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Post by kuflink on Apr 19, 2018 11:25:21 GMT
Hello all,
We'd like to share an email with you that we have just sent out to our database...
We’re making a positive change to our proposition…
Have you ever topped up your Kuflink wallet to invest in an exciting new opportunity, only to find the deal is fully funded once you’re ready to click ‘Invest Now’?
If so, we have some great news for you!
From now on we are increasing the availability of each loan from 80% to 100%. This means there is more opportunity for you, and the rest of our investor community, to make your money grow further!
The best part…
You will still benefit from the same unbeatable 20% guarantee upon which we earnt your trust and loyalty!
Kuflink will continue to cover the first 20% loss if it occurs on all Select-Invest loans – and as you can see on our platform, our investors have never lost a penny!
How will we cover 20% of losses?
Kuflink has already begun to increase the size of its provision fund just in case any loss did occur.
Does this affect the risk exposure of each new deal?
Your risk exposure will remain the same as it is always has been; whether we co-invest alongside you or provide the first 20% cover of loss, the protection you have is the same.
Does this change affect loans that are already live?
No, all existing loans that are live will still have a 20% co-investment from Kuflink Bridging which is your 20% first loss guarantee on all Select-Invest loans.
If you have any questions please let us know, you can call us on 01474 33 44 99 or email hello@kuflink.co.uk - you are likely to get a quicker response via these channels than on the forum,
Thank you Rachel Southcott Marketing Director
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Liz
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Post by Liz on Apr 19, 2018 11:30:53 GMT
This is either a bad or badly explained!
It is stated that Kufflink with cover 20% of losses which is less than before(or badly worded)
Say £140k value £80k to investors £20k to kufflink
Property sells for £80k. No losses.
New scheme 140k value £100k to investors
Property sells for £80k. 20k of losses! Kufflink say they will cover 20% of losses, so £4K. Investors 16k out of pocket.
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SteveT
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Post by SteveT on Apr 19, 2018 11:40:20 GMT
It’s 20% first loss
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Liz
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Post by Liz on Apr 19, 2018 11:46:45 GMT
So a lesser cover then! I think they will still cover the same but haven't been clear enough in the wording. 20% first loss is a meaningless statement as I don't know what it means and I trained in accountancy and have a degree in economics, so I'm not stupid.
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Post by kuflink on Apr 19, 2018 12:19:32 GMT
So a lesser cover then! I think they will still cover the same but haven't been clear enough in the wording. 20% first loss is a meaningless statement as I don't know what it means and I trained in accountancy and have a degree in economics, so I'm not stupid. Hello, The change to our proposition provides you with the same protection against losses that you have always had. The difference is that we no longer co-invest 20% upfront. You would only feel the true benefit of our 20% co-investment if a loss were to occur, and none of our investors have ever lost a penny to date. The concept of covering 20% first loss is what our USP has always been centered around - this is the purpose of the 20% stake. It is important to highlight that not every single loan on our platform is going to go into default, this is highly unlikely, and so having a 20% stake in every opportunity is not required – those funds can be used to increase our loan portfolio and thus the number of opportunities on our platform. We can still provide the same guarantee to our investors in the form of 20% loss protection without the need to set aside 20% of every loan amount, but rather ensure that our provision fund is substantial enough to cover losses based on past performance of our loans. Thank you Rachel
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Post by kuflink on Apr 19, 2018 12:22:05 GMT
This is either a bad or badly explained! It is stated that Kufflink with cover 20% of losses which is less than before(or badly worded) Say £140k value £80k to investors £20k to kufflink Property sells for £80k. No losses. New scheme 140k value £100k to investors Property sells for £80k. 20k of losses! Kufflink say they will cover 20% of losses, so £4K. Investors 16k out of pocket. Hello, There seems to be confusion with regard to what we are covering. We are still going to cover 20% first loss of the total loan amount, not 20% of the loss amount, I hope this helps to clarify our proposition. The guarantee is not less than before, it is the same amount of cover. Thank you Rachel
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SteveT
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Post by SteveT on Apr 19, 2018 12:52:33 GMT
So a lesser cover then! I think they will still cover the same but haven't been clear enough in the wording. 20% first loss is a meaningless statement as I don't know what it means and I trained in accountancy and have a degree in economics, so I'm not stupid. No, it means they take the first loss, up to a maximum of 20% of the capital value of the loan. So if the recovery is 80%, they get nothing and you get all of your capital repaid.
