hazellend
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Post by hazellend on Aug 31, 2017 20:27:55 GMT
Grow first, profit later
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mikeh
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Post by mikeh on Aug 31, 2017 20:33:00 GMT
Firstly I'd like to say that in my experience, Money Thing has been great, particularly in communication with many great loan offerings. However, As part of my due diligence, I like to look at the sustainability of the platform as well as the quality of the loans. Looking at records on companies house, I notice that Money thing is showing fairly low profits (>£34k in the last year and >£14k in the previous year). In contrast Lendy's profits were just over £1million. I also note that the company appears to be operating from a residential address so if costs are being kept to a minimum, why are profits so low? Short answer: MT operate on much lower margins than Lendy have at least until recently and have had much smaller originations again until the last 2 or 3 months or so.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 31, 2017 22:03:59 GMT
It isnt run out of a private address its run out of a chicken coop, and those chickens are rapacious when it comes to rent. Its peppercorn without the pepper and that aint cheap.  |
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star dust
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Post by star dust on Aug 31, 2017 22:11:47 GMT
It isnt run out of a private address its run out of a chicken coop, and those chickens are rapacious when it comes to rent. Its peppercorn without the pepper and that aint cheap. Don't you mean cheep?
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oldgrumpy
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Post by oldgrumpy on Aug 31, 2017 22:44:42 GMT
It isnt run out of a private address its run out of a chicken coop, and those chickens are rapacious when it comes to rent. Its peppercorn without the pepper and that aint cheap. Don't you mean cheep? Don't egg 'im on!! 
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Post by rollercoaster on Sept 1, 2017 0:09:20 GMT
MT's revenue is from arrangement and loan maintenance fees, so requires a large number of high value deals to really make a lot of profit.
You are right to look to see the position of the platform and any other intermediaries, and ask how they would cope with any hiccups. Both MT and BO appear to have very little reserves and are highly dependent on (their specialty area) property. If property values stagnate or go down then both are highly exposed where the loans are secured on property assets as interest only loans. If property remains "safe as houses" then there are charges on physical assets if the borrower defaults.
As limited companies the directors' assets are safe from being used to repay any debts, but on the flip side it doesn't look like the directors have much in the way of assets to keep the companies afloat if it does all go wrong.
This is Peer to Peer lending and risk assessment is all a part of it. However P2P doesn't absolve companies and investors from the reality of business!
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archie
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Post by archie on Sept 1, 2017 6:11:09 GMT
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sussexlender
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Cheat seeking missile
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Post by sussexlender on Sept 1, 2017 7:11:12 GMT
Morning archie.
Many thanks for the link to the article concerning p2p platforms. It was very helpful,
Regards, SXLR
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archie
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Post by archie on Sept 1, 2017 7:19:19 GMT
Morning archie.
Many thanks for the link to the article concerning p2p platforms. It was very helpful,
Regards, SXLR It was from this thread.
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hazellend
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Post by hazellend on Sept 1, 2017 7:22:53 GMT
Why would a property crash affect moneything.
Another credit crunch would mean more borrowers turning to P2P funding and MT would benefit from that.
As far as I am aware, a loan defaulting does not affect MT adversely apart from some naive investors getting a bit huffy and leaving.
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m2btj
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Post by m2btj on Sept 1, 2017 7:37:00 GMT
From a February 2015 start-up to current profitability is more than impressive. Low overheads, quality team & good loan offerings inspire confidence in the MT platform. What the fledgling P2P sector doesn't need is a global economic shock like 2008! I don't think many platforms would survive such an economic meltdown!
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Post by Deleted on Sept 1, 2017 8:19:03 GMT
Given that the "profit" of a company is exactly whatever the Directors want it to be I would be far more concerned about cash flow. Any idea on cash burn?
The idea of a property crash would require that all those who owned property suddenly didn't want their houses, since those who live are unlikely to want that it would require foreigners to suddenly not want the property. If sterling fell that is not an issue, so it would have to be a destruction in property rights/rule of law. Most likely would be a Corbyn win followed by the introduction of capital/property tax brought about by an attempt to rebalance the demographic wealth imbalance.
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