stevio
Member of DD Central
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Post by stevio on Feb 17, 2016 14:09:50 GMT
Didn't think I can mention the borrower, so their now 'Car Loan Company'.
Although there is a thread on whether you will invest, I couldn't see obvious thread about what people think of these loans - any thoughts?
Although the upcoming loan mentions 70% LTV of the cars as assets, is it still 50% LTV of the value of the Hire Purchase Agreements on the cars?
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Post by MoneyThing on Feb 17, 2016 14:24:44 GMT
Didn't think I can mention the borrower, so their now 'Car Loan Company'. Although there is a thread on whether you will invest, I couldn't see obvious thread about what people think of these loans - any thoughts? Although the upcoming loan mentions 70% LTV of the cars as assets, is it still 50% LTV of the value of the Hire Purchase Agreements on the cars? Afternoon, Just to make the point that this is a Stocking Facility on the yet unsold cars they have in stock before being sold (via HP agreements). Once they are sold, the cars will come off the stocking facility and replaced with new stock to maintain the £200,000 at 70% LTV. As such, the sold cars will at some point be lent against by ourselves under the HP lending agreement (i.e. under the 80% Retail & 50% LTV outstanding receivables arrangement). Kind regards, Ed
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Post by Butch Cassidy on Feb 17, 2016 14:36:06 GMT
Didn't think I can mention the borrower, so their now 'Car Loan Company'. Although there is a thread on whether you will invest, I couldn't see obvious thread about what people think of these loans - any thoughts? Although the upcoming loan mentions 70% LTV of the cars as assets, is it still 50% LTV of the value of the Hire Purchase Agreements on the cars? Afternoon, Just to make the point that this is a Stocking Facility on the yet unsold cars they have in stock before being sold (via HP agreements). Once they are sold, the cars will come off the stocking facility and replaced with new stock to maintain the £200,000 at 70% LTV. As such, the sold cars will at some point be lent against by ourselves under the HP lending agreement (i.e. under the 80% Retail & 50% LTV outstanding receivables arrangement). Kind regards, Ed I think Ed et al have come up with an innovative & neat way to provide lenders with new loans (with plenty of headroom to grow further) based on specific, hard, non property based assets that are easy to understand, provide a great return & require little managing - yes you can take a view on the non-performance/default risk of the companies &/or platform that stand behind the concept & invest (or not) to a level that meets your own opinion & risk appetite but in my book this ticks all the boxes that most investors are looking for & will be a main driver behind the continued & future success of MT - Well done all concerned & keep it up 
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stevio
Member of DD Central
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Post by stevio on Feb 17, 2016 15:51:21 GMT
Didn't think I can mention the borrower, so their now 'Car Loan Company'. Although there is a thread on whether you will invest, I couldn't see obvious thread about what people think of these loans - any thoughts? Although the upcoming loan mentions 70% LTV of the cars as assets, is it still 50% LTV of the value of the Hire Purchase Agreements on the cars? Afternoon, Just to make the point that this is a Stocking Facility on the yet unsold cars they have in stock before being sold (via HP agreements). Once they are sold, the cars will come off the stocking facility and replaced with new stock to maintain the £200,000 at 70% LTV. As such, the sold cars will at some point be lent against by ourselves under the HP lending agreement (i.e. under the 80% Retail & 50% LTV outstanding receivables arrangement). Kind regards, Ed Ok, so this is just the car's themselves as asset's and not the HP agreements As they are 2nd hand cars with depreciating values, will their be a constant maintenance of the 70% LTV? May I ask why they need to stock pile? They will be paying interest on stock which is not earning them any money. Could they not easily source stock as and when needed?
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Post by MoneyThing on Feb 17, 2016 15:56:26 GMT
Afternoon, Just to make the point that this is a Stocking Facility on the yet unsold cars they have in stock before being sold (via HP agreements). Once they are sold, the cars will come off the stocking facility and replaced with new stock to maintain the £200,000 at 70% LTV. As such, the sold cars will at some point be lent against by ourselves under the HP lending agreement (i.e. under the 80% Retail & 50% LTV outstanding receivables arrangement). Kind regards, Ed Ok, so this is just the car's themselves as asset's and not the HP agreements As they are 2nd hand cars with depreciating values, will their be a constant maintenance of the 70% LTV? May I ask why they need to stock pile? They will be paying interest on stock which is not earning them any money. Could they not easily source stock as and when needed? Afternoon, The schedule will be updated monthly to maintain the 70% LTV. They have a large unit where they retail their cars to individuals which then go under their HP agreements. For their market, they stock the cars (fit the tracking and immobilisers), and the purchasers choose from their stock (rather than source to order). Kind regards, Ed
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Post by MoneyThing on Feb 17, 2016 15:59:42 GMT
Ok, so this is just the car's themselves as asset's and not the HP agreements As they are 2nd hand cars with depreciating values, will their be a constant maintenance of the 70% LTV? May I ask why they need to stock pile? They will be paying interest on stock which is not earning them any money. Could they not easily source stock as and when needed? Afternoon, This facility is simply against the assets themselves. The schedule will be updated monthly to maintain the 70% LTV. They have a large unit where they retail their cars to individuals which then go under their HP agreements. For their market, they stock the cars (fit the tracking and immobilisers), and the purchasers choose from their stock (rather than source to order). The maintain stock levels to meet their growing demand from purchasers/borrowers. Kind regards, Ed
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Post by bracknellboy on Feb 17, 2016 17:16:24 GMT
Understand that the schedule will be updated monthly as vehicles move in and out, but some may stick around. Will the monthly update include revaluation of all vehicles in the portfolio ?
