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Post by MoneyThing on Mar 28, 2016 15:14:53 GMT
Afternoon,
As you will be aware, we currently have two loans (Bolton & AE), which still have availability for lenders to participate. As has been experienced elsewhere as well, there appears to be a temporary situation whereby there is a 'glut' of loans available at the moment.
Up until the last few weeks, we have been growing our lender base organically primarily fostered from this forum. Since there has been a very recent slow down in the rate at which loans have been filling, we have been initiating discussions with some 'BHs', institutional investors & broadening our marketing. These efforts will start to trickle down in due course, however we currently have a large part of our float tied up and we have some more good quality loans needed to fund coming up soon.
As a one off, I was thinking of providing an added incentive and offering a 1% instant CB to lenders available on these two (yet unfilled), loans on the platform. This would be offered to all existing, top-ups and new participants in these loans until such time as they are filled and then the CB credited to lenders accounts once the loans reach 100%.
My question is that if we did offer this, would this stimulate further participation in these loans or have the majority of lenders already had their fill?
Any thoughts would be greatly appreciated.
Kind regards,
Ed
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hendragon
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Post by hendragon on Mar 28, 2016 15:25:43 GMT
would doing this tempt lenders to hold out for further CBs? Perhaps you might be better looking for some form of extra underwriting capacity.
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registerme
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Post by registerme on Mar 28, 2016 15:30:47 GMT
I've hit my per loan cap on those loans, so were I to take up a CB offer to add to my holdings it would be with a view to selling down later. And if everybody else approached it the same way..... Which isn't to say I've hit my MT cap, I haven't .
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woodie
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Post by woodie on Mar 28, 2016 15:31:40 GMT
The potential 5% hit accepted by Broadoak make their loans very popular.
Rather than CB have you considered ringfencing part of your float for something similar.
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Post by MoneyThing on Mar 28, 2016 15:32:29 GMT
would doing this tempt lenders to hold out for further CBs? Perhaps you might be better looking for some form of extra underwriting capacity. That is a potential negative, granted. However I do think this is a temporary situation which will balance out again in due course.
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SteveT
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Post by SteveT on Mar 28, 2016 15:33:11 GMT
It would certainly lead me to raise my investment (selling down the extra later as other loans emerge). SS have used the same technique in the past with good results. I'd suggest making the decision as soon as possible; Ablrate has a large new loan launching tomorrow and it may not be long before SS reach for the CB lever if any of their large pipeline loans launch in the coming days (with a large overhang of existing loans still to work through). [There will be a month's worth of SS interest paid to lenders on Friday so you might attract some of that too ]
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Post by betterthanworking on Mar 28, 2016 15:34:48 GMT
Personally, it would induce me to add several k more. My aim would be to sell down my holding on the SM later. There are other immenent 13% ers on other sites, but CB is worth more than a simple equivalent rate premium, as it is "up front", and is advantageous from a tax angle.
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Post by webbski9 on Mar 28, 2016 15:41:59 GMT
Ed A perfectly good idea.As other commentators have noted,SS have used this offer before..to great effect.
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jonno
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Post by jonno on Mar 28, 2016 15:57:58 GMT
Yes Ed. I'd increase my exposure.
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ianj
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Post by ianj on Mar 28, 2016 16:15:55 GMT
Q: Am I really such an easy touch? Can I be bribed seduced er, persuaded by the logic in the proposal? What did Prunella Scales say in the Tesco ads? Ah yes , "Every little helps!". A: Yes!
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ben
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Post by ben on Mar 28, 2016 16:17:07 GMT
But another downside is if you look at FS a few of there loans have not moved until the bonus has been offered so a few big hitters have been hanging around waiting for that it all depends on what is coming up, if it is a few smaller loans over the next month or so it probably will not matter but if you have a big loan or two in pipeline then I think a few of the bigger hitters will wait to see what happens with regards to bonus
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SteveT
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Post by SteveT on Mar 28, 2016 16:23:10 GMT
But another downside is if you look at FS a few of there loans have not moved until the bonus has been offered so a few big hitters have been hanging around waiting for that it all depends on what is coming up, if it is a few smaller loans over the next month or so it probably will not matter but if you have a big loan or two in pipeline then I think a few of the bigger hitters will wait to see what happens with regards to bonus You can't really compare to what FS do. Their "bonus interest" is only paid (at the end) if loans are held to term and so only appeals to those happy to hold a large stake until redemption / renewal. It seems to work for them but doesn't have the same impact that SS see when they add CB. Also it discriminates against the smaller investors; there is no incentive for someone investing £1k to double / triple / quadruple it when the first bonus interest tier is at £10k
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ilmoro
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Post by ilmoro on Mar 28, 2016 16:25:16 GMT
Id probably increase my investment, though not necessarily new funds, need to reduce my CS exposure but Im sure they'd be some willing takers for bits of portfolio so would pull extra funds into the site.
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paulg
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Post by paulg on Mar 28, 2016 16:34:35 GMT
Cashback would induce me to put a few more k into Bolton, but probably not the AE loan. Car stocking is looking a bit saturated at the moment, which may affect the liquidity of the other AE / stocking loans on the SM. I'm also wondering if inducing more purchases of this AE loan would result in a greater non-rollover of the other AE loans as the renewal dates go through, thereby just kicking the can further down the road.
As an aside Ed - is this Bolton £1m experience going to make the Cardiff student development loan expansion less likely?
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jamesc
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Post by jamesc on Mar 28, 2016 16:40:40 GMT
I would certainly add to my investment. Also as someone has already mentioned the SS end of month interest will be paid shortly. I know you have considered it in the past and decided against it but the way SS do it so everyone knows there is a fat lump of cash coming is a powerful tool for them as i.e they have a glut on a few loans at the moment but they can sit happy knowing the £1million will clear a lot of the glut meaning they can bring another loan. However although I earn no less interest on MT still 1% per month I notice it less as it dribbles in during the month and therefore does not feature in my investment planning, I would urge you to reconsider you may be surprised how much it can help you.
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