theshape
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Post by theshape on Jun 28, 2017 21:10:12 GMT
AB appear to have structured this loan so they don't lose out if it is redeemed early Does it have the normal minimum 6m interest? It's notoriously difficult to value these modular loans, previously had to go on borrowers valuation only Minimum 6 months interest, page 8 Borrowing Proposal.
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registerme
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Post by registerme on Jun 28, 2017 21:28:08 GMT
AB appear to have structured this loan so they don't lose out if it is redeemed early Whilst true, I struggle to see how lenders lose out if it's redeemed early (at least absenting an incredulous interest rate hike) - what am I missing?
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Post by df on Jun 28, 2017 22:20:46 GMT
TRUST, in a Platform's own, in-house DD - The Holy Grail! Any Platform that can achieve and maintain that deserves to be, and will be, wildly successful. It must be based on trust if 60k was gone in 5 minutes :-)
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blender
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Post by blender on Jun 28, 2017 22:56:40 GMT
It must be based on trust if 60k was gone in 5 minutes :-) Some ABL investors aren't buying into the loan per se. They are buying a position that they hope to unwind on the SM at a profit. If they can earn Instant Returns on their position until the loan goes live and then sell their holding at a 1-2% markup within a few weeks then it's not a bad return. I did say 'if'.... That would be unwise. The SM has not been so generous recently. Anyone buying at a premium will be shown an AER which assumes a 48 month loan, while the AER for a six month loan would be rather less.
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Post by df on Jun 28, 2017 23:10:00 GMT
It must be based on trust if 60k was gone in 5 minutes :-) Some ABL investors aren't buying into the loan per se. They are buying a position that they hope to unwind on the SM at a profit. If they can earn Instant Returns on their position until the loan goes live and then sell their holding at a 1-2% markup within a few weeks then it's not a bad return. I did say 'if'.... I was under impression that ABL don't do instant returns. Is it varied from loan to loan?
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stevio
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Post by stevio on Jun 29, 2017 6:33:40 GMT
Some ABL investors aren't buying into the loan per se. They are buying a position that they hope to unwind on the SM at a profit. If they can earn Instant Returns on their position until the loan goes live and then sell their holding at a 1-2% markup within a few weeks then it's not a bad return. I did say 'if'.... That would be unwise. The SM has not been so generous recently. Anyone buying at a premium will be shown an AER which assumes a 48 month loan, while the AER for a six month loan would be rather less.
and the SM might get paused if pay back early
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SteveT
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Post by SteveT on Jun 29, 2017 7:30:34 GMT
That would be unwise. The SM has not been so generous recently. Just wait until the IFISA launches ...
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blender
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Post by blender on Jun 29, 2017 8:49:00 GMT
That would be unwise. The SM has not been so generous recently. Just wait until the IFISA launches ... Hard to know how the forthcoming IFISA is overhanging the Ablrate SM. I am not keen to get into trading on futures. A loan is a loan. It is good that Ablrate seem to be concentrating resources on the IFISA; very wise.
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SteveT
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Post by SteveT on Jun 29, 2017 8:54:16 GMT
Just wait until the IFISA launches ... Hard to know how the forthcoming IFISA is overhanging the Ablrate SM. I am not keen to get into trading on futures. A loan is a loan. It is good that Ablrate seem to be concentrating resources on the IFISA; very wise. When FS first launched their IFISA, their SM was pretty much sucked dry within a week or two, at ever better prices.
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stub8535
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Post by stub8535 on Jun 29, 2017 9:10:35 GMT
Hard to know how the forthcoming IFISA is overhanging the Ablrate SM. I am not keen to get into trading on futures. A loan is a loan. It is good that Ablrate seem to be concentrating resources on the IFISA; very wise. When FS first launched their IFISA, their SM was pretty much sucked dry within a week or two, at ever better prices. Yes SteveT but the trading "at better prices" was really people hyper inflating their ifisa investment by buying at 4% discounts whilst creating a loss for tax on their other account by discounting at 4%. This was a reason for FS cutting the max min discounts to 1%. I do hope ab have considered this with their forthcoming offering to protect themselves from the taxman.
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SteveT
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Post by SteveT on Jun 29, 2017 9:30:14 GMT
When FS first launched their IFISA, their SM was pretty much sucked dry within a week or two, at ever better prices. Yes SteveT but the trading "at better prices" was really people hyper inflating their ifisa investment by buying at 4% discounts whilst creating a loss for tax on their other account by discounting at 4%. This was a reason for FS cutting the max min discounts to 1%. I do hope ab have considered this with their forthcoming offering to protect themselves from the taxman. Certainly there was a bit of that going on (until FS cut the maximum discount) but, from the standpoint of a SM seller, dozens of loans that previously needed to be discounted by 1%+ to get them to sell were soon merrily selling at par to lenders filling their new IFISAs
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blender
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Post by blender on Jun 29, 2017 12:28:46 GMT
On the Ablrate SM you cannot trade outside of the current spread of best offer and best bid, and so the system forces any transfers to be done in that range, which is the 'market rate'. However, the fact of the IFISA will affect the 'market rate', because the usual trading volumes are so low.
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stub8535
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Post by stub8535 on Jun 29, 2017 12:47:34 GMT
Yes SteveT but the trading "at better prices" was really people hyper inflating their ifisa investment by buying at 4% discounts whilst creating a loss for tax on their other account by discounting at 4%. This was a reason for FS cutting the max min discounts to 1%. I do hope ab have considered this with their forthcoming offering to protect themselves from the taxman. Certainly there was a bit of that going on (until FS cut the maximum discount) but, from the standpoint of a SM seller, dozens of loans that previously needed to be discounted by 1%+ to get them to sell were soon merrily selling at par to lenders filling their new IFISAs I see what you mean SteveT. I have taken advantage of this to decrease losses on sales in order to bail out.
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elliotn
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Post by elliotn on Jun 29, 2017 13:31:27 GMT
It's notoriously difficult to value these modular loans, previously had to go on borrowers valuation only /on topic hat on Whilst the borrower is credible the lack of formal asset valuations pushes this more into SME lending for me and whilst opening affordablity is satisfactory (with further projected income streams) that may not remain so with upcoming economic uncertainty. Saying that this will be my 2nd largest loan on abl while I finish off redeploying Ly funds (and anticipating this borrower's imminent redemptions).
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macq
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Post by macq on Jun 29, 2017 15:41:09 GMT
People normally ask these questions after i have invested.So just checking can these buildings be put on the back of a lorry and have they had a tracking system fitted?
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