Aberystwyth Hotel Loan

Great! Thanks for confirming.

Customer services replied to my "chaser", and promised a further update when the problem is resolved, so I'll leave that to them and let you and AH get on with more important stuff!

Should be fixed for everyone but if you see any aberrations then please let me know.

Latest update confirms the borrower has finally realised the numbers don't stack up, and has put the business up for sale.  No great surprise to me, the cashflow forecast I generated off the P/L forecast he provided us with at the time of the restructuring AC lenders proposed/ agreed to showed the business would be unable to generate the cash flow to service the debt however it was restructured and maintain adequate working capital for stock purchases.

Of course at the time lender sentiment was swayed by the promise of external business angel consultancy advice for the borrower (we never heard anymore on that subject) and the borrower's totally unreasonable (IMO) expectation of leasing the restaurant to a national chain at something like three times local rents (and at more than rents paid by such chains in prosperous south east towns)

Worryingly the borrower appears to be asking an unrealistic value for the business (based on AC's comment the asking price is more than adequate to cover capital & all accrued interest).  Given our borrower has 30+ years experience of the local student market, the likelihood of anyone else substantially increasing the return on capital is I'd suggest zero.

Probably the main hope is that someone will be able to visualise a more profitable use for the property than as a student focused pub and tradesman B&B, and that the local authority is ammeanable to a planning change of use.


EDIT: Also worth noting is the halving of the weekly payment to AC means the repayments are now less than the monthly capital repayment due. Stating the obvious, the prospect of the borrower starting to repay the interest accrued from December 2015 onwards is increasingly remote unless the business/property is indeed sold for a substantial premium.

Kudos for not saying I told you so.

I remember when this turkey first made an appearance in the days of the old forum (from memory asking for about £700k). I suspect that the borrowers are probably decent people, but well out of their depth (was it expansion into a new venture in Manchester that did for their finances?). Probably best to sell up and move on rather than continue the struggle. Never did understand how you can target the student population when there's a Weatherpersons' opposite

Hmm sorry chaps and lasses. chris has it on his list I'm sure.

I find it supremely ironic that loans such as #136,151 & 191 are still listed in my MLIA even though I hold £0.00 capital or interest (apparently it is impossible to remove some meaningless nano holding) yet I still have significant accrued interest in this loan but it has completely disappeared from my account, after just over 10% seems to have been credited at the same time as the capital repayment but I now have no way of knowing - simply unacceptable.

Whilst you are looking for priority fixes can I also suggest paying interest in a timely manner should be right at the top, I only have 11 remaining loans & 3 have had late payments (#74, 85/95 & 348) which I can only attribute to AC inefficiency & inability to activate the "payment distribution to lenders" button. They all have various limp excuses such as "inter account bank transfer" which often take a week or more, manual intervention was necessary & "payment was received on 25th (1 day early from borrower) & will be applied in due course" which turned out to be 31st. Whilst these individual lapses are minor in themselves collectively they give the impression that AC payment systems & procedures are either none existent, badly managed or simply being ignored & the fact that lenders suffer is seen as acceptable, in fact when they query it via Q&A the are often deleted or only replied to when payment has finally been activated. This "anytime will do" attitude is simply not acceptable & whilst my remaining legacy portfolio may not be representative if it was being replicated across the 300 or so other current loans then investors must be losing out on £thousands in lost interest, as well as all the AC wasted time answering unnecessary queries. Getting this right each & everytime a payment is due really should be a simple & easily achievable goal but it requires some commitment from AC senior management to drive the correct infrastructure.

I have just received the vote request regarding the outstanding interest on the Hotel loan.

Interest totalling £81,452.70 is outstanding to lenders, borrower is offering a total payment of around £16,290.54 (20%)

I presume that Assetz  still hold first charge on the hotel and the second charges on the house and flat.

So with that level of security I do not expect to get offered an 80% haircut .

It's vote Option B for me.
Reject the borrowers proposal and seek an alternative.