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Post by Invest&Fund on Sept 23, 2014 10:29:53 GMT
Calling all lenders - we are curious about influences within P2x lending and would love to hear your opinions
When making your investment decisions, what factors influence your choice to lend to an SME borrower the most?
Is it purely based upon the terms of the loan, or does it also depend on the industry/location in which the borrower operates?
Feel free to discuss/debate below!
Looking forward to hearing your views,
I&F
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shimself
Member of DD Central
Posts: 2,563 
Likes: 1,171
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Post by shimself on Sept 23, 2014 14:11:58 GMT
SME’s – erm, what I think (and I have owned and run such, succesfully, and worked for both good and bad, including failures)
Do I like the business, if I don't like it (arms trade or IFA say) then no.
It’s good if the boss understands the books (I don’t know I’ll have to ask the accountant isn’t a good sign to me).
It’s bad if the company cars are flash. Look at directors drawings, is it being plundered? How reliant are they on this company?
Fixed assets and inventory (and a large %age of receivables) are worthless in the event of a liquidation, and apparently so are PGs which rely on the house. An explanation as to how the PG would be payable is very welcome.
I would like to see trading history for at least three years, or the length of the loan if longer. How reliant on one or two major customers are they, is it all about price or do they have some edge.
Particularly on longer loans some signs of resourcefulness are a good thing.
Affordability obviously.
Not propositions which should really be equity offerings (eg this new expensive project when succesful will make us millionaires)
I look at all the Q&A, and forum comments, other people's insights count for a lot
Some protection against a delayed drawdown is welcome.
Duration (5yr interest only for an SME would have to have a great PG)
Rate
Some investment by the platform/sponsor is welcome.
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Post by Invest&Fund on Sept 25, 2014 12:41:25 GMT
Thanks for your comments shimself, lots of interesting insights! Does anyone else have any differing thoughts? |
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surby
Minor shareholder in Assetz Capital
Posts: 32
Likes: 18
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Post by surby on Sept 25, 2014 13:48:49 GMT
Thanks for your comments shimself, lots of interesting insights! Does anyone else have any differing thoughts? Similar thoughts. The track record of the platform and sponsor (if any) are foremost in my consideration. How transparent are they? Do they keep investors informed when things do not go to plan, as well as when they do? Are loans drawn down on time or not and are repayments made on time. If not, is there a mechanism for paying compensation to investors? I like lots of information to assess the proposition and, as shimself says, the ability to ask questions and review (timely) answers is really useful. Asset-backing is obviously a plus but I'm sceptical about PGs. A solid trading record and an experienced management team is worth far more IMHO.
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Post by webbski9 on Sept 25, 2014 15:09:33 GMT
Security is all. 10% and above is now regularly available on good sites. Backed by 1st or 2nd charge on property whether that be a home or a business location.In the case of Savings Stream with boats and planes. Frankly none of this is rocket science.And lets not forget a slick, workable website.
Of course all the comments above are also relevant .
And the best sites have Very liquid Secondary Markets.
One final point there really is no need to demand £5 or £10k minimums.
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Post by webbski9 on Sept 25, 2014 15:11:33 GMT
Sorry, in the case of security charges on planes etc I meant Albrate
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Post by Invest&Fund on Oct 2, 2014 9:17:23 GMT
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