madpierre
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Post by madpierre on Nov 15, 2015 10:08:10 GMT
b) has my vote, it makes it worthwhile investing immediately the loan is available. Certainly work well on Ablrate From MT's point of view I don't see the point of having cash back at such a low value, good for investors I know, but surely MT wants to encourage large investments and would be better off offering CB on loans of £5-10k plus (As Funding Secure) Instant returns is a great idea, certainly encourages early investment and gets my vote every time, but where the outcome is uncertain it could prove costly if the loan was cancelled, so I can understand MT holding off on that one. Pity.
As for cashback, paulgul is spot on. Those who would invest up to around £500 would do so anyway, regardless of cash back, it's the bigger hitters that are needed for this loan and a stepped cash back would in my view be more appropriate.
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Post by MoneyThing on Nov 15, 2015 10:15:51 GMT
Before considering all options, can I just ask with respect to the instant returns option - for those platforms that offer it, what happens if the loan doesn't fill? I have read the description of how it works on another platform but couldn't ascertain whether this is still paid out in the event the loan does not drawdown. Thank you.
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SteveT
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Post by SteveT on Nov 15, 2015 10:21:41 GMT
Before considering all options, can I just ask with respect to the instant returns option - for those platforms that offer it, what happens if the loan doesn't fill? I have read the description of how it works on another platform but couldn't ascertain whether this is still paid out in the event the loan does not drawdown. Thank you. Yes, on Ablrate at least it is paid out by the platform even if a loan does not complete (as happened once on a very large loan)
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agent69
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Post by agent69 on Nov 15, 2015 10:39:04 GMT
MT's best bet is to get some disillusioned TC investors interested. Some of them have very deep pockets. And with the Bloom loans having all repaid early a few days ago, many TC investors will have their deep pockets full of cash looking for a home.
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ablender
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Post by ablender on Nov 15, 2015 10:57:51 GMT
b) has my vote, it makes it worthwhile investing immediately the loan is available. Certainly work well on Ablrate From MT's point of view I don't see the point of having cash back at such a low value, good for investors I know, but surely MT wants to encourage large investments and would be better off offering CB on loans of £5-10k plus (As Funding Secure) Instant returns is a great idea, certainly encourages early investment and gets my vote every time, but where the outcome is uncertain it could prove costly if the loan was cancelled, so I can understand MT holding off on that one. Pity.
As for cashback, paulgul is spot on. Those who would invest up to around £500 would do so anyway, regardless of cash back, it's the bigger hitters that are needed for this loan and a stepped cash back would in my view be more appropriate.
People like me with limited funds might bid less than £500, but it will make a difference on the amount I am ready to bid. With a cash back that I can get I can double my bid. I do not see why only large amounts should be rewarded. Anyone who has lots of cash to lend will lend a lot anyway.
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stevio
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Post by stevio on Nov 15, 2015 10:59:52 GMT
Before considering all options, can I just ask with respect to the instant returns option - for those platforms that offer it, what happens if the loan doesn't fill? I have read the description of how it works on another platform but couldn't ascertain whether this is still paid out in the event the loan does not drawdown. Thank you. Yes, on Ablrate at least it is paid out by the platform even if a loan does not complete (as happened once on a very large loan) So £2m x ((1%/4.5)x2) = £8,889 max and more likely around £4k or 0.2% If your purpose is to fill the loan quickly, then maybe offer increased rates for say the first 330k who invest with reducing rates after eg First 330k = 2%, next 330k = 1.5%, last 330k = 1% (not quite 2m I know, but you get the idea)
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Investor
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Post by Investor on Nov 15, 2015 11:03:33 GMT
Before considering all options, can I just ask with respect to the instant returns option - for those platforms that offer it, what happens if the loan doesn't fill? I have read the description of how it works on another platform but couldn't ascertain whether this is still paid out in the event the loan does not drawdown. Thank you. Yes, on Ablrate at least it is paid out by the platform even if a loan does not complete (as happened once on a very large loan) Just to confirm this is the same at SS, who commit to paying interest from date of receipt even should a loan fail to launch. In one case because they pulled a loan out even after filling.
