Post by mrclondon on Nov 10, 2013 19:06:50 GMT
Some of us spend a fair bit of time on due-diligence before first bidding on a loan which may well then run for 3 or even 5 years. Unless a late payment or further loan requests occur, I suspect most us don't do any repeat due-diligence to see whether we should prune our holdings or even top up via the secondary market.
I was interested to read in a recent email from FK:
"As I'm sure you already know, all potential loans with FundingKnight are evaluated by our lending team using our own credit evaluation process which we designed specifically for smaller companies. Our credit model drew from a combination of years of research, consultancy input from experts in their field and our own commercial experience. It is represented on each loan as a 3, 4 or 5 shield rating. Our top rating is 5 shields.
We have always felt strongly that more importance should be attached to the direction a company is going than to its past history. We therefore look carefully at current financial information provided by our borrowers and this gives us a good indication as to whether each borrower is improving its financial position. In order to provide a fuller picture for lenders, we also publish external credit ratings in the loan information descriptions.
Based on our first £2m of lending, spread across over 40 loans, we are glad to report that the external credit agency that we use appears to share our view that we are lending to businesses which are strengthening financially. We are very pleased to see that the average external credit scores of businesses which have raised money through our platform have improved by almost 20% since the loans were listed. "
(my emphasis)
A positive and very welcome message, for sure, but perhaps FK could do a semi-regular spotlight on one of their borrowers. I know FC do this, but with the volume of borrowers they have the message does get diluted somewhat. With FK's smaller book, an update on selected borrowers could give the secondary market a boost (which is hampered IMO by poor software design at present). As an example, I bid on StreetS**** Ltd (outdoor advertising) at the outset but was a little sceptical as to whether this relatively young company could actually grow its business. I was recently pondering whether to top up on the secondary market, so googled the company, to discover they had recently won a number of new clients including JustEat and ZipCars. I would also be very interested in an update on S**** Archive ******* Ltd given the owner was an active participant on the old forum.
I was interested to read in a recent email from FK:
"As I'm sure you already know, all potential loans with FundingKnight are evaluated by our lending team using our own credit evaluation process which we designed specifically for smaller companies. Our credit model drew from a combination of years of research, consultancy input from experts in their field and our own commercial experience. It is represented on each loan as a 3, 4 or 5 shield rating. Our top rating is 5 shields.
We have always felt strongly that more importance should be attached to the direction a company is going than to its past history. We therefore look carefully at current financial information provided by our borrowers and this gives us a good indication as to whether each borrower is improving its financial position. In order to provide a fuller picture for lenders, we also publish external credit ratings in the loan information descriptions.
Based on our first £2m of lending, spread across over 40 loans, we are glad to report that the external credit agency that we use appears to share our view that we are lending to businesses which are strengthening financially. We are very pleased to see that the average external credit scores of businesses which have raised money through our platform have improved by almost 20% since the loans were listed. "
(my emphasis)
A positive and very welcome message, for sure, but perhaps FK could do a semi-regular spotlight on one of their borrowers. I know FC do this, but with the volume of borrowers they have the message does get diluted somewhat. With FK's smaller book, an update on selected borrowers could give the secondary market a boost (which is hampered IMO by poor software design at present). As an example, I bid on StreetS**** Ltd (outdoor advertising) at the outset but was a little sceptical as to whether this relatively young company could actually grow its business. I was recently pondering whether to top up on the secondary market, so googled the company, to discover they had recently won a number of new clients including JustEat and ZipCars. I would also be very interested in an update on S**** Archive ******* Ltd given the owner was an active participant on the old forum.