Post by thehappy1nvestor on Sept 16, 2014 19:14:25 GMT
www.fundingcircle.com/blog/2014/09/improvements-borrower-application-process/
"[W]e have been reviewing our processes when a business applies to us, and will be making some changes to the information investors see on the loan description page."
"Previously we have required businesses that do not already have management accounts prepared, to produce them before applying for a Funding Circle loan. This can be a lengthy and expensive process for borrowers, particularly non-limited businesses, who often incur significant costs from their accountants as part of the process.
In order to support more businesses, we are amending this requirement. We will now require businesses to provide us with recent bank statements (typically three months) with every application."
I hope this doesn't mean lowering pre-listing check standards if they no longer always require management accounts for YTD (if I've understood this correctly), rather 3m bank statements instead.
"In certain cases we may collect YTD management accounts, for instance where there has been a long time since the end of the last financial year and where we do this we will display more recent financial information to investors." What does "a long time" mean?
"We will still continue to collect financials for the last two fully completed financial years for the business based on their published year end dates (filed or management)." They at least still require 2yrs filed/ management statements, although I've always thought more should be presented if available.
"Over the next few weeks we will start to require borrowers to provide the total amount of further debt taken out in the last 12 months over £25,000, rather than broken down by specific types of finance. We are making this change to help streamline the application process and avoid duplication."
They're also saying they will only require borrowers to disclose loans taken out in last 12m over £25k as we investors can see previous loans in liabilities of last set of filed accounts. Surely this leaves a rather large potential hole between year end and the filing of those accounts?
"As well as enabling more businesses on to the marketplace by providing a smoother and quicker application experience, introducing these changes gives our credit assessment team greater flexibility when dealing with business applications, and ensures we remain competitive in the market. It’s important to note that we will always assess a business’ ability to repay a loan, and only list those that pass our credit assessment."
This is clearly a case of cutting corners to get more loans through the door, but as to whether those "corners" are reasonable or unnecessary in providing lenders with sufficient information, I would appreciate hearing the opinions of those more qualified than me! I'm all for seeing more loans, but not if the quality of information provided to lenders is diminished.
"[W]e have been reviewing our processes when a business applies to us, and will be making some changes to the information investors see on the loan description page."
"Previously we have required businesses that do not already have management accounts prepared, to produce them before applying for a Funding Circle loan. This can be a lengthy and expensive process for borrowers, particularly non-limited businesses, who often incur significant costs from their accountants as part of the process.
In order to support more businesses, we are amending this requirement. We will now require businesses to provide us with recent bank statements (typically three months) with every application."
I hope this doesn't mean lowering pre-listing check standards if they no longer always require management accounts for YTD (if I've understood this correctly), rather 3m bank statements instead.
"In certain cases we may collect YTD management accounts, for instance where there has been a long time since the end of the last financial year and where we do this we will display more recent financial information to investors." What does "a long time" mean?
"We will still continue to collect financials for the last two fully completed financial years for the business based on their published year end dates (filed or management)." They at least still require 2yrs filed/ management statements, although I've always thought more should be presented if available.
"Over the next few weeks we will start to require borrowers to provide the total amount of further debt taken out in the last 12 months over £25,000, rather than broken down by specific types of finance. We are making this change to help streamline the application process and avoid duplication."
They're also saying they will only require borrowers to disclose loans taken out in last 12m over £25k as we investors can see previous loans in liabilities of last set of filed accounts. Surely this leaves a rather large potential hole between year end and the filing of those accounts?
"As well as enabling more businesses on to the marketplace by providing a smoother and quicker application experience, introducing these changes gives our credit assessment team greater flexibility when dealing with business applications, and ensures we remain competitive in the market. It’s important to note that we will always assess a business’ ability to repay a loan, and only list those that pass our credit assessment."
This is clearly a case of cutting corners to get more loans through the door, but as to whether those "corners" are reasonable or unnecessary in providing lenders with sufficient information, I would appreciate hearing the opinions of those more qualified than me! I'm all for seeing more loans, but not if the quality of information provided to lenders is diminished.
