mikes1531
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Post by mikes1531 on Oct 15, 2014 23:51:26 GMT
A critical question is... What will happen when the loans that are due to mature very shortly do pay out? Will there be new loans available to reinvest the funds into? Or will all that's available be the same old loans that lenders probably have already invested as much as they wish into? If the latter, then I'd expect a lot of the proceeds from the maturing loans to leave SS. Once it's out, will it ever come back? Or will it be invested elsewhere? I like a few others on here think that at least some of the near due loans will role over like 002 and two of the canal boat loans. However that is just guess work and could get interesting if it applies to some of the larger bridging facilities. You may be right, but I don't know how feasible it really is to roll over a PBL. With a boatie loan, the borrower just has to pay the accrued interest and they're allowed to renew the loan. With a reasonably sized loan, the sum required won't be enormous, and the borrower probably could raise that via a credit card or an overdraft. With a PBL, however, it won't be so easy. Taking PBL001 as an example. The principal amount is £455k. When the loan was taken out, interest would have been 'retained', which is to say that although £455k was raised from lenders, something more like £410k would have been handed across to the borrower. That £45k difference has allowed SS to pay lenders £4.55k/month (a total of £32k for the seven months this loan will have run by the time it matures, plus some more to cover the interest earned by lenders before drawdown) and leave a bit for SS/Lendy's share of what the borrower pays. If there were loan set-up fees or introducer's fees, then the borrower might have received even less -- maybe more like £400k. So in order for the borrower to roll the loan over without increasing the LTV, they'd need to come up with about £50k -- and that might not be so easy for them to do. Because of the way SS is structured, with SS/Lendy sitting between their lenders and the borrowers and promising to use their own resources to intervene if the borrower doesn't pay on time, there hasn't been any pressure on SS to report whether or not the borrower is making any progress towards refinancing. We're relying on SS to perform as they've promised, which would mean paying PBL001 lenders £455k in 12 days' time. The obvious question is whether they have the resources to do that. And the obvious concern is what's to stop SS from paying off the PBL001 lenders with some of the £1.3M that's been raised for PBLs 009, 011, 012, and 013 -- none of which have gone live yet.
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Post by phoenix on Oct 16, 2014 9:07:26 GMT
And the obvious concern is what's to stop SS from paying off the PBL001 lenders with some of the £1.3M that's been raised for PBLs 009, 011, 012, and 013 -- none of which have gone live yet. Who said "Ponzi"? 
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bugs4me
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Post by bugs4me on Oct 16, 2014 9:08:20 GMT
I like a few others on here think that at least some of the near due loans will role over like 002 and two of the canal boat loans. However that is just guess work and could get interesting if it applies to some of the larger bridging facilities. <snip> And the obvious concern is what's to stop SS from paying off the PBL001 lenders with some of the £1.3M that's been raised for PBLs 009, 011, 012, and 013 -- none of which have gone live yet. I would certainly hope that would not be the case. From memory, I believe savingstream confirmed a few blue moons ago that all loans are 'self contained' and in being so no cross 'contamination' exists. I would think there would be more than a couple of raised eyebrows at the FCA if that was not the case. Perhaps savingstream would care to re-confirm.
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Post by savingstream on Oct 16, 2014 11:59:08 GMT
It would be completely against our business practices and our regulations to repay PBL001 from other loan raised funds. It would also not be in any way beneficial due to the funds then not being there when PBL11-13 needed to go live, or alternatively needed to be repaid back to investors for not going live.
For update PBL001 is currently being refinanced through Kent Reliance and is with legals at the moment, we have had eyes on the offer and expect to be in funds for this loan repayment in the next few days.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 16, 2014 12:21:42 GMT
It would be completely against our business practices and our regulations to repay PBL001 from other loan raised funds. It would also not be in any way beneficial due to the funds then not being there when PBL11-13 needed to go live, or alternatively needed to be repaid back to investors for not going live. For update PBL001 is currently being refinanced through Kent Reliance and is with legals at the moment, we have had eyes on the offer and expect to be in funds for this loan repayment in the next few days. Given recent experience on another platform, if this turns out as indicated, this would be something of a feather in SS' cap IMHO.  Any news on the two boats due to reach term shortly?
