r00lish67
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Post by r00lish67 on Apr 11, 2018 9:59:55 GMT
Just to cover the other possible reason off (spot the subtle emphasis): It's a * development loan* of *low recoverable value*, issued by * FundingSecure*  That said, still mighty tempted as at *34% LTV* <cough> it'll fly off the shelves on the SM as it is. Still, that's how I got so vastly overexposed to FS in the first place, so must resist even this wafer thin mint! Snowflake generation  Damn right. <checks FS recovery agent isn't Refresh> 
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Liz
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Post by Liz on Apr 11, 2018 10:09:04 GMT
Snowflake generation Damn right. <checks FS recovery agent isn't Refresh> Off topic I know, but this is an area we should be grilling fundingsecure on. New thread maybe. Do we know the agent for starts?
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rogerthat
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Post by rogerthat on Apr 11, 2018 10:16:14 GMT
Damn right. <checks FS recovery agent isn't Refresh> Off topic I know, but this is an area we should be grilling fundingsecure on. New thread maybe. Do we know the agent for starts?Can you elaborate on that perhaps so that Neanderthals such as myself can understand your drift...have I missed owt ?
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r00lish67
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Post by r00lish67 on Apr 11, 2018 10:18:45 GMT
Damn right. <checks FS recovery agent isn't Refresh> Off topic I know, but this is an area we should be grilling fundingsecure on. New thread maybe. Do we know the agent for starts? I could have sworn I saw who they were somewhere, but all I can see on the website is: "If FundingSecure enters into financial difficulties, it will initiate a wind-down plan whereby no new loans or investors would be taken on and the loan book would be run-down. We have worked with the FCA to develop this plan, as well as the financial indicators that would cause us to initiate the plan. This is all designed to ensure a smooth and timely wind-down of the business if required.
In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions"
Which in itself, is actually quite reassuring assuming it's all true. What's missing is who would actually execute it, unless that's tucked away somewhere else.
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Liz
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Post by Liz on Apr 11, 2018 10:21:52 GMT
Off topic I know, but this is an area we should be grilling fundingsecure on. New thread maybe. Do we know the agent for starts?Can you elaborate on that perhaps so that Neanderthals such as myself can understand your drift...have I missed owt ? Sorry. The agent is recover agent, in case of platform failure. They have to have an agent and plan in place for FCA approval.
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Liz
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Post by Liz on Apr 11, 2018 10:29:14 GMT
And would administration fees be enough to pay receivers? I would hope so, but doubt it. If these fees were enough, the platform wouldn't fail for financial reasons in the first place. And receivers are hardly cheap.
I think we will learn a lot from the Col situation. A cost I'm gladly not paying, but feel for those who are.
Sorry mods you may need to make a new thread. We have cluttered this one.
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star dust
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Post by star dust on Apr 11, 2018 11:25:34 GMT
Mod Hat On/ I've created a new thread as suggested, wasn't quite sure what to call it, so if the thread title isn't quite right then report the first post with your suggestion/s. r00lish67 could change it themselves in any event. |
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jonno
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nil satis nisi optimum
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Post by jonno on Apr 11, 2018 11:41:24 GMT
Mod Hat On/ I've created a new thread as suggested, wasn't quite sure what to call it, so if the thread title isn't quite right then report the first post with your suggestion/s. r00lish67 could change it themselves in any event. Have to admit I damn near sh*t myself when I first saw the title 
Would Funding Secure "Living Will Arrangements" be better?
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blender
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Post by blender on Apr 11, 2018 11:45:25 GMT
Mod Hat On/ I've created a new thread as suggested, wasn't quite sure what to call it, so if the thread title isn't quite right then report the first post with your suggestion/s. r00lish67 could change it themselves in any event. I suggest 'contingency' before plans.
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Liz
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Post by Liz on Apr 11, 2018 11:58:36 GMT
"What if Funding Secure runs into financial difficulties."
The official term.
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star dust
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Post by star dust on Apr 11, 2018 12:23:34 GMT
Mod Hat On/ I've created a new thread as suggested, wasn't quite sure what to call it, so if the thread title isn't quite right then report the first post with your suggestion/s. r00lish67 could change it themselves in any event. Have to admit I damn near sh*t myself when I first saw the title
Would Funding Secure "Living Will Arrangements" be better?
Well yes, in the current climate I was acutely aware of this, and at risk of startling the horses was contemplating adding "Don't Panic" to the end. In terms of changes, unless someone wants the thread title to be decided by a poll, I'll settle for the amendment suggested by blender as that has garnered the most likes at this moment in time.
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aj
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Post by aj on Apr 11, 2018 13:15:27 GMT
+1 To 'I'd like an official FS response' on this.
There's a glaring lack of information on how current and future delinquent loans would be handled.
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Liz
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Post by Liz on Apr 11, 2018 13:23:03 GMT
My question is: How are receivers paid for is the loan fees aren't enough?
Have they had quotes on costs of receivers vs likely fees from existing loans?
I would have liked the FCA to force platforms to put a small amount aside to help pay for the receivers.
Maybe FS could buy premises they use, that could be sold to help with receiver fees and also save FS rent, that's if they don't already own them.
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Post by dan1 on Apr 11, 2018 13:41:11 GMT
My question is: How are receivers paid for is the loan fees aren't enough? Have they had quotes on costs of receivers vs likely fees from existing loans? I would have liked the FCA to force platforms to put a small amount aside to help pay for the receivers.Maybe FS could buy premises they use, that could be sold to help with receiver fees and also save FS rent, that's if they don't already own them. I'll preface this by saying I really don't know what I'm talking about but is this part of the reason for the capital requirements directive/regulations - prescribing that companies must hold ring fenced funds depending on their business, size, employees etc ? I recall a previous discussion on this subject and IIRC £60k was mentioned for small firms such as these fintechs - yangmills perhaps?
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yangmills
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Post by yangmills on Apr 12, 2018 12:24:32 GMT
I'll preface this by saying I really don't know what I'm talking about but is this part of the reason for the capital requirements directive/regulations - prescribing that companies must hold ring fenced funds depending on their business, size, employees etc ? I recall a previous discussion on this subject and IIRC £60k was mentioned for small firms such as these fintechs - yangmills perhaps? Not me. I'm on gardening leave. I think you mean a post by an ex-colleague of mine (and member of our P2P lending syndicate) samford71 . The required reg cap for a P2P platform, with full FCA permission = (0.3% of the first £50m lent) + (0.2% of the next £450m lent) + (0.1% lent above £500m). So for Collateral, with a loan book of say £20mm it would be around £60k. I don't know the outstanding FS loan book size but guessing at £150m, we might be talking perhaps £350k. You can compare that with a bank where the Tier 1 capital is 8%, multiplied by the Basel III RWA weightings (say 50% for residential property to 125% for an SME loan), so the effective capital requirement is around 4-10% of the loan book. Essentially a leverage ratio of 10-25. Of course, P2P platforms are intermediaries, not principal risk takers like banks, so the reg cap requirement should be much lower. However, it isn't just the risk of loss that the reg cap needs to protect against but also the illiquidity of the loan book and how long it takes to unwind. Effectively P2P reg cap requirements allow a loan book that is 300-1000 x the size of the capital base which seems an incredibly thin margin. Moreover, it seems really odd to me that a platform like MI dealing in 30-90 day invoices has the same reg cap requirement as a platform dealing with speculative property developments or another one dealing with 5-year commercial mortgages or SME loans. Simply makes no sense.
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