nick
Member of DD Central
Posts: 1,055
Likes: 825
|
Post by nick on Mar 13, 2017 16:17:46 GMT
ablrateA couple of quick questions if I may: - Subordination of director's loan: will both the company and the director (in their capacity as a lender) be party to the subordination agreement. I want comfort that in the event of the company not honouring the subordination and repaying the directors loan, we would have recourse to recover the funds directly from the director.
- No personal guarantee: can you confirm that there will be no personal guarantee given by the director or ultimate shareholder(s) (beyond the corporate guarantees disclosed)
- Other credit facilities: I note that the balance sheet shows a small negative petty cash balance. Does the company have a overdraft facility or any other credit facilities beyond the director's loan?
- Missing share capital:a small point, but the company's issued share capital of £100 does seem to be accounted for on the balance sheet - I assume that this basic accounting entry has yet to be made as no formal accounts have yet been prepared to date?
Thanks Nick
|
|
|
Post by ablrate on Mar 14, 2017 9:05:31 GMT
Subordination of director's loan: will both the company and the director (in their capacity as a lender) be party to the subordination agreement. I want comfort that in the event of the company not honouring the subordination and repaying the directors loan, we would have recourse to recover the funds directly from the director.
- Yes, these are long term subordinated loans.
No personal guarantee: can you confirm that there will be no personal guarantee given by the director or ultimate shareholder(s) (beyond the corporate guarantees disclosed)
- The ultimate shareholder has not given a personal guarantee. Put in perspective however, the ultimate shareholder has an 8 figure net worth and a very good track record and would not enter a commitment that he didn't have every intention of seeing through.
Other credit facilities: I note that the balance sheet shows a small negative petty cash balance. Does the company have a overdraft facility or any other credit facilities beyond the director's loan?
-No overdraft or other credit facilities credit card facilities. The petty cash is just that, cash for valeting cars, paying for fuel etc. Missing share capital:a small point, but the company's issued share capital of £100 does seem to be accounted for on the balance sheet - I assume that this basic accounting entry has yet to be made as no formal accounts have yet been prepared to date?- Yes, this will be rectified at year end.
|
|
registerme
Member of DD Central
Posts: 6,209
Likes: 6,015
|
Post by registerme on Mar 14, 2017 10:57:13 GMT
ablrate I owe you an apology, I've just read the note on page 9 of the borrowing proposal that states "**** shareholders have agreed to inject equity of £1,000,000 over the next 4-months into ****. Thus, the strength of **** as a counterparty will approximately double from c. £1,000,000 to c. £2,000,000 once the £1,000,000 equity injection is complete". That goes a long way to alleviating my concerns about the parent company guarantee / cross company guarantees. Presumably ablrate will monitor this and ensure that it happens?
|
|
|
Post by ablrate on Mar 14, 2017 11:17:09 GMT
ablrate I owe you an apology, I've just read the note on page 9 of the borrowing proposal that states "**** shareholders have agreed to inject equity of £1,000,000 over the next 4-months into ****. Thus, the strength of **** as a counterparty will approximately double from c. £1,000,000 to c. £2,000,000 once the £1,000,000 equity injection is complete". That goes a long way to alleviating my concerns about the parent company guarantee / cross company guarantees. Presumably ablrate will monitor this and ensure that it happens? Hi registerme No worries, yes we will be monitoring. However, you made a good point and in the spirit of transparency we asked the borrowers to prepare a clarification of the other group loans and how the guarantee fits in. This has been uploaded to the documents sections of the loan. Regards Ablrate
|
|
nick
Member of DD Central
Posts: 1,055
Likes: 825
|
Post by nick on Mar 14, 2017 19:45:32 GMT
Subordination of director's loan: will both the company and the director (in their capacity as a lender) be party to the subordination agreement. I want comfort that in the event of the company not honouring the subordination and repaying the directors loan, we would have recourse to recover the funds directly from the director.
- Yes, these are long term subordinated loans.
No personal guarantee: can you confirm that there will be no personal guarantee given by the director or ultimate shareholder(s) (beyond the corporate guarantees disclosed)
- The ultimate shareholder has not given a personal guarantee. Put in perspective however, the ultimate shareholder has an 8 figure net worth and a very good track record and would not enter a commitment that he didn't have every intention of seeing through.
