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Post by chielamangus on Oct 10, 2017 16:26:06 GMT
If this was a proposed retail outlet for almost anything more normal than "arts, crafts and artisan stuffthings" I think I'd feel more confident. But I know absolutely nothing about that industry (?) or the appetite for its products. Does anybody have any insight? A number of the womenfolk in my family just love this kind of emporium - they spend hours wandering around them, but they don't spend a lot of money, unless something catches their eye when it seems to be a must-buy and to hell with the price (one of these women only, thank goodness). My concern here would be the sheer number of businesses (400+) and the difficulty many of them would have in making a living. The one months notice is a sign that we are dealing with low profit and/or highly variable turnover businesses. A greater variety of shops and services might attract the non-arty-crafty types who might then be drawn into the secondhand and arty market. Even I have been known to buy something at one these places, even though I am one of those people (usually called males) who only go to the shops with a specific purchase in mind. I think it would take some time, more than the loan length, to establish a reliable cash flow from the rents.
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Post by Deleted on Oct 10, 2017 16:36:06 GMT
PG It depends, over the last few years we have had PGs that dissolve infront of the demand for the asset. We have also had PGs that stand firm.
My questions would be
1) Where are those assets which are being offered? 2) Has the present owner ensured that those assets are controlled in a manner which means the lender's agents can "get at them"? 3) Is the PG person a true high net-worth-individual or merely someone who is a high gross-worth-individual?
Monaco is one of those tricky places, some of the inhabitants are there as they have an "interesting" view on their ethical tax situation. If they have these views what are their views on PGs, are they equally "interesting"?
My own view is that the portal has to negotiate a position. Sometimes, in a negotiation, you accept a "gift" even if you don't want it, after all you can always give it back in return for something more valuable. That same negotiation then takes place with the lender.
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stokeloans
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Post by stokeloans on Oct 10, 2017 16:45:26 GMT
Are there any examples of a personal guarantee being succesfully applied to a p2p loan gone bad ?
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duck
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Post by duck on Oct 10, 2017 16:57:05 GMT
Are there any examples of a personal guarantee being succesfully applied to a p2p loan gone bad ? I do remember one on AC I believe, serious head scratching can't bring another one forward.
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agent69
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Post by agent69 on Oct 10, 2017 17:07:01 GMT
Are there any examples of a personal guarantee being succesfully applied to a p2p loan gone bad ? I do remember one on AC I believe, serious head scratching can't bring another one forward. The Belfast furniture store on AC repaid in full via a share portfolio, but this may have been via a third party providing the guarantee (not the borrower). Also had a posh west end restaurant on FC repay in full (over many months) by the guarantor.
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Steerpike
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Post by Steerpike on Oct 10, 2017 17:22:38 GMT
I do remember one on AC I believe, serious head scratching can't bring another one forward. The Belfast furniture store on AC repaid in full via a share portfolio, but this may have been via a third party providing the guarantee (not the borrower). Also had a posh west end restaurant on FC repay in full (over many months) by the guarantor. FK Bike D*** S******** repaid in full thanks to the PGs of two honourable men.
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elliotn
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Post by elliotn on Oct 10, 2017 17:36:44 GMT
Hi Ed MoneyThing - would it be worth putting a line in the loan descriptions to mention the PG when it applies? Hi. Will discuss this tomorrow and see if we can add this into all the loan descriptions. We had not to date only because lenders on here seem to hold such little weight/regard for PGs. Regards, Ed. Excellent loan update that has secured an opening nibble. PGs are necessarily complicated by Monaco and the British Virgin Islands but it may add a smidgeon to overall warm fuzzy feelings to be able to disregard them nevertheless .
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nick
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Post by nick on Oct 10, 2017 21:02:37 GMT
The value of PG is probably more in the aligning of interests then necessarily providing any significant financial security. PGs makes it more difficult, not impossible, for a debtor to just to walk away from the asset/SPV without further recourse. By putting them personally on the hook, it aligns their interest to get the best outcome for the creditor irrespective of whether they are left with any equity. That's why banks insist on PGs for most SME lending. In many SME situations PG may well be of limited value when things go pear-shaped, often because they have sunk everything into the failed business. Whilst it is not particularly difficult to squirrel away assets prior to personal bankruptcy, being a bankrupt still carries a degree of stigma - enough to make a debtor go an extra mile before throwing in the towel.
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hazellend
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Post by hazellend on Oct 10, 2017 21:22:48 GMT
The value of PG is probably more in the aligning of interests then necessarily providing any significant financial security. PGs makes it more difficult, not impossible, for a debtor to just to walk away from the asset/SPV without further recourse. By putting them personally on the hook, it aligns their interest to get the best outcome for the creditor irrespective of whether they are left with any equity. That's why banks insist on PGs for most SME lending. In many SME situations PG may well be of limited value when things go pear-shaped, often because they have sunk everything into the failed business. Whilst it is not particularly difficult to squirrel away assets prior to personal bankruptcy, being a bankrupt still carries a degree of stigma - enough to make a debtor go an extra mile before throwing in the towel. Thank you for this explanation nick. For some reason I had never looked at PGs in this way.
