sl125
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Post by sl125 on Oct 30, 2016 12:26:02 GMT
Rxdav: Just to add to the points raised by others, I too have no affiliation with FC other than being an investor who is very satisfied with the returns I make.
I find it interesting reading many of the forum entries where people think that they should receive, say, 10% per annum without accepting the risk that goes with such returns. To put into perspective, last time I checked a Bank of England yield curve, zero risk interest rates was about 1%, so it follows that anything netting the sort of rates P2P aims to deliver will involve a degree of acceptance that defaults will occur .. or rather, that some of your investment will go south.
I think it was you that mentioned that FC should be seeking to improve its recovery rates through more pro-active recovery procedures, and if necessary the courts. You then say "FC are currently making a serious loss and burning cash at an alarming rate.". Clearly, collections / recoveries costs money. I've worked with many finance departments over the years, and the collections teams usually have to accept that if the cost of chasing debt exceeds the expected recovery, then they accept to cut their losses.
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sl125
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Post by sl125 on Oct 25, 2016 17:50:36 GMT
Hor1997 has been awfully quiet of late. I was expecting him to have posted on how this loan having been paid with additional interest is simply unacceptable.
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sl125
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Post by sl125 on Oct 25, 2016 17:48:15 GMT
£200 on one loan against a total investment of £1000 sounds like you didn't heed the number one rule when it comes to P2P: diversification.
Without diversification, the risk that an individual loan will wipe out your capital is increased significantly.
When you say a short time.... how long? As it is very very unlikely that a loan goes into default within 6 months.
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sl125
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Post by sl125 on Oct 21, 2016 11:19:46 GMT
Hor, could you explain what you mean by the two statements: 1. On 18th Oct you said "I have probably the record number of withdrawals in 2016 (over 100 in the last 6 months now)". 2. On 20th Oct you said " I regularly sell and buy volumes in the MILLIONS monthly"
Over 100 withdrawals in 6 months? wow, that's pretty much a withdrawal every working day... But a buy/sell rate in the "millions"? are we talking volume or amounts here?
Ok, cards on the table: what is the size of your FC portfolio now, and how much was your peak investment value?
Without wishing to enter a "whose is bigger" competition, I'm just curious what your goals are. I'm curious, also, about the amount of time you spend complaining (not just on these forums, but the formal complaints you have alluded to, which presumably has now been taken up with the Financial Ombudsman Service....). Given that time is money, do you factor the monetary value of that effort into your return calculations?
Personally, I started with FC 3 years ago and have steadily been increasing my holding (currently about £200k) since my net returns (after charges and defaults) have been about 10% per annum. My defaults are exceedingly low, largely because of my "strategy" (if that's the right word) of constantly selling (at premium mainly, but if they don't shift within 2 months, at par... which fly out of the door within 5 minutes). That's why I'm extremely sceptical of many of your claims about the time it is taking you to exit your portfolio (given your professed extensive investment experience, I'm assuming you made sound decisions, so they should be as easy to sell as mine... which are chosen using a very mechanistic process)
But maybe it's because I never went for property bridging loans, knowing that that particular market is particularly .... let's just say interesting... whether it is brokered by FC or any other platform. All in all... a healthy return compared to all other asset classes I hold.
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sl125
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Post by sl125 on Oct 19, 2016 19:50:28 GMT
Also undermining Hor's adamant certainty must be the news on the Manchester Property loan, which was late to the tune of 6 months... and fully paid up yesterday with interest in full. It shows that with property, going for the default as soon as possible is not necessarily the best option has Hor seems to think it is. (oh no.. I've dared to say something against the infallible one.... who has has been "trying" to leave FC for 2 years but for some reason can't help buying more loans and then posting the word "unacceptable" in capitals)
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sl125
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Post by sl125 on Oct 14, 2016 12:07:34 GMT
Going back to the original post of this thread. Perhaps the real reason you were "jailed" on the other place is your constant spamming, "unacceptable" use of defamatory language and shouty capitalised words. Nothing to do with silencing criticism, but with silencing a troll.