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SteveT
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Post by SteveT on Apr 19, 2018 12:57:15 GMT
There seems to be confusion with regard to what we are covering. We are still going to cover 20% first loss of the total loan amount, not 20% of the loss amount, I hope this helps to clarify our proposition. The guarantee is not less than before, it is the same amount of cover.... but only if Kuflink put enough money in the Provision Fund to cover whatever actual losses occur. Lendy used to claim their Provision Fund would cover any and all losses, and look at the state of affairs there. I regard this as a dramatically weakened guarantee; if Kuflink hold 20% of a loan then there is certainty that up to 20% first loss will be covered. However, if we're reliant on there being enough in a Provision Fund to cover losses perhaps years down the line, there can be very little certainty (unless you've put in place some sort of insurance policy?)
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Liz
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Post by Liz on Apr 19, 2018 12:58:34 GMT
So a lesser cover then! I think they will still cover the same but haven't been clear enough in the wording. 20% first loss is a meaningless statement as I don't know what it means and I trained in accountancy and have a degree in economics, so I'm not stupid. No, it means they take the first loss, up to a maximum of 20% of the capital value of the loan. So if the recovery is 80%, they get nothing and you get all of your capital repaid. They should make that clear! It clearly says in the email "how will we cover 20% of losses".
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r00lish67
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Post by r00lish67 on Apr 19, 2018 14:00:19 GMT
Hi kuflink a couple of things: 1) If you must change this approach, will the provision fund be entirely constituted of cash or also contracted future income? Will the number value be displayed somewhere prominently on your site and reflected in your financial accounts? 2) This is at least the second time you've presented a clearly negative change as a positive one in your investor communications, the first being the 'benefit' offered to lenders of not earning interest whilst putting down funds earlier on unconfirmed deals. Please stop doing this, it's just patronising. Alternatively, if you really believe it's a change we'll prefer, then why not poll us here and you'll quickly find out whether that's really the case. In this case, I sincerely doubt it.
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stub8535
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Post by stub8535 on Apr 19, 2018 14:06:26 GMT
This is either a bad or badly explained! It is stated that Kufflink with cover 20% of losses which is less than before(or badly worded) Say £140k value £80k to investors £20k to kufflink Property sells for £80k. No losses. New scheme 140k value £100k to investors Property sells for £80k. 20k of losses! Kufflink say they will cover 20% of losses, so £4K. Investors 16k out of pocket. Hello, There seems to be confusion with regard to what we are covering. We are still going to cover 20% first loss of the total loan amount, not 20% of the loss amount, I hope this helps to clarify our proposition. The guarantee is not less than before, it is the same amount of cover. Thank you Rachel How potentially generous. If a loan recover 90% then you are going to give 20% of the loan to lenders pot? Seems illogical🤔
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elliotn
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Post by elliotn on Apr 19, 2018 14:29:05 GMT
Hello, There seems to be confusion with regard to what we are covering. We are still going to cover 20% first loss of the total loan amount, not 20% of the loss amount, I hope this helps to clarify our proposition. The guarantee is not less than before, it is the same amount of cover. Thank you Rachel How potentially generous. If a loan recover 90% then you are going to give 20% of the loan to lenders pot? Seems illogical🤔 20% is max cap loss coverage, that would be 10%. You're an English teacher educated to above degree level?
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puddleduck
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Post by puddleduck on Apr 19, 2018 14:58:13 GMT
This sounds like a negative change to the proposition to me!
Are Kuflink saying that the 20% they would have co-invested alongside, will now go into a provision fund instead? If they are not fronting up 20% as before, I cannot see how this can be positive move for investors.
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stub8535
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Post by stub8535 on Apr 19, 2018 15:11:12 GMT
How potentially generous. If a loan recover 90% then you are going to give 20% of the loan to lenders pot? Seems illogical🤔 20% is max cap loss coverage, that would be 10%. You're an English teacher educated to above degree level? @elliotm at no stage did any rep from Kufflink add the word maximum. Indeed, they were insistent that they would pay 20% of the loan value, whatever the loss, from the words used. You have logically come to the conclusion that this would be a silly stance for the company in agreement with my previous comment about it being illogical.🤔 I bow to your far superior knowledge of the workings of our wonderfully expressive language.
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bugs4me
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Post by bugs4me on Apr 19, 2018 15:51:17 GMT
Unsure what method will be utilised to calculate the amount needed to go into the PF. My reaction is not another PF. Other platforms with PF have tended to conveniently manage to 'kick the can' down the road. In simple terms and purely IMO, the loan never defaults so the PF is never used. The platform can then boast 'no lender has.....' So whilst all PF's by their nature must be discretionary, I would like to know, in straightforward terms an example of when the PF would be used.
For now, kuflink have just become another P2P company without a SM and with lower interest. A PF which no one has explained how it would operate although I assume it would come into effect when the platform decided upon a default - which may be never.
I really think it's too early in the day for Kuflink to start removing it's USP.
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