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GeorgeT
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Post by GeorgeT on Oct 10, 2017 22:22:05 GMT
The additional information was welcome but I'm afraid I haven't yet been persuaded to dip a toe.
The licences terminable upon 1 months notice don't inspire me at this stage - I note the desire to move the occupants onto leases, and the possible success of this project which may lead to that if the occupants do well, but at present it seems there is no security of income. The loan details seem a little contradictory in that it states "The rent from the tenants is paid monthly in advance" but then goes on to say, effectively, that there are no tenants at present and there is no 'rent' in the literal sense because the occupants are merely temporary licensees who could be off in a month and the licence fees are being received on a monthly basis.
e.g. lease = tenant = fixed term = rent licence = licensee = casual/temporary occupation = licence fee
Coupled with only 1 month's interest deducted upfront, I'm not confident enough to invest - yet.
I will have another look at it in the morning when my Dorset coast monies are credited to my account.
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fasty
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Post by fasty on Oct 10, 2017 23:15:40 GMT
I'd really like to support this one but it still seems to heavily depend on an optimistic expectation of early trading success. I believe that the risk justifies more than 13%.
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am
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Post by am on Oct 10, 2017 23:25:14 GMT
Hi Ed MoneyThing - would it be worth putting a line in the loan descriptions to mention the PG when it applies? Hi. Will discuss this tomorrow and see if we can add this into all the loan descriptions. We had not to date only because lenders on here seem to hold such little weight/regard for PGs. Regards, Ed. IMO, whether a personal (or corporate or other guarantee) is involved should always be disclosed as a matter of transparency of loan conditions. That lenders may place little value on PGs should not affect this. Again, IMO, the problem with PGs is determining their value. Because of this conservative lenders may discount them when evaluating loans, just as they may discount hope value in valuations. But their existence does effect investment decisions at least at the margin. I'm still thinking about this loan, but the presence of a PG might be the feather than tips the balance. (I was meaning to get my thoughts in order and contact you about the lack of clarity about the involvement of the various legal entities involved, which is what is currently worrying me - there's the principal, the company mentioned in the valuation report, the overseas company that owns the company mentioned in the valuation report, the company that was cited for HSE violations at the property, and several other companies which appear to have or have had some connection to the property.) With regards to PGs I expect lenders would like information to make a judgement on the willingness and ability of the guarantor to pay. I recently crystallised my opinion on ethical loan investment - you shouldn't lend if you think that the borrower's expected return averaged over the projected spectrum of outcomes is negative, or, simplified, if you think the borrower will lose out on the deal. (A less sharp condition is that the benefits of the loan should be shared "fairly" between borrower and lender, but that is a fuzzier criterion.) I find this a cleaner concept of lending ethics than trying to draw a line between predatory and non-predatory interest rates. In the case of this loan the borrower appears to be a "big boy" and can look after himself, so there's a case that I can defer to his judgement of the risks on his side. But I can invest with a clearer conscience if there is a business plan that I believe is feasible. (Your supplementary information partly addressed that, though the key question of occupancy rate should have, IMO, have been addressed in the VR.) Looking at the risks on my side, my problem is that the larger valuation in the VR is effectively a valuation of the business as a going concern rather than of the property, so is not relevant in the event of default as presumably the business would have failed, and there is as far as I could see no indication how the smaller valuation (which you are using) was obtained. Without your supplemental information I would have sat out this loan - not because of positive reasons to reject it, but because I couldn't make an informed judgement. With your supplemental information I'm still in two minds, and information on the strength of the PG could tip the balance either way. I recognise that respect for borrower privacy may get in the way of providing that information.
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johni
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Post by johni on Oct 11, 2017 10:21:06 GMT
Does the 12 month contract, with 1 month notice on either side mean, the stall holder is tied in for 12 months but after that either side can give 1 months notice? Or am I misunderstanding this?
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Nomad
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Post by Nomad on Oct 11, 2017 12:00:23 GMT
Does the 12 month contract, with 1 month notice on either side mean, the stall holder is tied in for 12 months but after that either side can give 1 months notice? Or am I misunderstanding this? I take it to mean the stall holder can leave at any time with one month's notice. Many small dealers would not want to commit to 12 months' rent, especially in a new centre with hundreds of units.
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am
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Post by am on Oct 11, 2017 21:23:20 GMT
... her son's company ... the incumbant office tenant for this building. Oh no - related company as a tenant - anyone remember "Tenanted Office Building Somerset"? Thanks MRC My first reaction to this was that it should have been moderated. There's nothing inherently wrong with rental agreements between related parties, provided that they are at market rates (to protect other creditors), unless you're questioning the existence of limited liability companies and small pension schemes; financial advisers often recommend that your business premises be owned by your pension. (I can think of three P2P loans which were to the property owner for funds to be injected into the tenant. There were risks - the tenants were in financial trouble so the rent was not guaranteed - but I saw nothing unethical in these arrangements. In this case the parent has a property that is standing empty, and the son has a company which needs offices - the solution is obvious.) Comparison with a loan which might be described as notorious is beyond what I consider fair comment. (Judging by the number of likes on the post this seems to be a minority opinion.)
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