nsinvestor
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Post by nsinvestor on Jul 13, 2018 17:22:50 GMT
 So nearly half the provision fund is not in cash. Future contracted income = cash Lendy still have to collect from bad debtors. Isn't this a good old fashioned circular reference? The next question is why on earth are they having to use money yet to be collected as part of the provision fund total? I can only assume because they did not have the cash flow to put the 2% collected up front into the fund and are using those monies elsewhere for 'operational' reasons. Future contracted income is expected future income that is currently being pursued from the borrower, valuer or guarantor etc… through legal avenues. Although there is no absolute guarantee of recovering these funds, this figure includes amounts that the firm is confident in its ability to recover through legal channels.
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Steerpike
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Post by Steerpike on Jul 13, 2018 17:31:26 GMT
I think that this is pretty standard stuff, don't the much respected LW do something similar?
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mary
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Post by mary on Jul 13, 2018 17:54:20 GMT
Correct, this is the standard methodology. RS do the same.
However, the Future Contracted Income is simply a fixed percent of the loan spread over the loan term.
In Lendy's favour, they (mostly) withhold all the interest due for the whole loan term (as its deducted from the funded amount given to the borrower at drawdown) and then pay Lenders, Themselves and the PF monthly, as due, from a segregated account. RS do not have this benefit and rely on borrowers to pay up, every month, on time (which they mostly do).
On this basis the Lendy PF is more "real" than RS, which is more "hopeful".
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empirica
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Post by empirica on Jul 13, 2018 19:18:49 GMT
Correct, this is the standard methodology. RS do the same.However, the Future Contracted Income is simply a fixed percent of the loan spread over the loan term. In Lendy's favour, they (mostly) withhold all the interest due for the whole loan term (as its deducted from the funded amount given to the borrower at drawdown) and then pay Lenders, Themselves and the PF monthly, as due, from a segregated account. RS do not have this benefit and rely on borrowers to pay up, every month, on time (which they mostly do).
On this basis the Lendy PF is more "real" than RS, which is more "hopeful". That doesn't tally with my reading of the pop-up description (reproduced a few posts previous). Rather than a fixed percent that should flow in as matter of course on performing loans, I read it as 'distressed' monies that are hoped to be realised if legal recovery eventually proves successful. That's a lot of uncertainty. Also, if the PF is topped up monthly, why don't the figures change on the Lendy website more frequently? I would see it as the shortfall in repayments historically covered by the PF, but the figures done't tally. ie: PFFCI = £1.9M Paid out = £1.2M which would leave questions over where/how/why the other £0.7M is due. (How much did Lendy contribute on PBL081?)
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mary
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Post by mary on Jul 13, 2018 20:22:44 GMT
Correct, this is the standard methodology. RS do the same.However, the Future Contracted Income is simply a fixed percent of the loan spread over the loan term. In Lendy's favour, they (mostly) withhold all the interest due for the whole loan term (as its deducted from the funded amount given to the borrower at drawdown) and then pay Lenders, Themselves and the PF monthly, as due, from a segregated account. RS do not have this benefit and rely on borrowers to pay up, every month, on time (which they mostly do).
On this basis the Lendy PF is more "real" than RS, which is more "hopeful". That doesn't tally with my reading of the pop-up description (reproduced a few posts previous). Rather than a fixed percent that should flow in as matter of course on performing loans, I read it as 'distressed' monies that are hoped to be realised if legal recovery eventually proves successful. That's a lot of uncertainty. Also, if the PF is topped up monthly, why don't the figures change on the Lendy website more frequently? I would see it as the shortfall in repayments historically covered by the PF, but the figures done't tally. ie: PFFCI = £1.9M Paid out = £1.2M which would leave questions over where/how/why the other £0.7M is due. (How much did Lendy contribute on PBL081?) Fair point, I've not tracked the figures, so can't be sure. Likely the stats are not updated frequently, however I don't think Lendy can count any overdue loans as contributing to Contracted Future Income when the loan is Non-Performing.
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empirica
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Post by empirica on Jul 13, 2018 20:38:32 GMT
Fair point, I've not tracked the figures, so can't be sure. Likely the stats are not updated frequently, however I don't think Lendy can count any overdue loans as contributing to Contracted Future Income when the loan is Non-Performing. Ah _ apologies, I should have been more clear. I'm referring to not so much the Defaulted loans but rather those on the Claims Underway tab which are now without tangible security and any further recoveries associated with them _ whether it be from the borrower or errant third-parties_ is speculative. Hence the the pop-up description.
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tx
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Post by tx on Jul 14, 2018 22:14:06 GMT
I had raised the same question in Lendy’s Pod cast, if you listen back, you can hear Lendy’s wishy-washy answer.
But I was surprised that my question wasn’t cut off, and they actually “tried” to answer it ... oh, well, they didn’t.
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