registerme
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Post by registerme on Aug 11, 2016 18:52:53 GMT
"The loan being requested is for a minimum of £250k and a maximum of £500k.... Security is against 10 units of a £600k value....". So, putting the PG and cross-company guarantee to one side, effectively, an LTV of 41.6% for the minimum draw down, and 83.3% if the maximum draw down occurs. That's quite a difference. ablrate, ablrateandy, is there any chance of obtaining increased security for larger draw down steps? For instance, assuming they have more units available, something like:- 250k - 10 units 300k - 11 units 350k - 12 units ... 500k - 20 units
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ptr120
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Post by ptr120 on Aug 12, 2016 6:18:06 GMT
"The loan being requested is for a minimum of £250k and a maximum of £500k.... Security is against 10 units of a £600k value....". So, putting the PG and cross-company guarantee to one side, effectively, an LTV of 41.6% for the minimum draw down, and 83.3% if the maximum draw down occurs. That's quite a difference. ablrate , ablrateandy , is there any chance of obtaining increased security for larger draw down steps? For instance, assuming they have more units available, something like:- 250k - 10 units 300k - 11 units 350k - 12 units ... 500k - 20 units I like amoratising loans so will probably have some of this. However, the variable LTV isn't ideal. On the other portacabin loan I took added comfort that the portacabins I was lending against were leased out on a profitable contract - for this loan I have no idea if the security will be leased out, to who, and if it is done at a profit which covers this borrowing. I also wonder how the LTV for the portacabins is calculated? Is it based on manufacturing cost? average sale price? Finally, we've seen on other loans that shipping containers can be hard to locate - portacabins are by their nature portable - can our security have some sort of tracking, or there be a covenant which requires the borrower to inform us of where they are at all times? ablrateandy ablrate answers would be appreciated.
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Post by ablrate on Aug 12, 2016 7:53:34 GMT
"The loan being requested is for a minimum of £250k and a maximum of £500k.... Security is against 10 units of a £600k value....". So, putting the PG and cross-company guarantee to one side, effectively, an LTV of 41.6% for the minimum draw down, and 83.3% if the maximum draw down occurs. That's quite a difference. ablrate , ablrateandy , is there any chance of obtaining increased security for larger draw down steps? For instance, assuming they have more units available, something like:- 250k - 10 units 300k - 11 units 350k - 12 units ... 500k - 20 units I like amoratising loans so will probably have some of this. However, the variable LTV isn't ideal. On the other portacabin loan I took added comfort that the portacabins I was lending against were leased out on a profitable contract - for this loan I have no idea if the security will be leased out, to who, and if it is done at a profit which covers this borrowing. I also wonder how the LTV for the portacabins is calculated? Is it based on manufacturing cost? average sale price? Finally, we've seen on other loans that shipping containers can be hard to locate - portacabins are by their nature portable - can our security have some sort of tracking, or there be a covenant which requires the borrower to inform us of where they are at all times? ablrateandy ablrate answers would be appreciated. Thanks guys We will make the loan live at 9 but will take these comments on board and have a chat with the borrower. Have a look at all the docs when its up. Ptr120 - These cabins are fixed as an office block at a Polo club (the horsey one not the minty one). The covenants in the docs do have a several requirements for the borrower to notify us of any movement etc. Regards Ablrate
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ptr120
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Post by ptr120 on Aug 12, 2016 8:52:37 GMT
Thanks ablrateandy. My comments on what I've read so far: - Accounts and valuations are a little old - can we have something more up to date?
- Does the director offering the PG not have other assets such as cars, cash & other investments? Spanish property mught be difficult to dispose of in the event of default
- The polo club where the portacabins are in use would appear to have the same ownership and would appear to be in debt to the parent company (ie, not operating at a profit). Is that likely to change and how does it service the rental of these units? Are they leased at a market value, or on a peppercorn basis?
- According to the credit check, chredit safe have given a credit limit 260k, and a contract limit 390k. Why would we be proposing to lend more than those figures to the borrower.
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Post by ablrate on Aug 12, 2016 9:03:23 GMT
Thanks ablrateandy . My comments on what I've read so far: - Accounts and valuations are a little old - can we have something more up to date?
- Does the director offering the PG not have other assets such as cars, cash & other investments? Spanish property mught be difficult to dispose of in the event of default
- The polo club where the portacabins are in use would appear to have the same ownership and would appear to be in debt to the parent company (ie, not operating at a profit). Is that likely to change and how does it service the rental of these units? Are they leased at a market value, or on a peppercorn basis?
- According to the credit check, chredit safe have given a credit limit 260k, and a contract limit 390k. Why would we be proposing to lend more than those figures to the borrower.
Hi I will pass these onto the borrower, but for our part: The PG has a number of assets (including shares in all of the companies he owns), however, we felt that the property was a better indication rather than cars, boats etc. On the CS report - they have their own algorithms to determine credit - with the PG and cross guarantees from the other companies and on the basis of it amortising we feel that the level of lending would be appropriate and serviceable. All with the usual caveats and please read the risk warnings on the site and the docs. Regards Ablrate
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registerme
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Post by registerme on Aug 12, 2016 9:56:23 GMT
Have a look at all the docs when its up. and.... "Ablrate always aim to maximise the security for lenders" (page 4 from the loan proposal). I like the company, I like the loan in principle, I like ablrate, but I don't like PGs, and the cross-company guarantee, whilst I'm sure it will be fine, is hard to value given the number of loans relying on it. With better security I would definitely invest in this, as it is I'm in two minds about it...