Other credit facilities: I note that the balance sheet shows a small negative petty cash balance. Does the company have a overdraft facility or any other credit facilities beyond the director's loan?
-No overdraft or other credit facilities credit card facilities. The petty cash is just that, cash for valeting cars, paying for fuel etc. Missing share capital:a small point, but the company's issued share capital of £100 does seem to be accounted for on the balance sheet - I assume that this basic accounting entry has yet to be made as no formal accounts have yet been prepared to date?- Yes, this will be rectified at year end. ablrate thank you for your responses. In respect of the subordinated loans, will there be an inter-creditor subordination agreement between the existing lender (ie director) and us agreeing the priority of the new loan and subordination of the existing debt? This is fairly standard to ensure that the priority lender can enforce their rights directly against the subordinate lender rather than relying solely on the company to make the right payment priority (particularly important when an existing subordinated loan is provided by a related party). The reason why I asked if there is any other credit facility is because the petty cash balance is negative which is obviously in error and I had assumed the negative balance represents some form of credit - not really an issue in itself, but such basic accounting anomalies does undermine, to a certain degree, confidence in the reliability of the rest of the management accounts. Thanks Nick
|
|
|
Post by ablrate on Mar 21, 2017 13:51:27 GMT
ablrate - this loan appears to be filling well, far in advance of its cllose date. Are you able to advise whether drawdown will be promptly after filling, or at a later date (eg several weeks)? I ask because of secondary market considerations. TIA Hi Draw down will be prompt after it fills. Regards Ablrate
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Jul 12, 2017 15:11:55 GMT
"Tranche 2" tomorrow 11am, moving bit more upmarket at new locations:
Amount: Up to £500,000 Term: 48 months (6 months minimum term) Rate: 12% - Amortising Security: Corporate Debenture & Corporate Guarantee Asset Security: £1,262,000 (LTV 78% taking into account loan #1000065) Instant Returns: Enabled Loan Live: 11am 13 July 2017
|
|
|
Post by Deleted on Jul 12, 2017 15:40:20 GMT
term "upmarket" is relative
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Jul 12, 2017 15:51:48 GMT
term "upmarket" is relative Now edited.
|
|
|
Post by ladywhitenap on Jul 12, 2017 19:55:31 GMT
I can't help wondering if VSL are over extending themselves.
5 Months after one £500k - 4 year loan they are back for another £500k over 4 years
OK this is plan to move into more upmarket vehicles but are they trying to grow too fast, I really can't decide???
LW
|
|
greatmarko
Member of DD Central
Posts: 343
Likes: 373
|
Post by greatmarko on Jul 12, 2017 23:38:06 GMT
Hmmm.. so what's the point/benefit of investing new money in this new second tranche, when there's plenty of the first tranche (1000065) currently available on the SM at a discount (i.e. higher yield)?!
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Jul 13, 2017 0:51:33 GMT
Hmmm.. so what's the point/benefit of investing new money in this new second tranche, when there's plenty of the first tranche (1000065) currently available on the SM at a discount (i.e. higher yield)?! The consensus has been moving towards helping the borrower fulfill its business plans and the platform its loans but the fact the SM offers a greater yield is an interesting twist. (One further thing to note is that the new loan 12% will have a greater AER too as it assumes compounding the interest over a longer lifetime).
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Jul 13, 2017 0:53:33 GMT
I can't help wondering if VSL are over extending themselves. 5 Months after one £500k - 4 year loan they are back for another £500k over 4 years OK this is plan to move into more upmarket vehicles but are they trying to grow too fast, I really can't decide??? LW Certainly a rapid expansion, hopefully updated docs will give us a better idea of sustainability (about the only time ablrate update 'existing' loans when there's a further call on funds).
|
|
|
Post by Deleted on Jul 13, 2017 7:16:01 GMT
There is a clamour in the press for this sort of business to be challenged. While I hold some such loans, there may be some kickback.
|
|
registerme
Member of DD Central
Posts: 6,209
Likes: 6,015
|
Post by registerme on Jul 13, 2017 8:49:24 GMT
Yeah I think I have enough exposure to this company, and asset class.
|
|