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Post by alexp2p on May 1, 2019 6:41:59 GMT
The Fulham loan is only secured with the first legal charge, but not a debenture.
So only one safety net.
Loans looks sensible, just in case some things go wrong...
What is the opinion of others about security?
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eeyore
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Post by eeyore on May 1, 2019 11:33:49 GMT
The Fulham loan is only secured with the first legal charge, but not a debenture. The borrower is an individual not a corporate body. I assume that Proplend decided that the charge on the asset (the property) was sufficient without a personal guarantee. Seems reasonable to me.
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Post by proplend on May 1, 2019 12:01:53 GMT
That's right, as this is a loan to an individual they are essentially providing a 100% personal guarantee and a debenture wouldn't be relevant. Richard
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liso
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Post by liso on May 1, 2019 14:05:39 GMT
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eeyore
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Post by eeyore on May 1, 2019 14:17:13 GMT
That's right, as this is a loan to an individual they are essentially providing a 100% personal guarantee and a debenture wouldn't be relevant. Richard What do you mean by "essentially providing a 100% personal guarantee"? My understanding of other P2P loans is that personal guarantees and debentures are in addition to a charge upon an asset. So, if there is no specific personal guarantee or debenture, what happens after a loan defaults if the funds recovered from a sale of the asset are less than the value of the loan? I've assumed that the lenders will make a loss, there's no other opportunity for recovery - is that not correct?
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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 May 1, 2019 14:45:06 GMT
If the loan defaults and the asset doesnt realise sufficient then they will pursue the borrower personally. Anyone borrowing in a personal capacity is automatically a guarantor of the loan as the agreement is with them and they are the one agreeing to repay whether through realisation of the security or other means, unlike a loan to a company, where a PG has be secured as a separate legal agreement because there is no direct legal liability. Hence in this case the borrower is 'essentially' 100% guarantor as they are automatically liable for the full amount. Doesnt guarentee they will pay.
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Post by mrclondon on Oct 10, 2019 20:03:07 GMT
I walked past this one this afternoon at c.4:30pm , roughly five months after the loan (to purchase it) drew down. The original retail branding is still present, the open mesh security grill was down, and no signs of life. However, plenty of evidence of builders / building materials - two rolls of Rockwool and various sheet material leant against the ground floor windows, and a step ladder visible through the 1st floor window. Sat in the middle of the ground floor were a pair of white goods (dishwasher ? washing machine ? ) The intent was that the property would be let (as office space ?) to an organisation of which the borrower is CEO for around two years before applying for development finance for the conversion to 3 flats. Hard to say if the current works are an initial refurb prior to occupation as offices (if so it seems a bit slow ) or the start of the conversion to residential.
One thing that isn't clear to me is whether the borrower's intended tenant would fall within the current Class A1 usage (shops) as intuitively it feels to me to be A2 usage (professional services) or B1 (offices). I can't see any planning application for such usage.
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eeyore
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Post by eeyore on Jun 26, 2020 7:21:25 GMT
This loan (PLL0883) was redeemed in full yesterday (25-June-2020) with an early redemption fee.
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Post by overthehill on Jun 26, 2020 14:29:39 GMT
Not sure this has happened often or at all, does the early redemption fee go to Proplend or is it shared with investors?
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rs
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Post by rs on Jun 26, 2020 15:27:49 GMT
Shared with investors but Proplend get a cut (i think 10% of the early redemption fee).
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eeyore
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Post by eeyore on Jun 27, 2020 11:40:54 GMT
Lenders received a 1% Early Redemption fee, from which Proplend deducted their usual 10% fees, leaving a net £9 for each £1,000 loan. The terms for any early repayment of a loan are usually stated in the original Loan Request document.
I'm assuming that the £9 "compensation" for an early repayment needs to be declared to HMRC as income.
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