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Post by ablrate on Aug 7, 2014 8:53:03 GMT
When can we expect more loans Ablrate.Your first one seems to be stuck at around 9% of required funds. Perhaps the interest rate needs to be more attractive as around 12% is obtainable on various sites with asset backing. Hi We are evaluating a number of loans right now and should have some additions for lenders to evaluate shortly. We have a number of investors who have funds on account so we believe the loan will get taken up. The interest rate is a function of risk on any transaction, I think if you applied a risk adjusted rate to the current transaction you would come to the conclusion that it it is a very good rate compared to the risk being taken. I am interested in feedback on this point that I was asked yesterday. "Some of the more well known sites have legions of investors lending at 7%-10% unsecured, why would they do that if they can invest at higher rates with security?" I talked about diversification etc... but are there any FC investors for example, who could give us some feedback on the secured platforms vs unsecured?
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Post by emoney on Aug 7, 2014 10:36:42 GMT
Hi Ablrate, we have compiled a p2pindependent forum poll on this very subject and it makes for interesting early days viewing, we operate secured and unsecured lending and our early day experiences are that the retail lenders are looking for double digit returns on both secured and unsecured, take a look p2pindependentforum.com/thread/1084/nisa-unsecured-loans-secured-property
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Post by ablrate on Aug 7, 2014 13:13:56 GMT
Hi Ablrate, we have compiled a p2pindependent forum poll on this very subject and it makes for interesting early days viewing, we operate secured and unsecured lending and our early day experiences are that the retail lenders are looking for double digit returns on both secured and unsecured, take a look p2pindependentforum.com/thread/1084/nisa-unsecured-loans-secured-property Hi I did see that when looking through the forums, thanks for the reminder. It does seem, and I am just giving an opinion here, that there is an element missing and that is risk adjusted returns. I don't know how this particular issue is solved right now (although I fully expect it to be so in the future), but to say that a 'Lower risk secured loan' would pay 5%-7% is based on parameters that banks would use, not necessarily based on the new paradigm of peer lending. What if a 'lower risk loan' was paying 10% and another 'higher risk' loan was paying 12% - which actually gives a better risk adjusted return? Where the banks have been dropping the ball for some time is not understanding the nature of the transactions they are lending into and turning down companies and transactions on the basis of computerised parameters, with relatively little (if any) commercial consideration. This is where peer lending steps in, in my humble opinion. What I mean is that 'the crowd' (for want of a better term) are able to look at a transaction from the stand point of an investment decision and lend on that basis, but the fundamental missing piece of data is risk.... so it seems what happens right now is that higher rates are seen as risky, whereas lower rates are seen as less so.... which oddly is our experience dealing with family offices and is not necessarily the case. Some of the low rates seen in the unsecured lending sector are down to supply and demand of, and for loans, not returns based on actually risk. In our sector, the blended rate of debt is what is important to the lessor, and the ability to actually do the deal, of course. So a loan request can be made, with a higher interest level for our lending members as they facilitate the transaction that essentially is their 'deal premium'. The blended rate of debt in the transaction for the lessor is still low and his profit is baked into the lease deal terms. What you can basically end up with is a loan that has a reasonably high return, but when you adjust it for risk, it is even higher. Perhaps this is an issue we, in the industry, need to try and standardise so apples can be compared with apples.
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Post by ablrate on Aug 7, 2014 14:47:45 GMT
Is there really a need to be advised whenever there has been a new bid via email and a notification (aka message) on the site? I've looked to see if there is a way to turn the notifications off but I can't find it. It's also a bit of a pain to have to delete the notifications individually, one at a time so is there a way you can add a tick box or something to mass delete? Hi We are adding in the 'mass delete option' for notifictaions. We have also completed the watch list changes so you can add and delete these easily. You will receive notification on any watch list items until you delete them from your list or until that loan is complete. (but wont receive any email notifications if your notifications are switched off). Regards Ablrate
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Post by davee39 on Aug 7, 2014 20:50:39 GMT
There is individual loan risk and there is platform risk. Additionally with a business like yours there is 'not having a clue what this is about' risk.
Ratesetter and Zopa are established low risk platforms with default protection, so unsecured is Ok. Funding Circle presents largely unsecured loans but stresses a loss factor to be assumed across a large portfolio. Strategies allow small enhancements to returns, currently I get 12.1% after fees and losses. FC have done secured loans where the assets turned out be fairy dust! Newer pawnbroking style platforms have offered secured 12 - 13% against assets, but the assets have sometimes proved to be worth much less than thought. Finally there is property, where again 12% has become a benchmark on some sites.
An asset is only worth what someone is prepared to pay for it.
I am unsure as to your target investor, but I assume that aircraft leasing is not something a typical Zopa lender should want to be involved in.
Finally, assuming I wanted to put £100 into your current aircraft, I would also want another 9 loans to allow diversification and a worthwhile investment. Some P2P sites have failed to provide that deal flow so I would prefer to wait for some evidence of a mature lending model.
