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Post by mrclondon on Sept 12, 2019 13:14:35 GMT
At an initial glance, this does seem to represent the lower risk, lower rate loans we have been calling for. Just a pity no interest prior to activation (which precludes my participation).
One thing that does look odd though is the 12 month term. This is a revenue generating asset, and whilst we haven't been told the detailed terms of the new lease, typically the rent from the tenant will be due quarterly or monthly. There seems to me no justification in allowing the borrower to accrue more than 6 months worth of interest/fees.
fundingsecure in cases like this you should really be mandating that the rental income is transferred across to yourselves as soon as it is received by the borrower.
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adrian77
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Post by adrian77 on Sept 12, 2019 16:03:21 GMT
damn right they should - this is exactly what my bank would do. I have a friend who has really shaken up the carpet business and made literally millions doing it. Given the current state of the High Street I would not sleep at night if I put money into this one!
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r1200gs
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Post by r1200gs on Sept 12, 2019 16:20:57 GMT
My first thought was is that little slice of terrace really worth £400,000?
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trium
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Post by trium on Sept 12, 2019 16:36:23 GMT
Once again, I see no indication of when the loan will activate. When the first "interest from activation" loan was offered the excuse for delaying interest accrual was that the activation date was known in advance, the loan would close on that date (underwritten if not filled) and so you would know where you stood. I can't recall a loan since where the activation date has been announced in advance and investors have been expected to commit funds free of interest for an unspecified (and potentially extended) period.
Also the minimum investment issue continues to bug me, brought in for particularly large or complex loans (apparently to keep out the riff-raff) but now commonplace. No discernible pattern has emerged as to which loans it will be applied to and in what sum, and it frequently prevents my participation. Perhaps if I had achieved my original target of 100*£100 loans before increasing my lending amount I might have been doing £250/£500 by now, but because of a lack of quality loan flow I've not come close after 18 months on the platform.
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adrian77
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Post by adrian77 on Sept 12, 2019 21:00:33 GMT
Am I being thick yet again - £200K at 20% is £40K pa to buy an asset earning about £24K pa in rent? Maybe this borrower is paying about 10% for the loan but I thought 20% was a typical figure? Even at 10% this is hardly a cash cow unless I am missing something. That said ,at least the asset looks secure as £200K will buy damn all in that area!
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bg
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Post by bg on Sept 12, 2019 21:24:37 GMT
Am I being thick yet again - £200K at 20% is £40K pa to buy an asset earning about £24K pa in rent? It's a bridging loan. It's not a long term proposition. As is clearly stated in the loan information, the exit plan is to refinance onto a long term commercial mortgage. You would think given the amount of loans you have been through you would grasp that FS does bridge loans.
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adrian77
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Post by adrian77 on Sept 13, 2019 9:39:11 GMT
Forum readers will draw their own conclusions from the above
This is still a 12 month loan so what happens if tenants hit trading problems - not that any other retailers have recently hit problems e,g John Lewis. I personally could very easily borrow £200K at way under 8% so but puzzled why a finance director and auditor need to do this.
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Mucho P2P
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Post by Mucho P2P on Sept 13, 2019 10:21:29 GMT
Forum readers will draw their own conclusions from the above This is still a 12 month loan so what happens if tenants hit trading problems - not that any other retailers have recently hit problems e,g John Lewis. I personally could very easily borrow £200K at way under 8% so but puzzled why a finance director and auditor need to do this." why a finance director and auditor need to do this." <-- Who knows the real reason other than the borrower, but so many times I have come across the following excuses, kids went to private schools, the costly divorce, the Maldives holiday each year, undertook other investments recently and am “temporarily” stretched financially……the list is endless.
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bg
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Post by bg on Sept 13, 2019 10:39:40 GMT
Forum readers will draw their own conclusions from the above This is still a 12 month loan so what happens if tenants hit trading problems - not that any other retailers have recently hit problems e,g John Lewis. I personally could very easily borrow £200K at way under 8% so but puzzled why a finance director and auditor need to do this. You seriously want someone to again explain to you what a bridging loan is and why someone may need one? Of course you could say that a tenant of any commercial property could hit trading problems. Does that mean money shouldn't be lent against commercial property in case difficulties arise? Not sure what the finance director and auditor comment relates to.
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