business as the appropriate value underpinning this loan, as has been done in the borrowing proposal. The security supporting a loan is meant to be 'robust' and something which can be liquidated in all circumstances i.e. even if the business fails. Indeed if the business is running fine then one would expect the interest costs to be serviced out of its profits and so the value of the security is not really relevant in this scenario. The security's true role and real value is if the business fails, in which event I think it is the 'bricks and mortar' valuation i.e. £1.5m which is relevant, and so something which should have been used for calculating the LTV. So, I think using the £2.8m figure is inappropriate and misleading. Happy to be enlightened if I have missed something.Yes, if you subtract the first charge, of £1.2M, from the bricks and mortar valuation you get £300k, which is our security. The LTV is then 200% for our loan of £600k. If this were not the case, then the borrower would not be paying 21% overall. This is not much different from an unsecured loan. But at least it is amortising. The valuation gives the complete picture and you have to make your own assessment - as you have done.
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Post by df on Sept 6, 2018 20:22:21 GMT
Exactly! ABL is not likely to be a subject to mass exodus in near future. Out of platforms I use, ABL is the most stable in 10%+ club. Time will tell but I don't think trusting ABL's DD or the above thinking is wise. I do like ABL and have been in way before the recent surge but just remember: - Everyone was saying the exact same thing about MT before that blew up. - One bad default anywhere on the platform and that sentiment will evaporate in an instant. - SM Premiums have been dropping over recent weeks. - Assets are not sufficient to cover this loan if the business goes under (you'd be looking at losing at least 60% of capital based on worst case valuation) and as we have seen elsewhere doing DD like reading accounts and going on CH is of limited value if a director is adept at playing games. Personally I'm with registerme on this one. I'll admit I'm not being scientific or rational about this but care homes have been on my avoid list ever since my early days on FC. Care homes, lawyers, architects... all sound businesses on paper that just went *poof* in the night. I'm sitting out based purely on that but good luck to all who invest. Some say that trusting the whole p2p industry is unwise... The risk is always there. I hope everyone who invests in this loan understands the risk involved. Not only MT, SS and COL had received similar SM sentiments. Nobody can rule out Abl's SM turning into a "liquid monster", but so far it has been stable. Prospect of loosing 60% of capital is not far off from what I've lost in 1st charge Welsh castle. However, this loan sounds to me somewhat safer than majority of 13% loans across various platforms.
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snowmobile
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Post by snowmobile on Sept 7, 2018 1:52:12 GMT
Thanks, I don't have access to DD Central. I was slightly confused with the 2 simimilarly named companies, the one mentioned in the proposal and the other of same name but including (Middlesborough) It is confusing with so many companies with similar names. The one mentioned in the proposal is the parent/holding company and has 'Group' in the company name. The two subsidiaries are the dormant company (without 'Group' in the name) and the care home operating company (including the town in the name). Hope that makes sense!
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elliotn
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Post by elliotn on Sept 7, 2018 4:21:16 GMT
Exactly! ABL is not likely to be a subject to mass exodus in near future. Out of platforms I use, ABL is the most stable in 10%+ club. Time will tell but I don't think trusting ABL's DD or the above thinking is wise. I do like ABL and have been in way before the recent surge but just remember: - Everyone was saying the exact same thing about MT before that blew up. - One bad default anywhere on the platform and that sentiment will evaporate in an instant. - SM Premiums have been dropping over recent weeks. - Assets are not sufficient to cover this loan if the business goes under (you'd be looking at losing at least 60% of capital based on worst case valuation) and as we have seen elsewhere doing DD like reading accounts and going on CH is of limited value if a director is adept at playing games. Personally I'm with registerme on this one. I'll admit I'm not being scientific or rational about this but care homes have been on my avoid list ever since my early days on FC. Care homes, lawyers, architects... all sound businesses on paper that just went *poof* in the night. I'm sitting out based purely on that but good luck to all who invest. I'm surprised to see investors lending on this based on the strength of the SM. Skittish investors have seen bids plummet to 75% off the back of a direct debit delayed by a day or two or a minor ccj and it's possible a sizeable default could cause contagion for other investors. Defaults will happen in 20%+ SME lending but could be amplified on abl given connectedness - check out the registered address and former director on DDC and our owner’s other insolvencies (for example from where he picked up these 2 care homes 😉 ). Care homes are acknowledged to be a tough market with government cut backs and practically no local re-sale market recently in this area (certainly as going concerns) and this seems to be a bet on there being enough people that can afford to pay a couple of grand every month in Middlesbrough privately (I did like the innovation of the ThinkBed contract with the local health authority). We are told a recovery valuation is unlikely (despite our borrower’s previous healthcare group insolvency) but that is exactly what I base my investments on - blender sums up the recovery ltv typically well (and realisable values can quite easily be halved in an auction room taking a chunk out of the 1C). So if abl suspend the SM based on a credit event unknown to lenders where will that leave our day traders? Somewhere without a paddle would be my best guess. Edit: 75k net profits* on 2018 run rate doesn’t leave much headroom with initial finance costs not that far off double(!) the already ‘above MV’ rent of c260k - could make this loan riskiest at the outset, just when the flippers think it safest 😉 . * not a fan of EBIT, I prefer to see finance included - 2.8M based off generic efficient operator model made me laugh as finance starts at more than the fair maintainable profit...Indeed L******** reported losses last year. Edit2 - that said, thanks to abl for their efforts in offering us a new platform sector and at currently c90% pitching their loan limit nigh on perfectly 😊 .
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blender
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Post by blender on Sept 7, 2018 8:55:07 GMT
Yes, I agree with elliotm's evaluation, but I have still taken a bite of this knowing that I am relying on liquidity to reduce risk. I am unlikely to hold this for more than a year. Ablrate have presumably been looking at 107 for some time, since the rainmaker loan is 108, and I guess that the assessment will have required sufficient working capital up front to give the business some time to develop its profitability (though 97% occupancy looks rather optimistic). I regard the security on 108 as diaphanous, but the amount of cash lent provides ample working capital. The first serious loss will hurt the SM. The connectedness of some loans is both a strength and a weakness. With 107 and 108 we do see Ablrate working hard to bring us different opportunities with new stand-alone borrowers, and giving us plenty of information. But we must understand that as the number of such loans increases, there must be some losses. It is the nature of the beast.
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