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Post by freewilly on Nov 14, 2014 16:55:59 GMT
This post concerns the 'Investor Security' statement at the bottom of the 'NEW Friday weekly update' email received today.
I am (and have been for some time) concerned with the current model whereby we lend money to Lendy who then 'lend on' to the borrowers, secured against the various assets. I am still not clear that the proposal of a 'Trust Company' to hold the assets meets the required need or that it adequately protects the 'Investors' in the event (unlikely though it might be) of Lendy's insolvency. I think that before embarking on this course of action we need to seek and see a proper legal opinion about what is needed and exactly what protection it is likely to provide. I would not want to go from one unknown position to another.
I have spoken to both Tim and Liam at SS and they have both seemed willing to put into position any measures that the 'Investors' require in order to feel as protected as possible and without bearing unnecessary risk; I think this is a great starting point to get things right. I do think something has to change in order for me to feel safe to continue investing.
This is my personal opinion.
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Post by savingstream on Nov 14, 2014 17:11:52 GMT
Lendy Ltd has sought professional opinions from solicitors (Clarke Wilmott), accountants (Grant Thornton) & administrators (BDO) in determining the best solution in this matter.
Other P2P platforms offer investor security in much the same way.
Investors are advised to seek independent legal opinion if they are still unsure about this security, once it is in place and documented for investors.
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Post by mogzi on Nov 14, 2014 17:49:37 GMT
AFAIK as long as client account rules are adhered to AND the security trustee company is setup and structured correctly, lenders funds and any assets that they may have a charge on via the security trustee company, are suitably protected should the platform fail.
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mikes1531
Member of DD Central
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Post by mikes1531 on Nov 14, 2014 23:02:49 GMT
Other P2P platforms offer investor security in much the same way. This may work differently for platforms where the loan contracts are between the lenders and the borrowers than it would for SS where Lendy make the loans to the borrowers and we lenders lend our money to Lendy. If the trust fund is set up appropriately, and the security assets are held by the trust for the benefit of we lenders, then perhaps that may provide adequate protection for us -- but that's just my feeling and I have no legal background. I do wonder, though, whether the current setup of lenders lending to Lendy and Lendy lending to borrowers might not be necessary now that boat loans are history simply because, with PBLs, SS now are collecting the money before the loan goes live. As a result, the money is -- I presume -- going straight from the SS Client Account to the borrower, so perhaps the paperwork could be changed to make the loans between the borrowers and the lenders, leaving out Lendy as middleman except insofar as they/SS are entitled to the payment of fees earned for their work arranging and monitoring the loans. It's just a thought, and needs to be considered by someone with more of a legal background than I have.
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Post by sammy on Nov 15, 2014 0:03:30 GMT
This post concerns the 'Investor Security' statement at the bottom of the 'NEW Friday weekly update' email received today. I am (and have been for some time) concerned with the current model whereby we lend money to Lendy who then 'lend on' to the borrowers, secured against the various assets. I am still not clear that the proposal of a 'Trust Company' to hold the assets meets the required need or that it adequately protects the 'Investors' in the event (unlikely though it might be) of Lendy's insolvency. I think that before embarking on this course of action we need to seek and see a proper legal opinion about what is needed and exactly what protection it is likely to provide. I would not want to go from one unknown position to another. I have spoken to both Tim and Liam at SS and they have both seemed willing to put into position any measures that the 'Investors' require in order to feel as protected as possible and without bearing unnecessary risk; I think this is a great starting point to get things right. I do think something has to change in order for me to feel safe to continue investing. This is my personal opinion. I am in agreement with you and have also spoken to them myself. The big issue to me, which SS have not come back with an actual answer is, whether it is a Trust Company or whatever, we lend to Lendy not the individuals. Therefore, unless proved otherwise, if Lendy were to have problems lets say with one particular large borrower and it caused Lendy to go under, my understanding would be that we would all be liable, even though we may not be on that particular risk and we would all have to bear our share of any losses across the board accordingly. Whereas on the other P2P platforms we are only lending to the actual indivuals and not one Company, so we would only be exposed to whoever we lent monies to and not the Company as a whole! This is my opinion and also certain others I am in contact with, until SS can confirm in writing from a qualified body that this is not the case! As far as we are concerned, they were originally seeking advice from BDO, but it appeared that BDO could or would not give SS the answer that they wanted!
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Jan 1, 2015 16:30:29 GMT
I wonder if there is any updated information on this, as I am unable to find any details of asset security for investors on the web site?
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Jan 1, 2015 17:54:22 GMT
I wonder if there is any updated information on this, as I am unable to find any details of asset security for investors on the web site? If we return to the first item that kicked off this thread, it is implied that the directors of Lendy Ltd had given some form of undertaking to look into this matter and get back to us. A month and a half have now passed and I would have thought some progress should have been made. Whilst I am not fully aware as to all the requirements that the FCA demanded in order to become provisionally registered other lenders in this market had to either set up trusts or other financial vehicles to separate the operating company from lenders money. Perhaps Saving Stream is such a vehicle but there is no obvious indication that this is the case.