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Post by ablrate on Aug 8, 2014 11:50:17 GMT
There is individual loan risk and there is platform risk. Additionally with a business like yours there is 'not having a clue what this is about' risk. Ratesetter and Zopa are established low risk platforms with default protection, so unsecured is Ok. Funding Circle presents largely unsecured loans but stresses a loss factor to be assumed across a large portfolio. Strategies allow small enhancements to returns, currently I get 12.1% after fees and losses. FC have done secured loans where the assets turned out be fairy dust! Newer pawnbroking style platforms have offered secured 12 - 13% against assets, but the assets have sometimes proved to be worth much less than thought. Finally there is property, where again 12% has become a benchmark on some sites. An asset is only worth what someone is prepared to pay for it. I am unsure as to your target investor, but I assume that aircraft leasing is not something a typical Zopa lender should want to be involved in. Finally, assuming I wanted to put £100 into your current aircraft, I would also want another 9 loans to allow diversification and a worthwhile investment. Some P2P sites have failed to provide that deal flow so I would prefer to wait for some evidence of a mature lending model. Hi davee39 Thank you for your feedback, it is great to get viewpoints from people who are investing on multiple platforms, which I suspect most people do. I think you make a good point on platform risk, but platform risk wouldn't be solved with higher rates... However, I fully take your point on the 'not having a clue what this is about risk'... lol... very well put. On that point, this is something that we aim to give more information on and we have some webinars planned for interested investors, where we will have an hour discussing the aircraft loans sector and capital equipment leasing. We will be having investor meetings where you can meet the team and learn more. We are also putting together a video series that goes into detail of the elements of investing in loans. One of our directors is presenting at the Aircraft Finance Summit in October, but we aim to have this presentation on the site for Lenders to view before this. We realise its an ongoing educational matter that is our responsibility, so we are happy to answer questions and put together as much as we can. We know its a great space, so we would like to get that across to potential lenders. If there is anything specific that lenders want as an explanation, we are happy to provide that. I appreciate that 'Asset Backed' isn't always the case. I can't comment on others deals, but commercial aircraft are probably the most regulated and protected asset on the planet, they have predictable value curves and lease rates which have been mapped over decades (especially the aircraft we prefer as deals). Comfort for investors that the asset is not 'fairy dust' (which is now may favourite description of dodgy assets!) is that in each transaction there is multiple due diligence; three sets of lawyers (lessor, bank and lessee), three sets of appraisers (lessor, lessee and bank) and then there are multiple protections such as mortgages over the asset etc. It is very true to say that an 'asset is only worth what someone is willing to pay for it' and what they are willing to pay for it is a predictable number in commercial aircraft. The value is on the condition of the aircraft, with maintenance reserves (where the lessee pays additional money each month, based on the aircraft's usage) there is a known schedule of maintenance and so at the end of the lease the aircraft will be in a known condition. I take your point on diversification and deal flow, something we are discussing right now. Deal flow is not an issue for us, but completing those deals is obviously important and so we have to get our thinking caps on.... Thank you so much for your feedback, you guys have been super generous with your time and thoughts and it is greatly appreciated and has given us food for thought as to how we can better provide a useful and profitable platform for lenders. Regards Ablrate
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Post by wildlife2 on Aug 11, 2014 12:57:34 GMT
Ablrate does look promising, and I am thinking about registering with them but I was hoping they will have some shorter 6mth/1 year loans to fund.
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Post by ablrate on Aug 11, 2014 15:07:24 GMT
Ablrate does look promising, and I am thinking about registering with them but I was hoping they will have some shorter 6mth/1 year loans to fund. Hi Thanks for taking a look at us, we appreciate it. We will be having some shorter term loans in the capital equipment sector, but the nature of aircraft loans are that they are longer term. When we have progressed a little and our secondary market is being used by lenders there will be opportunities to sell your loans and effectively shorten the term of the loan, but of course, this is something that will progress as we move forward. Regards Ablrate
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debeast
(o)(o)
Posts: 238
Likes: 44
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Post by debeast on Aug 11, 2014 20:00:00 GMT
Just to say managed to register ok. Your site needs a bit of finessing though. Making it clear what is mandatory and what isn't. Even with the fixed captcha its still pretty poor. There are many many many other available i suggest you change it Toe dipped lets see if the loan fufils? /beast
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Post by ablrate on Aug 12, 2014 8:18:24 GMT
Just to say managed to register ok. Your site needs a bit of finessing though. Making it clear what is mandatory and what isn't. Even with the fixed captcha its still pretty poor. There are many many many other available i suggest you change it Toe dipped lets see if the loan fufils? /beast Thanks for the feedback. I am have a meeting with the developers today, so will bring it up. Ref the loan, this one will also work as a partial draw down because it is essentially a refi of a small amount of equity. Regards Ablrate
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Post by brettb on Oct 24, 2014 13:28:14 GMT
I joined Funding Circle recently, mainly because it is a "household name" so to speak - I even bumped into some of their team at a job fair back in April.
Now I've maxed out Zopa and RateSetter I'm looking at the smaller operators.
Lack of liquidity is the main problem I've seen with the smaller, higher earning p2p platforms. Saving Stream looks good but there is hardly any liquidity, so I might have to withdraw my cash out again as currently half the money I have there is earning 0%. Funding Secure is great but you need a lot of F5 action to get in on the smaller loans. Compare that with Funding Circle and RateSetter where my money has been lent out way faster than I predicted (and at very good rates).
Anyway, I'll definitely be checking out Ablrate, I know that train leasing has been a decent business to be in, so I'll have a read up on aircraft leasing.
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