elliotn
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Post by elliotn on Jun 16, 2017 8:31:34 GMT
Category Secured Loan Listing title Car Sales Revolving Credit Facility Interest rate 12.00% Purpose of loan Refinance of existing borrowings and to finance the purchase of new vehicle stock Loan type Interest only Loan size £200,000 Payment frequency Monthly Loan term in months 12
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elliotn
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Post by elliotn on Jun 16, 2017 8:44:01 GMT
Just to separate this from the Huddle 100 questions (unless the Mods fancy a tidy up ) - some q&a below - afraid I don't know how to multi-quote huddlecapital the 200k loan is being used to re-pay exisiting borrowing of 100k and buy new cars and these new cars will form our security. Will the full 200k be available to fund new cars to form our security (if drawn down)? The 100k is used to pay down and existing facility, so his will be backed by the cars already on the forecourt. The balance will be used to purchase new car stick, again the loan will be secured by the vehicle stock. So to answer your question, the entire loan will be used to fund vehicle stock and the stock will cover the full loan amount, as drawn down. Hope this answers your question? Regards Huddle Capital Thanks HC, that was my supposition altho I read the docs as the msp would be used to buy new cars which would provide our security so might be worth a clarification that we'll also take over existing stock up to 70% retail. Risks The 70% LTV is against the retail value of the cars, not the trade value. It might be difficult to recover our money if the car trader fails. Exit Strategy Exit strategy is unclear to me. The loan is subject to a 12 month annual review, implying it is expected to roll on after 12 months. Presumably our exit is refinance of the facility elsewhere. I will probably buy this loan anyway. The 20% discount for Huddle 100 members makes this loan worth the risk. A bit of a young company to have much reputation. Previous owners? This is a new company, no accounts yet although our borrower has several other auto/taxi businesses. The site was previously used by V******* so there's a tradition of car selling there. The loan is up. I have a friend from B******n who says the company is well regarded. It has 5 stars on carguru.
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elliotn
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Post by elliotn on Jun 16, 2017 9:01:41 GMT
Risks The 70% LTV is against the retail value of the cars, not the trade value.  It might be difficult to recover our money if the car trader fails. Exit Strategy Exit strategy is unclear to me. The loan is subject to a 12 month annual review, implying it is expected to roll on after 12 months. Presumably our exit is refinance of the facility elsewhere. I will probably buy this loan anyway.  The 20% discount for Huddle 100 members makes this loan worth the risk. Yes, exit should be explicit. As a revolving facility this could be extended at term (think AE/RCC on MT) or by vehicle sales (ie sales receipts kept by ams and the credit facility not drawn on) but as a growing co I'd imagine refinance with ourselves or another lender to facilitate growth.
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kaya
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Post by kaya on Jun 16, 2017 10:33:36 GMT
Next Huddle loan up: a car dealership. No surprise there. If you factor in the cashback, it works out at 17% annual return over 4 years, which is probably about right for the risk. Secondary market exit could be sticky.
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david42
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Post by david42 on Jun 17, 2017 2:00:11 GMT
Next Huddle loan up: a car dealership. No surprise there. If you factor in the cashback, it works out at 17% annual return over 4 years, which is probably about right for the risk. Secondary market exit could be sticky. But why do you average it over 4 years? That would be right for the pub loan but the car dealership loan is for only 12 months assuming the loan is repaid on time.
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kaya
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Post by kaya on Jun 18, 2017 9:25:22 GMT
Because I was not paying attention. Think I got a cerebral synapse crossed line.
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Greenwood2
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Post by Greenwood2 on Jun 21, 2017 13:08:01 GMT
What happens if cars are not sold, ie not popular or too expensive, etc. Do Huddle continue to own them until they rust to the ground, or is there a time limit for the Huddle credit to roll on to another vehicle. Would hate to be part owner of a field full of unsaleable cars.
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metoo
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Post by metoo on Jun 21, 2017 14:16:38 GMT
What happens if cars are not sold, ie not popular or too expensive, etc. Do Huddle continue to own them until they rust to the ground, or is there a time limit for the Huddle credit to roll on to another vehicle. Would hate to be part owner of a field full of unsaleable cars. Our car financing intermediary company (detailed on p8 of the borrowing proposal, not the borrower, though they hold the funds when un-lent) is just under 2 years old, so relatively unproven. The report says the intermediary (my bold): It does not spell out what remedies would be available if stock was languishing but seems to imply that a failure to conduct the business satisfactorily could lead to some default event and taking control of the stock. In practise they might be able to require discounted sales to move stock on that wasn't selling?
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elliotn
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Post by elliotn on Jun 21, 2017 14:42:43 GMT
Stock is monitored to ensure max 70% CAP retail value. Presumably cars rusting to the ground would either be replaced to maintain the ongoing ltv or more stock would be added to maintain the ratio.
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Post by valuehunter on Jun 22, 2017 14:04:24 GMT
The google reviews make for some interesting reading... There's a theme of cars being sold with problems, and then the management fobbing people off and not answering the phone. I counted 20 such reviews telling a similar story.
That said, no company however well it operates will avoid unhappy customers, and they will certainly shout louder than the average happy customer. If they're selling 60-80 vehicles a month, over roughly a year of such reviews (some coming from the connected company), that's conservatively 720 cars = 2.8% of customers claiming problems...that we're aware of anyway. Sound reasonable for a company selling second hand goods?
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metoo
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Post by metoo on Jun 22, 2017 14:09:59 GMT
I'd like to hope they're reading the reviews to grow a strong business. The security is in the cars but we'd certainly rather the business succeeds than have to rely on recovering the value from the stock. Price of cars is a topic of current debate if the economy were to dip.
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elliotn
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Post by elliotn on Jun 22, 2017 15:22:26 GMT
I'd like to hope they're reading the reviews to grow a strong business. The security is in the cars but we'd certainly rather the business succeeds than have to rely on recovering the value from the stock. Price of cars is a topic of current debate if the economy were to dip. & 70% retail not too great if wholesale is working off, say, 50% - how to move a job lot at that rate?
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Post by elephantrosie on Jun 24, 2017 23:42:02 GMT
Next Huddle loan up: a car dealership. No surprise there. If you factor in the cashback, it works out at 17% annual return over 4 years, which is probably about right for the risk. Secondary market exit could be sticky. are you implying that the risk for this loan is low? also why is SM exit difficult?
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elliotn
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Post by elliotn on Jun 25, 2017 2:33:29 GMT
Next Huddle loan up: a car dealership. No surprise there. If you factor in the cashback, it works out at 17% annual return over 4 years, which is probably about right for the risk. Secondary market exit could be sticky. are you implying that the risk for this loan is low? also why is SM exit difficult? 17% is implying a high risk/reward. SM exit will be harder if investors have bought more than they would ideally like to hold to term to take advantage of the cashback and the look to sell at the same time.
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kaya
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Post by kaya on Jun 27, 2017 15:27:51 GMT
Spot on. Actually, 32% does look about right for this loan. Hope I've got the math right this time. That assumes an exit in 1 year of course, which is not even clearly specified, it would appear.
Only <35k invested so far.
Worth the risk for 32%? Not many seem to think so, so far. As for the % of bad reviews, probably only a minority of dissatisfied customers will ever write a review, so the true rate of dissatisfaction would probably be rather higher than 2.8%.
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