I also have a bit of concern over the LTV/valuation basis in the event that the borrower did go pop. It seems highly dubious that MT would be able to shift this stock @ retail value if the borrower was no longer a going concern. Is it just me that thinks that in reality 70% LTV @ retail value doesn't give very much headroom if any in the event of a downturn and loss of the borrower's facilities to shift the stock, leading to a wholesale / auction off-load.
The HP backed agreements are a bit of a different kettle of fish.
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webwiz
Posts: 1,133
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Post by webwiz on Feb 17, 2016 17:24:17 GMT
Understand that the schedule will be updated monthly as vehicles move in and out, but some may stick around. Will the monthly update include revaluation of all vehicles in the portfolio ? The risk I see is that the desirable cars will be bought and gradually the stock will fill up with the "dogs" that nobody wants.
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Post by MoneyThing on Feb 17, 2016 18:32:42 GMT
Evening,
I can confirm that the stock will be revalued each month. (I.e. assuming no cars are sold in a month, the overall valuation will decrease and new cars would need to be added to retain the 70% LTV).
You will also notice that the cars are at least a couple of years old and thus the highest rate of depreciation is already knocked off. If they were to go pop or they were unable to pay the monthly interest (which would trigger us being able to step in), we would be able to quickly take possession of the vehicles and sell them. Therefore at 70% LTV and perhaps a maximum of a month or two's depreciation on the stock (i.e. a few percent), we would still be well protected (even taking into account recovery and disposal costs).
I would also say that it would not be in their interest (like any other used car dealer), to retain stock that is unlikely to sell as it would only narrow the choice for their customers as well as an unnecessary extra cost with regards to paying finance against.
Kind regards,
Ed
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scraggs
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Post by scraggs on Feb 17, 2016 20:48:03 GMT
Hi Ed
I would be interested to know where 70% of retail value compares to the trade value of these cars, there will be quite a bit involved to move these cars on, do you have a plan if they were to go pear shaped, ie: a dealer prepared to take the lot ?
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Post by MoneyThing on Feb 17, 2016 21:11:38 GMT
Evening, I can confirm that the stock will be revalued each month. (I.e. assuming no cars are sold in a month, the overall valuation will decrease and new cars would need to be added to retain the 70% LTV). You will also notice that the cars are at least a couple of years old and thus the highest rate of depreciation is already knocked off. If they were to go pop or they were unable to pay the monthly interest (which would trigger us being able to step in), we would be able to quickly take possession of the vehicles and sell them. Therefore at 70% LTV and perhaps a maximum of a month or two's depreciation on the stock (i.e. a few percent), we would still be well protected (even taking into account recovery and disposal costs). I would also say that it would not be in their interest (like any other used car dealer), to retain stock that is unlikely to sell as it would only narrow the choice for their customers as well as an unnecessary extra cost with regards to paying finance against. Kind regards, Ed I would also just like to highlight that in addition, we have a corporate guarantee for the stocking facility from the parent company which is the entity that writes all the HP agreements.
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registerme
Member of DD Central
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Post by registerme on Feb 17, 2016 21:13:29 GMT
Is that a good thing?
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ben
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Post by ben on Feb 17, 2016 21:30:35 GMT
also would it be possible to put what type of cars they are i.e so we can have a guess if age/valuation is in right ball park
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Investboy
Member of DD Central
Trying to recover from P2P revolution
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Post by Investboy on Feb 18, 2016 12:00:17 GMT
... If they were to go pop or they were unable to pay the monthly interest (which would trigger us being able to step in), we would be able to quickly take possession of the vehicles and sell them.... Why? Would MT do a better job than them with years of experience in selling those cars? That would generate costs and for MT to sell them quickly would need to give a hefty discount Why not just have some sort of agreement in place that for lingering cars or in the event of default risk they immediately apply 20% discount, and then within week 30% or something. Then they will do what they do best and MT does not have to deal with all the overheads of transporting, advertising and selling those cars. Correct me if I'm talking nonsense ....
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webwiz
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Post by webwiz on Feb 18, 2016 12:34:59 GMT
... If they were to go pop or they were unable to pay the monthly interest (which would trigger us being able to step in), we would be able to quickly take possession of the vehicles and sell them.... Why? Would MT do a better job than them with years of experience in selling those cars? That would generate costs and for MT to sell them quickly would need to give a hefty discount Why not just have some sort of agreement in place that for lingering cars or in the event of default risk they immediately apply 20% discount, and then within week 30% or something. Then they will do what they do best and MT does not have to deal with all the overheads of transporting, advertising and selling those cars. Correct me if I'm talking nonsense .... I think he is referring to the unlikely and unfortunate scenario where they have gone bust.
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