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Post by jumpingjackflash on Jan 13, 2015 21:25:55 GMT
So just to clarify you are a P2P lender that is a member of the P2PFA. Your strapline on your website is "The world's largest peer to peer market place for real estate mortgages."
You also have a blog post entitled "LendInvest Publishes Loan Book in Effort to Increase Transparency in the P2P Market"
However you don't technically operate as a P2P business as you don't offer any P2P products and thus don't need to be covered by the P2P regulation. At the same time you are keen to increase transparency in the P2P market despite not operating in it.
Am I missing something? Do you feel this reflects well on transparency or professionalism in the P2P market?
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Post by lendinvest on Jan 14, 2015 13:46:17 GMT
jumpingjackflashWhilst there is not a single p2p platform fully regulated by the FCA operating in the UK, we would argue that these concerns are being formed prematurely. There are many different platforms operating in the UK under the same interim FCA permission and yet we all appear to have own own unique models. The p2p regulations are quite light touch as they currently stand and we feel that there will be a number of platforms who will eventually operate in different ways to how they currently do when the FCA calls them up to apply for full regulation. The benefit of not having interim permission under article 36H is that we're able to apply for full regulation as soon as we're ready to. This could possibly result in LendInvest being one of the first P2P platforms to be fully regulated by the FCA under article 36H. If you have further specific concerns, please contact us directly on 02071181900 or support@lendinvest.com and a member of our team will be glad to help.
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Steerpike
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Post by Steerpike on Jan 14, 2015 15:28:10 GMT
Not sure that I am keeping up here, but as I understand it LendInvest and SavingStream are similar inasmuch as the lender/investor lends through the platform to a single entity that has loans with various borrowers and that there is no direct link between the (P2P) lender and borrrower. Whereas I think that for all (most ?) other platforms there is a direct link between the (P2P) lender and the borrower.
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Post by lendinvest on Jan 15, 2015 13:57:18 GMT
SteerpikeThrough our association with Montello (a funds management business) we're able to fund every loan which passes our strict underwriting criteria and due diligence ourselves rather than putting this out to the crowd which most platforms do. This means that the borrower has certainty of their loan being funded without the painful process of watching it get slowly funded online (or not!). This also means that the relationship with the borrower is only with LendInvest/Montello and it also means that we're 100% skin in the game of every loan we put on the platform (at the time of uploading). Once LendInvest investors starting investing in these loans, their funds are transferring from their segregated client account across to Montello and effectively replacing Montello's capital in that specific loan. Therefore there is transparency in which specific loan your money is being invested in, which again, many platforms now don't offer. The relationship for LendInvest investors is therefore only with LendInvest/Montello and thus the reason we're not currently operating under article 36H. The benefit for LendInvest investors the way we operate is that you start to earn your interest from the date you commit funds to a loan, as all loans on our platform are completed and performing loans at the time they're uploaded. So whilst being fully compliant with the regulator and transparent with our investment products we're able to offer superior win:win opportunities to both investors and borrowers. It is our strong intention to become fully regulated under article 36H as soon as possible and once we are we'll also be offering investment products under article 36H (direct borrower/LendInvest investor transactions).
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shimself
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Post by shimself on Jan 15, 2015 15:45:33 GMT
Well look you're having it both ways here and it doesn't sit well with me Your website says on page www.lendinvest.com/invest...platform allowing investors to lend directly to borrowers; and allowing borrowers to borrow direct from investors.If I knew who to complain to I'd actually complain now, formally. |
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Post by jumpingjackflash on Jan 15, 2015 20:24:27 GMT
Hi lendinvestthank you very much for responding on this board A couple of questions if I may - Did you apply for interim permission? If you did, was it rejected? If you didn't, why not? You "position" yourself as a p2p business (you describe yourself as a p2p marketplace for mortgages!), even if technically you aren't. The fact that you are applying now implies that you have aspirations to have a "genuine" p2p offering. If you aren't really a p2p business do you not think it would be best to stop describing yourself as such? it is a bit misleading...... |
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Post by lendinvest on Jan 16, 2015 15:54:18 GMT
LendInvest operates under a different model to many/most other peer-to-peer platforms. As such, it operates under a different FCA permission to many of the other platforms. The main difference is that LendInvest fully funds all of its loans in the first instance. That is, when a borrower applies for a loan through LendInvest, LendInvest underwrites the loan and then funds the loan to the borrower. It is only after the loan has been provided to the borrower that the loan is placed on the platform, for investors to invest in the loan.