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Post by bluechip on Nov 15, 2015 11:14:10 GMT
In my opinion scaling the cash back would work brilliantly, but I think doing it based on time is best for everyone. 2% now, 1.5% the week after 1% the week after that. This way all investors will benefit (not just the big hitters) and the loan will fill much quicker, of course other websites increase the CB on the amount invested, but I don't think that is necessary needed here. You need to show people that there is appetite for the loan and create a race, especially as you have a 2nd tranche coming out which allows those that can't move money quickly to do so - everyone can win.
To give you an idea of how my mind worked regarding this loan, (which could be helpful to the operators of MT). I have recently joined MT, but invest in about 7 P-P's. I have put as much money as I am comfortable with in the other ones, so was looking for another place to put my money rather than standard banks. I had £500 sitting in my MT account as I wasn't quick enough with a loan I wanted, so when I noticed this loan come up I put my £500 into it without reading, I didn't have much time to read the blurb at the time I just wanted a home for my £500. Later that day I transferred £1k from a low interest account I have and thought I'd add a bit more today when I have more time.
In all honesty I only just read about the 1.5% CB, which was a pleasant surprise and enticed me to put more money in a few moments ago. I have just transferred another £5k over thinking I will capitalise, but I was concerned the funds committed figure hasn't moved much since committing my initial £500. I jumped on here to see what I am missing and I am now hesitant to invest further at this stage, as there is no benefit in me doing so. If there was a further incentive for me to invest early I would have that £5k committed and in fairness I would probably make more of an effort to move other money around to put more into this loan now. However there is no incentive to invest very early, I may as well wait to see what happens with this and invest in the 2nd tranche when I still get my 1.5% CB and a much clearer idea of whether the loan will be a success.
I want to support MT and the loan and would probably go up to £25k if the right incentives were in place. But as it happens I only have 10% of what I would be prepared to invest actually committed. Everyone has their own methods and systems, but if there was any sort of incentive to invest now over say 2 weeks or 4 weeks time, my money would be committed now. You need a lot of people with deeper pockets than I to get involved and I would imagine many are less "reckless" than myself and probably won't even have that initial sum committed at this stage, why would they?
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madpierre
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Post by madpierre on Nov 15, 2015 11:19:38 GMT
Instant returns is a great idea, certainly encourages early investment and gets my vote every time, but where the outcome is uncertain it could prove costly if the loan was cancelled, so I can understand MT holding off on that one. Pity.
As for cashback, paulgul is spot on. Those who would invest up to around £500 would do so anyway, regardless of cash back, it's the bigger hitters that are needed for this loan and a stepped cash back would in my view be more appropriate.
People like me with limited funds might bid less than £500, but it will make a difference on the amount I am ready to bid. With a cash back that I can get I can double my bid. I do not see why only large amounts should be rewarded. Anyone who has lots of cash to lend will lend a lot anyway. Point taken and appreciated
However even a few hundred small investors adding an extra hundred pounds or so only adds a few tens of thousands. But a few big investors tempted away from putting £100,000 into an alternative loan on another platform makes a lot more difference
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Investor
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Post by Investor on Nov 15, 2015 11:20:52 GMT
Instant returns is a great idea, certainly encourages early investment and gets my vote every time, but where the outcome is uncertain it could prove costly if the loan was cancelled, so I can understand MT holding off on that one. Pity.
As for cashback, paulgul is spot on. Those who would invest up to around £500 would do so anyway, regardless of cash back, it's the bigger hitters that are needed for this loan and a stepped cash back would in my view be more appropriate.
People like me with limited funds might bid less than £500, but it will make a difference on the amount I am ready to bid. With a cash back that I can get I can double my bid. I do not see why only large amounts should be rewarded. Anyone who has lots of cash to lend will lend a lot anyway. Think you may find your analysis, in particular the last sentence of this, to be slightly flawed ablender. Ed, there is currently a lot of cash on alternative platforms due to be released over the next two months. The platforms I am thinking of also have very liquid SM's and therefore give the opportunity for larger investors to very easily move money from those platforms to MT, should they deem the offer to be advantageous. I think this may be a bit of a watershed moment for MT. As you suggested you might not yet have achieved the 'critical mass' for a loan of this volume however you might consider that ensuring this goes ahead should be priorotised over other influences, just for reasons of platform momentum. It may well be with a stepped CB offer, which exceeds some offered by other platforms historically the chances of this loan completing will greatly increase. Feel free to PM me if you need any historical case studies on this.