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bugs4me
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Post by bugs4me on Oct 16, 2014 13:06:27 GMT
It would be completely against our business practices and our regulations to repay PBL001 from other loan raised funds. It would also not be in any way beneficial due to the funds then not being there when PBL11-13 needed to go live, or alternatively needed to be repaid back to investors for not going live. For update PBL001 is currently being refinanced through Kent Reliance and is with legals at the moment, we have had eyes on the offer and expect to be in funds for this loan repayment in the next few days. Thanks for the prompt response savingstream
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mikes1531
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Post by mikes1531 on Oct 16, 2014 23:25:58 GMT
It would be completely against our business practices and our regulations to repay PBL001 from other loan raised funds. It would also not be in any way beneficial due to the funds then not being there when PBL11-13 needed to go live, or alternatively needed to be repaid back to investors for not going live. For update PBL001 is currently being refinanced through Kent Reliance and is with legals at the moment, we have had eyes on the offer and expect to be in funds for this loan repayment in the next few days. Thank you for the response, savingstream. It is most encouraging to learn that the PBL001 borrower is very close to refinancing their SS/Lendy loan. I look forward to seeing that happen. As for the other issue I raised, SS have made the expected response. I think we all recognise that the scenario I speculated about would be quite illegal and anyone who tried it would be out of business as soon as someone noticed what was happening. Nevertheless, we also all know that this sort of thing does happen on occasion. The perpetrators most likely end up in prison, and investors end up losing some of their money. Hopefully, the auditors and regulators are on the lookout for such activity, but I still do wonder how long practices like that could go on before they came to light. And while I realise that using PBL11-13 money to pay off PBL001 would mean the money wouldn't be available if PBL11-13 reach drawdown or were declared dead, it might be all too easy for SS to tell lenders that PBL11-13 was still progressing through not live yet, while at the same time paying off the PBL001 lenders at the specified maturity time even if the PBL001 refinancing were to be delayed, figuring that the PBL001 borrower would eventually come through -- or if they didn't, that the property could be sold -- so that the misappropriated funds could be replaced. I expect that many financial crimes of this nature start out with the perpetrator intending to repay it before anyone has a chance to notice -- just as soon as their deal/bet/gamble comes out the way they hope it will. The unfortunate events affecting PBL11-13 (reported elsewhere) have created a very awkward situation for SS. They've collected about £1M towards the funding for these loans, and they're committed to paying £5k of cashback plus £10k/month to those investors. Some/most of that would be funded by the borrower if the loan proceeded to drawdown at a normal speed, but if drawdown is considerably delayed, or if the loan applications are cancelled altogether, SS are going to have to find the money from elsewhere or renege on their promises -- and the latter could prove a fatal blow for the fledgling business. I have a lot invested in SS at the moment, and in thinking about possible consequences of the PBL11-13 news, I was struck by how much the safety of my investment depends on the trust I've put in SS being deserved. I have no reason to believe that it isn't, but it's still a sobering thought.
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oldgrumpy
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Post by oldgrumpy on Nov 1, 2014 10:15:41 GMT
The end of the world is nigh!!!!! No more boaty loans, except for the occasional super yacht!!  |
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Nov 1, 2014 10:46:25 GMT
The end of the world is nigh!!!!! No more boaty loans, except for the occasional super yacht!!  This is really bad news. It was a useful diversification from the usual p2p offerings. I can see that it was a much more fiddly way of getting business - quite a lot of boats needed to do the same amount of business as a single property deal - and clearly see the business case for SS. With FS also going headlong in this direction too, it's going to be a crowded (sic!) market.
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will
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Post by will on Nov 1, 2014 10:55:41 GMT
Well, there's always the occasional plane |
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star dust
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Post by star dust on Nov 1, 2014 10:59:08 GMT
This thread needs renaming "No More Boaty Loans".
Agree, not too happy about this, I appreciated the diversification aspect, even though the Boat loans were a smaller scale. I'm not sure how much more property backed loans I am interested in, and think I may not raise my investment level on the platform that much. On the other hand, whilst they offer 12% from initial investment and the AM remains buoyant (oh dear a watery one), then I will probably stick with them for my existing amount of investment at least. Lets hope they get a few more 'super yacht' deals.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Nov 1, 2014 11:07:24 GMT
The end of the world is nigh!!!!! No more boaty loans, except for the occasional super yacht!! This is really bad news. It was a useful diversification from the usual p2p offerings. I can see that it was a much more fiddly way of getting business - quite a lot of boats needed to do the same amount of business as a single property deal - and clearly see the business case for SS. With FS also going headlong in this direction too, it's going to be a crowded (sic!) market. I guess another P2P platform may offer boats in future. It fits the FS model well - interest only paid at the end of term. Boats seem like small fry to SS now, All the boats added together total about half the average property loan.
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oldgrumpy
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Post by oldgrumpy on Nov 1, 2014 11:11:43 GMT
It will be interesting to compare SS with AC when it comes to the repayment at the end of bridging loans. AC have a strong team; we don't know how SS's people will cope with the kind of stalling AC are experiencing with too many bridging loan repayments.
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bugs4me
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Post by bugs4me on Nov 1, 2014 11:41:00 GMT
It will be interesting to compare SS with AC when it comes to the repayment at the end of bridging loans. AC have a strong team; we don't know how SS's people will cope with the kind of stalling AC are experiencing with too many bridging loan repayments. Indeed it will be interesting. AC seem to automatically apply a default interest and then try to 'negotiate' although those bridging loans must be causing more than a few problems - think the LTV's may be put to a stress test sooner or later. How will SS cope - is there a default interest rate applicable? Will they just try and roll into a new loan? Will they go nuclear? etc, etc. Seems a shame about the boaty loans as SS are located in a good position (geographically) I would have thought and whilst they would not have provided the same level of income that property does it seems putting all eggs into one basket may not be such a good idea. On the other hand, maybe Lendy are holding onto them for themselves.
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mikes1531
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Post by mikes1531 on Nov 1, 2014 11:55:30 GMT
The end of the world is nigh!!!!! No more boaty loans, except for the occasional super yacht!! This is really bad news. It was a useful diversification from the usual p2p offerings. I can see that it was a much more fiddly way of getting business - quite a lot of boats needed to do the same amount of business as a single property deal - and clearly see the business case for SS. With FS also going headlong in this direction too, it's going to be a crowded (sic!) market. I've obviously missed an announcement somewhere. Where was it? And exactly what was it?
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This is really bad news. It was a useful diversification from the usual p2p offerings. I can see that it was a much more fiddly way of getting business - quite a lot of boats needed to do the same amount of business as a single property deal - and clearly see the business case for SS. With FS also going headlong in this direction too, it's going to be a crowded (sic!) market.