LendInvest believes that this is a superior model because it gives borrowers the comfort that the loan will be funded, when it commits to fund a loan; and it gives investors the comfort that they will start earning a return on their investment from the day that they decide to invest in the loan. There are also various other advantages, such as taxation treatment etc. Having said this, there aren't two single peer-to-peer platforms in the market that operate the exact same model - every platform has a different model, and hence, differing FCA permissions.
LendInvest is a member of the Peer-to-Peer Finance Association (P2PFA), which includes the main/leading P2P platforms in the UK. Some of these platforms have the FCA's defined 36H defined permission, and some do not (not only LendInvest). You can have full confidence that LendInvest operates fully within the confines of the law, is in full and constant dialogue with the FCA about this evolving market, and has received all of the appropriate permissions and legal advice to operate lawfully!
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shimself
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Post by shimself on Jan 16, 2015 20:58:57 GMT
LendInvest operates under a different model to many/most other peer-to-peer platforms. As such, it operates under a different FCA permission to many of the other platforms. The main difference is that LendInvest fully funds all of its loans in the first instance. That is, when a borrower applies for a loan through LendInvest, LendInvest underwrites the loan and then funds the loan to the borrower. It is only after the loan has been provided to the borrower that the loan is placed on the platform, for investors to invest in the loan. LendInvest believes that this is a superior model because it gives borrowers the comfort that the loan will be funded, when it commits to fund a loan; and it gives investors the comfort that they will start earning a return on their investment from the day that they decide to invest in the loan. There are also various other advantages, such as taxation treatment etc. Having said this, there aren't two single peer-to-peer platforms in the market that operate the exact same model - every platform has a different model, and hence, differing FCA permissions. LendInvest is a member of the Peer-to-Peer Finance Association (P2PFA), which includes the main/leading P2P platforms in the UK. Some of these platforms have the FCA's defined 36H defined permission, and some do not (not only LendInvest). You can have full confidence that LendInvest operates fully within the confines of the law, is in full and constant dialogue with the FCA about this evolving market, and has received all of the appropriate permissions and legal advice to operate lawfully! When will you delete this misleading description from your website ?
..platform allowing investors to lend directly to borrowers; and allowing borrowers to borrow direct from investors...
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Post by 4thway on Jan 16, 2015 22:45:05 GMT
I personally don't think it's important how anyone on this board (including me) defines LendInvest, either as P2P or not (although if you're curious I call them P2P).
Regarding legal structure: they all have different legal structures. We as investors must each decide for ourselves if we're satisfied with that structure.
Above all else, P2P/not P2P, or whatever the legal structure is - above all those things - what matters is that we do our own research before considering investing in this investment. Do we totally trust these guys? That's for each of us to research properly and decide for ourselves.
Personally I have researched LendInvest in very great detail (more than I did for, say, RateSetter, as I think is appropriate in the circumstances) and I think they're an excellent business for investors, provided, as usual, we can and do stick to sensible investing strategies, e.g. diversification.
But if you have doubts after your own research, don't invest. Wait for opportunities that defeat your best attempts to be sceptical.
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shimself
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Post by shimself on Jan 19, 2015 9:48:00 GMT
I personally don't think it's important how anyone on this board (including me) defines LendInvest, either as P2P or not (although if you're curious I call them P2P). On what grounds do you consider they are p2p? what connection do you see between lender and borrower?
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Post by 4thway on Jan 19, 2015 14:44:49 GMT
I personally don't think it's important how anyone on this board (including me) defines LendInvest, either as P2P or not (although if you're curious I call them P2P). On what grounds do you consider they are p2p? what connection do you see between lender and borrower? This is just a question of semantics, shimself. The position between Saving Stream, Lendy, borrowers and lenders has been laid out in Saving Stream's forum a few times, and I don't think we need to repeat it all again. But whether we call that "P2P" is just our own preference of the English language. I personally don't think it's worth discussing language here. (Language is interesting, but it's not one of my reasons for being on this board.) Just like it's not important if steerpike call shares "potatoes". It's the assessment of the risks that matter. Otherwise, we will be discussing why a large number of us call Funding Circle peer-to-peer rather than peer-to-business too!