Time I think for the Lendy directors to make a formal statement on these issues.
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Jan 2, 2015 9:46:28 GMT
So far I only have a small trial investment with this platform, but I would like to start increasing the amount regularly if I can understand the financial situation better than I do now. From what I have been able to find so far, one is lending money to a company with a very short history and little in the way of assets. Hopefully this can be made clear, so that we can be confident that funds loaned through Savingstream are fully secured by the charges over the properties to which they are applied.
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Post by sammy on Jan 2, 2015 10:55:57 GMT
So far I only have a small trial investment with this platform, but I would like to start increasing the amount regularly if I can understand the financial situation better than I do now. From what I have been able to find so far, one is lending money to a company with a very short history and little in the way of assets. Hopefully this can be made clear, so that we can be confident that funds loaned through Savingstream are fully secured by the charges over the properties to which they are applied. You are right James, I have brought up these queries months ago several times, but SS have still not come back with any concrete details at all! Therefore until we have something in writing, I and certian others, are not investing any more monies in SS, until we get some definate answers. SS do reguarly look at this site as you will see they often respond including sometimes on very minor points, yet on this one extremely important issue, they tread very carefully and mostly go very silent on it, as it would appear they are happy to leave it as it is, until more people either complain &/or stop investing in them!
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spyrogyra
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Post by spyrogyra on Jan 2, 2015 11:22:57 GMT
I am on the same opinion as Sammy and Jamesfrance. I have expressed the same concerns - mainly lending to one company. Since then I haven't increased my investment though I wish to. I am pretty sure that SS will get a great influx of capitals if they come with a good solution.
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Post by savingstream on Jan 2, 2015 12:08:00 GMT
So far I only have a small trial investment with this platform, but I would like to start increasing the amount regularly if I can understand the financial situation better than I do now. From what I have been able to find so far, one is lending money to a company with a very short history and little in the way of assets. Hopefully this can be made clear, so that we can be confident that funds loaned through Savingstream are fully secured by the charges over the properties to which they are applied. Hi everyone, Happy New Year! To clarify some queries raised. All loans made with funds invested through the Saving Stream platform are fully secured with legal charges over the associated properties. Saving Stream is a registered trading name of Lendy Ltd. The charge holder is Lendy Ltd, the FCA regulated company. Lendy Ltd has been lending now since October 2012 with a zero bad debt record to date. Statistics for 2014 are nearly £15M lent, with over 1,500 investors signed up, nearly £4M repaid to investors and over £500k earned by investors by way of interest. You will notice if you do a company check that (unlike most P2P platforms) Lendy Ltd has no creditors with a charge against the company. The only debt Saving Stream has is to its investors which is secured against UK property (some boat loans still exist) at a maximum of 70% LTV. (Total loan book stands at £11M of debt secured against £23M of property @ 48% LTV). Saving Stream operates with a minimum of overheads allowing us to pass the majority of the profit made from each loan back to the investor, hence being able to offer the rates of return that we can. Our plans for 2015 are as follows, the setting up of a Trust company, which holds the charges to all assets. This way, if for any reason Lendy Ltd fails, then the assets are held safely to the order of those invested in that asset. We are also going to be conducting a review of the sign in security to ensure it continues to meet relevant security standards.
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spyrogyra
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Post by spyrogyra on Jan 2, 2015 14:00:21 GMT
SS, best wishes for 2015. We can only wait and evaluate the arrangement after being presented. Imo the sooner the better, for both parties.
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Post by masquedefer on Jan 5, 2015 12:58:48 GMT
Possibly a good solution, which for me would provide the necessary reassurance, is as follows:
Lender's monies to be invested directly into a new trust (the TRUST) who will lend the monies directly to individual borrowers with all guarantees, debentures, first/second legal charges, etc. being created for the benefit of the TRUST.
SS/Lendy will have an exclusive management contract with the TRUST (to carry on business as they currently do ad infinitum) and invoice the TRUST for their share of the interest received (6%?).
If SS/Lendy are unable to continue in business for whatever reason, e.g. insolvency, etc.) the TRUST can find a new investment manager to continue the business on behalf of the TRUST.
SS/Lendy will continue to grow their business, make a good profit and attract more investors, based as now, on their overall good performance (including not least their very good due diligence processes for new loan applications).
So easy!
(or am I totally missing something here??)
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spyrogyra
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Post by spyrogyra on Jan 6, 2015 13:43:41 GMT
Where did you get the 6% from? I would imagine this is just an assumption. And a territory we would rather not discuss.
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debeast
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Post by debeast on Jan 22, 2015 13:00:15 GMT
Just a gentle reminder savingstream would love to see the trust fund set up! I would feel safer allocating some more pennies. My pennies have stopped for a while now  thanks /beastie |
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