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ilmoro
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Post by ilmoro on Nov 15, 2015 11:29:46 GMT
Instant returns is a great idea, certainly encourages early investment and gets my vote every time, but where the outcome is uncertain it could prove costly if the loan was cancelled, so I can understand MT holding off on that one. Pity.
As for cashback, paulgul is spot on. Those who would invest up to around £500 would do so anyway, regardless of cash back, it's the bigger hitters that are needed for this loan and a stepped cash back would in my view be more appropriate.
People like me with limited funds might bid less than £500, but it will make a difference on the amount I am ready to bid. With a cash back that I can get I can double my bid. I do not see why only large amounts should be rewarded. Anyone who has lots of cash to lend will lend a lot anyway. Much the same here. Without the cashback I probably wouldnt put as much in. And NO to emails for every payment, my inbox is cluttered enough as it is (self inflicted)
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gt94sss2
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Post by gt94sss2 on Nov 15, 2015 11:35:52 GMT
I think everyone is different. I can and have in the past invested larger sums with MT but would still prefer it if all investors were offered the same rate of cash back (subject to a minimum investment level as necessary) as I think its fundamentally fairer for investors rather than differing %'s based on when invested or how much..
But yes, instant returns [ideally with cashback] is more attractive than pre-funding..
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ilmoro
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Post by ilmoro on Nov 15, 2015 12:01:24 GMT
People like me with limited funds might bid less than £500, but it will make a difference on the amount I am ready to bid. With a cash back that I can get I can double my bid. I do not see why only large amounts should be rewarded. Anyone who has lots of cash to lend will lend a lot anyway. Point taken and appreciated
However even a few hundred small investors adding an extra hundred pounds or so only adds a few tens of thousands. But a few big investors tempted away from putting £100,000 into an alternative loan on another platform makes a lot more difference
Assuming they can find one All a question of finding the right balance. While you need to bring in the big guys you dont want to alienate the little guys too much as youll still need them for the smaller loans which the big guys are less likely to find worth their while. Also potentially the risk for the little guy is higher as a increased sum is likely to be a higher percentage of their total exposure/overall assets particularly without an SM. Personally £500 floor for CB seemed fair.
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Post by pepperpot on Nov 15, 2015 12:26:39 GMT
Point taken and appreciated
However even a few hundred small investors adding an extra hundred pounds or so only adds a few tens of thousands. But a few big investors tempted away from putting £100,000 into an alternative loan on another platform makes a lot more difference
Assuming they can find one All a question of finding the right balance. While you need to bring in the big guys you dont want to alienate the little guys too much as youll still need them for the smaller loans which the big guys are less likely to find worth their while. Also potentially the risk for the little guy is higher as a increased sum is likely to be a higher percentage of their total exposure/overall assets particularly without an SM. Personally £500 floor for CB seemed fair. Agreed. One thing that really ticked off the smaller investors on SS was the infinitely stepped cb (0% for £0, up to 3% for £300k) So that even £25k only attracted a 0.25% bonus (iirc). Seem to remember peanuts were discussed quite widely as being unaffordable and jealousy pointed at the £300k investor(s?). It did however work to bring in the large amounts needed at the time but the fact it hasn't been repeated says something. I'm happy with either the pre-funding or instant returns models. Both are preferable and work better than a flat cashback offer. Pre-funding pledges might be easier to implement (?) but instant returns allows freedom of when to invest dependent on personal cash flow, rather than having to react to semi-automatic pledge(s).
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Post by emoney on Nov 15, 2015 14:32:35 GMT
This is an outstanding and highly educational thread, at www.emoneyunion.com/marketplace/ we have been plugging away with a recently listed 1 Year bridging loan for the last couple of days; we have considered cashback etc and we have not provided any further incentives as the platform is only taking a net interest margin of 0.25% per month, such is the quality of the borrower and residential security. We have to all consider, even on this forum, that written correspondence is clear, fair and not miss-leading. With the FCA looking at Financial Promotions of Peer to Peer platforms in great detail, great care needs to be taken by ALL platforms when promoting differing incentives based on how deep peoples pockets are, Treating Customers Fairly can not be taken lightly and it's wonderful to see such articulate engagement on this forum. Good luck MoneyThing with this and our loan, the bridging loan market is a £5BN a year space and ripe for disruption by this forums participants.
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