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sl125
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Post by sl125 on Oct 14, 2016 12:03:49 GMT
Hor: you really are talking out of your hat whilst claiming to be some expert in bridging finance.
For a start, as has been pointed out, a property development bridging loan would typically be paid with interest at the end of term. Delays are very common in property development, and so many loans breach their initial term. However, interest will continue to accrue, and any sensible lender will know that to call in the debt through a default would serve nobody's needs, since recovery will be harder. So any lender seeking to maximise the overall return rate will strike a balance and see whether to wait out rather than immediately go for a default.
You claimed on the other place that you somehow know the best practice in an industry you have no knowledge of (if I understand you from your previous posts you are an IT developer... Apparently one of the worlds best HTML coders who could fix FC's code in 5 minutes...).
Finlly, an expert in finance such as you should already know that you cannot raise a complaint to the FCA. The FCA is the regulatory body responsible for the policy of the finance industry. Complaints would be made to the Financial Ombudsman Service. But they would no doubt advise that you need to raise the formal complaint to FC in the first instance, and even after that would say that FC havent done anything wrong.
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sl125
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Post by sl125 on Jun 9, 2016 8:06:43 GMT
SteveT: "classed as SIC 64921 - Credit granting by non-deposit taking finance houses and other specialist consumer credit grantors"
I'm not entirely convinced that would stand up to a HMRC inspection if your company is a closed company. The counter argument would be what is to stop any Joe Bloggs from incorporating specifically to shield his personal investments from higher marginal rates of income tax.
As others have pointed out, the main rate and small profits rate of corporation tax have now been aligned, so currently there is no disadvantage to the company being classified as CHIC. However, hidden in the detail of the last budget was a statement to the effect that the Chancellor is considering legislation to discourage moneyboxing (ie. retaining excessive cash in a company that does not serve any purpose other than as a cash investment).
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sl125
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Post by sl125 on Jun 9, 2016 7:55:45 GMT
The word "close" does indeed refer to the ownership and control of the company. The
The guidance for CIHCs is in HMRC manual CTM60700, which falls under the broader manual for close companies CTM60000, which defines a close company: Close companies: general: broad definition
Subject to certain exceptions, a close company is broadly a company:
which is under the control of: five or fewer participators (see CTM60107), or any number of participators if those participators are directors, or
more than half the assets of which would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company - see CTM60320.
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sl125
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Post by sl125 on Jun 9, 2016 7:42:56 GMT
" Invest as a Company:£1,000,000 at 12% interest generates £120,000 Invest as an Individual: (no other income) £1,000,000 at 12% interest generates £120,000 " That's because your initial assumption of the investment amount is incorrect. The cash available for investment through a company is before it has been drawn as income, whereas the cash available for investment as an individual will have had to have been previously drawn as income and therefore subject to income tax, NI etc. before you invest it.
Ie. If I had £1,000,000 in my company as surplus cash, I could invest the whole of that £1,000,000 through the company. But to invest as an individual I would have to firstly draw it down from the company and pay tax on that, leaving only (to keep things simple) about £600,000 to invest as an individual.
So, in simple terms: your starting investment in a company is already nearly 50% higher than investing the same money as an individual. Then you get the advantage of compounding through deferred taxation (ie. paying corp tax of 20% on the profits whilst in the company, and only taking an income tax hit eventually when you take it out many years later).
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sl125
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Post by sl125 on May 20, 2016 6:44:09 GMT
Westonkev: does this affect those of us who have already invested through their company in Ratesetter? Ie. Presumably I don't need to transfer my company's investments from my standard Ratesetter account into this new business account?
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sl125
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Post by sl125 on Apr 4, 2016 12:43:57 GMT
I'm not sure the accounting needs to be that complicated.