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david42
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Post by david42 on Aug 12, 2016 9:57:57 GMT
Thank you, ablrate for bringing us this interesting opportunity. I had intended to invest in this attractive 13% 3 year amortizing loan backed by a good set of security, but initial investigation leaves concerns that would need to be addressed before I could invest: 1) building security - how are these modular units building valued? These multi storey buildings will not be cheap to relocate so unless you tell me otherwise I assume their value depends on them being used at the polo club. 2) polo club security - what gives you confidence that the polo club can service the rent for the next three years? The polo club accounts show net worth reducing rapidly each year, down to -£530k in 2015. So maybe I need to rely on the PG as he sounds like a dynamic entrepreneur with many assets. 3) PG security - a company check on the personal guarantor shows net worth of minus £2.2M. Can you explain why the companycheck.co.uk view differs so significantly from the credit report and asset statement on the Ablrate site? Concern 3 is not relevant as explained by wysiati here: p2pindependentforum.com/post/134112/thread
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Post by ablrate on Aug 12, 2016 11:56:52 GMT
Thank you, ablrate for bringing us this interesting opportunity. I had intended to invest in this attractive 13% 3 year amortizing loan backed by a good set of security, but initial investigation leaves concerns that would need to be addressed before I could invest: 1) building security - how are these modular units building valued? These multi storey buildings will not be cheap to relocate so unless you tell me otherwise I assume their value depends on them being used at the polo club. 2) polo club security - what gives you confidence that the polo club can service the rent for the next three years? The polo club accounts show net worth reducing rapidly each year, down to -£530k in 2015. So maybe I need to rely on the PG as he sounds like a dynamic entrepreneur with many assets. 3) PG security - a company check on the personal guarantor shows net worth of -£2.2M. Can you explain why the companycheck.co.uk view differs so significantly from the credit report and asset statement on the Ablrate site? Hi Have passed these on and will revert with responses from the borrower. Regards Ablrate
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Post by loanstar on Aug 15, 2016 16:57:50 GMT
I have to be careful here not to provide too much detail. But there is a BBC inside out article about our borrow and this polo club. It would seem that polo is his hobby and the club could be described as a "vanity project. Not a term I like, but it would explain how the club can afford the loan.
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stevio
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Post by stevio on Aug 16, 2016 9:30:26 GMT
Thank you, ablrate for bringing us this interesting opportunity. I had intended to invest in this attractive 13% 3 year amortizing loan backed by a good set of security, but initial investigation leaves concerns that would need to be addressed before I could invest: 1) building security - how are these modular units building valued? These multi storey buildings will not be cheap to relocate so unless you tell me otherwise I assume their value depends on them being used at the polo club. 2) polo club security - what gives you confidence that the polo club can service the rent for the next three years? The polo club accounts show net worth reducing rapidly each year, down to -£530k in 2015. So maybe I need to rely on the PG as he sounds like a dynamic entrepreneur with many assets. 3) PG security - a company check on the personal guarantor shows net worth of -£2.2M. Can you explain why the companycheck.co.uk view differs so significantly from the credit report and asset statement on the Ablrate site? Hi Have passed these on and will revert with responses from the borrower. Regards Ablrate The large variation in LTV (40-80%) is really off putting for this loan - it could be great security at 40% or really bad at 80% Can anything be done? Maybe would have been better listed as small tranches against their own separate modules so LTV is easier to predict
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SteveT
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Post by SteveT on Aug 16, 2016 9:45:04 GMT
I'm not convinced the buildings are the main aspect of the security to focus on with this loan. Without a formal 3rd party valuation of the modular units, who's to know what they'd really be worth if they ever had to be auctioned and removed from their current location. The profitability of the companies involved and the net worth of ultimate guarantor is probably the bigger draw, with a bit of hard asset security as backstop.
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stevio
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Post by stevio on Aug 16, 2016 11:37:28 GMT
I'm not convinced the buildings are the main aspect of the security to focus on with this loan. Without a formal 3rd party valuation of the modular units, who's to know what they'd really be worth if they ever had to be auctioned and removed from their current location. The profitability of the companies involved and the net worth of ultimate guarantor is probably the bigger draw, with a bit of hard asset security as backstop. Agree, but think people prefer hard assets that can be physically reclaimed than guarantees that traditionally have been harder to enforce
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blender
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Post by blender on Aug 16, 2016 12:48:34 GMT
Yes, the traditional pound of flesh is best avoided. Physical, trackable, saleable, professionally valued assets as security are what I look for from Ablrate (and usually get).
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Post by loanstar on Aug 16, 2016 22:01:35 GMT
I would be interested to know a little more about what our money is to be used for. One use stated is "This along with investing funds into the sites and land the company owns which will increase the value through planning gain and development." I wonder if this could be land "north of the boarder"? We will be paid 13% so I can only assume our borrower has deals set up that will exceed this rate of return. I have no problem with is, but if my money is to be risked in this venture I would like a little more detail.
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wysiati
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Post by wysiati on Aug 17, 2016 6:30:22 GMT
... 3) PG security - a company check on the personal guarantor shows net worth of -£2.2M. Can you explain why the companycheck.co.uk view differs so significantly from the credit report and asset statement on the Ablrate site? Companycheck does not give a figure for the personal net worth of the guarantor. The Companycheck figure quoted is the aggregate tangible net asset value (using latest published figures) of the companies for which the guarantor currently holds an appointment, which is not the same thing. Companycheck is linked to Creditsafe. If you look at the credit report on Companycheck for the specfic company detailed in the Creditsafe report provided in the supporting documents for this Ablrate loan the details were the same.
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