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shimself
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Post by shimself on Jan 19, 2015 16:48:51 GMT
On what grounds do you consider they are p2p? what connection do you see between lender and borrower? This is just a question of semantics, shimself. The position between Saving Stream, Lendy, borrowers and lenders has been laid out in Saving Stream's forum a few times, and I don't think we need to repeat it all again. But whether we call that "P2P" is just our own preference of the English language. I personally don't think it's worth discussing language here. (Language is interesting, but it's not one of my reasons for being on this board.) Just like it's not important if steerpike call shares "potatoes". It's the assessment of the risks that matter. Otherwise, we will be discussing why a large number of us call Funding Circle peer-to-peer rather than peer-to-business too! I'm sorry but I think you're "talking your book" here. OK you do risk assesments, albeit in a kind of mysterious way. The essential concept of p2p is that if the platform/intermediary goes bust we the lenders are still owed by the borrower. Lendinvest just doesn't seem to be conforming to that model; I think if their accountant did a runner to South America taking the contents of the bank accounts with him or her thus bankrupting the company (or fill in your own distaster scenario) then we the lender stand to lose a considerable amount, much more than if the same disaster befell TC or AC or Zopa or RS .... or other true p2x operators. Saving Stream is currently in the same situation, but they have declared they will do something about it (see p2pindependentforum.com/thread/1952/why-invest ). Wellesley was also in the same situation and they have fixed it. Lendinvest say on their website that they are p2x but in the small print it's different.
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Post by elljay on Jan 19, 2015 18:01:17 GMT
I agree it's an absolutely key point who the contract is between. Maybe 4thway is meaning the more general "crowd funding" rather than "P2P" or "P2B"? |
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Post by 4thway on Jan 19, 2015 18:51:05 GMT
Hi folks
I'm a bit embarrassed that this thread has been a little bit hijacked by 4thWay stuff. That wasn't my intention.
I wasn't responding as 4thWay but just with my own view that what you call it isn't important. Understanding the structure is important, but whether you call it P2P, crowdfunding or bananas isn't. I think, anyway. I think there is no name you can give any of these businesses that sums up their structures properly. Seeking out your own description/summary would make more sense.
And deeply understanding the structure makes even more sense. But I don't think it's worth going back and forth on the name. Some of you think the name is important and worth discussing though, and that's totally and utterly fine, so I'll just stay out of such conversations and let you discuss them in future. I can't add any more to that.
If you want me to respond as 4thWay now, I haven't given the category name a moment's thought. We're a tiny company with an awful lot to do! I don't love the term P2P. It doesn't explain very much and currently its used to catch a decent range of loan-based investments. But it's been (and will continue to be) a convenient, standard term to get beginners to understand very broadly what the investment is about. So long as they drill down into enough details to see what the investment is, including the structure, they can form their own opinions on the investment. (And, if it interests them, they can debate what they prefer to call the category it sits in.)
shimself you made a small reference to the "mysterious" way we rate risk. You're right that we do not provide enough details. We're doing our first upgrade to our methodology in the next few weeks and right after that we're going to de-mystify the ratings.
Another plus is that the more open we are, the more we'll benefit from external criticism from you smart guys too! That's something I anticipate with both excitement and, well, dread is too strong a word, but I'm agog at the very least.
The theory behind the mystery in the first place - the reason for it - was to protect ourselves from copycat websites - competitors, bloggers etc - but we've been philosophising about it and we just don't feel that we can or should keep so much from our users, even if it means competitors can just pinch stuff. So we're going to be as open as possible.
We still need to philosophise some more about exactly how open to be. Our guts tell us to be completely open, but we need our brains to check whether that would be business suicide or not.
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Steerpike
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Post by Steerpike on Jan 20, 2015 0:25:11 GMT
On what grounds do you consider they are p2p? what connection do you see between lender and borrower? This is just a question of semantics, shimself. The position between Saving Stream, Lendy, borrowers and lenders has been laid out in Saving Stream's forum a few times, and I don't think we need to repeat it all again. But whether we call that "P2P" is just our own preference of the English language. I personally don't think it's worth discussing language here. (Language is interesting, but it's not one of my reasons for being on this board.) Just like it's not important if steerpike call shares "potatoes". It's the assessment of the risks that matter. Otherwise, we will be discussing why a large number of us call Funding Circle peer-to-peer rather than peer-to-business too! As it happens, I am fond of a well turned Maris Piper, but I don't recall mentioning spuds here, or actually, anywhere recently. One thing I am sure of is that apples are not pears.
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