Under the loan relationship rules, all gains and losses (ie. both the interest received and the "related transactions", which are the charges, premiums, discounts, etc) are simply brought into account as non-trading investment income (which then goes into one figure - interest - on the CT600 return). The detail behind the individual transactions can simply be the download of FC's monthly statements, filed away should you be audited. Then in your accounting system, simply record one journal per month of the net gain/loss. Assuming a net gain this would be: Debit: FC account (asset) Credit: non-trading investment income (income)
So long as you keep the FC spreadsheets detailing the individual transactions, you shouldn't need to record the individual loan transactions in your accounting system. If you were to account down at the micro level, it would get pretty messy - eg. Interest received: dr asset, cr income FC charges: debit income, cr asset premium (when selling): dr asset, credit income etc.
The above is a simplification, as on the balance sheet you would probably need to classifiy the money currently sitting in FC's holding account as cash, whereas the money currently lent out is "other debtors".
The only other thing to bear in mind with loan relationship rules, is whether your company is in any way connected to to any of the companies you are in a loan relationship with. But if, as it seems to be the case, you are a close company / PSC with spare cash to invest, this shouldn't be a concern.
Finally, depending on how much income you are generating through FC compared to your company's trading income, you might find your company becomes classified as a Close Investment Holding Company. Now that the small companies rate of corp tax has been abolished, this is not so much a concern anymore. But it used to be that a CIHC classification would mean your company would be taxed at the main corp tax rate.
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sl125
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Post by sl125 on Mar 29, 2016 9:22:15 GMT
Once again the incredible FC team has been surprised by the bank holidays (not that they are written years earlier in any scheduler....). Withdrawals are back to 'random' times. My Friday and Monday withdrawals have not come through. Also repayments (even those internal FC-FC, i.e. property loans) are in late/retry mode. Great. They have previously told me that since they moved to faster payment that you should see withdrawals early next day if you submit your request before early afternoon (not defined) - obviously doesn't apply at weekends or bank holidays. I wasn't sure whether things were back to normal and that they are still using faster payments after the problems they seemed to have a few weeks back, but it seems from your experience that things have gone back to normal. Hor: I believe Friday and Monday are not working days - the clue is the name "bank holiday". So, you seem to expect a withdrawal request you placed on a non-working day to be back in your account first thing people are back in the office? Although faster payments do indeed have a 2 hour SLA, that is the SLA once the instruction has been issued to from the originating bank to VocaLink (the clearing system responsible for FPS). A company such as FC will have various accounting processes to follow before the instruction is issued to their banking provider, who then have a direct link to Vocalink. As a result, FC's SLA to us is clearly stated to be 3 days, not the instaneous SLA that you seem to imagine is your right.
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sl125
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Post by sl125 on Dec 13, 2015 12:36:30 GMT
Brett
FWIW, you may have fallen foul of the various FCA rules that the banks need to follow when opening accounts. Not sure whether this counts for anything in the banks' criteria, but the fact that you declared your holding of P2P investments as part of your business plan would possibly by indicative of your trading status as a company - ie. are you a trading company that is simply investing surplus cash (ie. the investment is genuinely non-trading and therefore incidental to your trading activity), or a close investment holding company where the investment income forms over 20% of your turnover?
I run a management consultancy limited company and invest the company's spare cash through the 3 big players (FC, RS and Zopa). My company bank account was opened with Cater Allen, although the account was "introduced" through an accountant. If you're applying directly to the bank without an accountant I should imagine the bank's checks will be more stringent / "tick-box-y" (depending on your point of view). Also, if you are investing in P2P through the company without an accountant, you need to be clear about HMRC loan relationship rules when it comes to the corporation tax side of things (particularly if you trade your loans on the secondary market of platforms such as FC).
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sl125
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Post by sl125 on Nov 26, 2015 23:50:27 GMT
Yes, it was the Accrued Interest Scheme I was referring to, which states that Under the AIS, the interest which has accrued up to the date of sale is assessed to income tax on the vendor (whose sale price will have been increased to take account of it), and the purchaser is given relief for the same amount normally against the next payment of interest.
So if FC loans would not fall under the definition of transferable securities by the definition in AIS then it would be interesting to see how a realised gain (ie. The portion of the sale that is accrued interest) should be fairly taxed.
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