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Post by df on May 24, 2019 19:35:39 GMT
Loan Amount
£307,750
LTV
55.95%
Investment Term
12 Months
Charge Type
1st
Exit Plan
Refinance
Interest Rate
11.00
I found it attractive, but somehow 12 months bond scenario puts me off.
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cwah
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Post by cwah on May 26, 2019 23:58:44 GMT
You can still sell it.
The fact there is no personal guarantee AND that they're going to fund another loan with potentially the same asset puts me off
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Godanubis
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Post by Godanubis on May 27, 2019 0:17:36 GMT
New independent petrol stations with no staff, automatic pumps etc are doing well as their prices are 2-4p/litre cheaper so may be a good bet for a few months.
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arby
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Post by arby on May 27, 2019 7:24:23 GMT
You can still sell it. The fact there is no personal guarantee AND that they're going to fund another loan with potentially the same asset puts me off I think it's the opposite, but I only read it quickly a few days ago. They're going to use the loan to purchase a separate site. An aditional loan will then be raised on that site.
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adrian77
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Post by adrian77 on May 27, 2019 8:23:35 GMT
don't agree a friend who knows this business said it is very tough with razor tight margins and the price is "ringed" by the big players. Also the big boys will reduce their prices in the local area if they don't like the competition.
That said I really wish this independent chap well
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cwah
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Post by cwah on May 27, 2019 8:45:29 GMT
Also if you check the business on company house, you'll see that the 2 previous owners just stayed for 1-2 years before selling. So it makes me worried that such a simple business doesn't have any account statements due to early closure in the last 5 years.
Plus that the new owner is very new to the business, doesn't have any other track record of previous business on companyhouse and take the risk to expand aggressively
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p2pstephan
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Post by p2pstephan on May 27, 2019 9:49:05 GMT
For me it’s all about the asset. The petrol station asset looked good to me, but I do recall seeing a number of abandoned petrol stations about. I’m not in because all my spare FS cash went to help a farmer buy some cows. The reasons for anyone taking loans at these rates seems strange to me so I expect to be able to fall back on the asset value in a fire sale. Petrol stations and fire sales probably do not mix well.
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adrian77
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Post by adrian77 on May 27, 2019 10:46:33 GMT
True - and if does need to be sold I don't think it is simple case of knocking it down and building on it as strict environmental surveys need to be done to make sure the land is not contaminated. In addition they may be old buried tanks etc
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iRobot
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Post by iRobot on May 27, 2019 12:36:04 GMT
New independent petrol stations with no staff, automatic pumps etc are doing well as their prices are 2-4p/litre cheaper so may be a good bet for a few months. That may be the case in general (I'd be interested to read supporting information on that claim, assuming it isn't wholly anecdotal) but it isn't the case in this instance. Using the gocompare.com fuel comparison tool, centring on the asset's postcode and applying a 10 mile radius shows this site to be joint last on pricing, with Tesco being 6p/lt cheaper. That doesn't mean this site isn't viable, and the VR makes some encouraging noises. The biggest question for me is whether FS have validated any of the financial claims. The valuer hasn't, and has stated so. FS' comment of: " The borrower is reported to be running a profitable operation to a professional standard." doesn't fill me with much confidence. The borrower is reporting 7p/lt gross profit, which on 1.5M lts per year is £105k. Have FS verified that? Are overheads covered by the gross profits? Or is it a case that after costs, that gross profit ends up being a net loss? And how about sight of the lease arrangements? And sight of the bank statements showing the rentals being received regularly, in full and on time. (Or even at all?) Maybe FS have checked all these things, and all boxes ticked.... fundingsecure?
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arby
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Post by arby on May 27, 2019 12:57:37 GMT
New independent petrol stations with no staff, automatic pumps etc are doing well as their prices are 2-4p/litre cheaper so may be a good bet for a few months. That may be the case in general (I'd be interested to read supporting information on that claim, assuming it isn't wholly anecdotal) but it isn't the case in this instance. Using the gocompare.com fuel comparison tool, centring on the asset's postcode and applying a 10 mile radius shows this site to be joint last on pricing, with Tesco being 6p/lt cheaper. That doesn't mean this site isn't viable, and the VR makes some encouraging noises. The biggest question for me is whether FS have validated any of the financial claims. The valuer hasn't, and has stated so. FS' comment of: " The borrower is reported to be running a profitable operation to a professional standard." doesn't fill me with much confidence. The borrower is reporting 7p/lt gross profit, which on 1.5M lts per year is £105k. Have FS verified that? Are overheads covered by the gross profits? Or is it a case that after costs, that gross profit ends up being a net loss? And how about sight of the lease arrangements? And sight of the bank statements showing the rentals being received regularly, in full and on time. (Or even at all?) Maybe FS have checked all these things, and all boxes ticked.... fundingsecure? You've perfectly summed up why I only gave this a cursory glance.
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Godanubis
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Post by Godanubis on May 27, 2019 13:13:53 GMT
Perhaps it’s a Scottish thing. The main fuel supplier here is setting up the stations on busy commuter roads so catch the greatest passing traffic. The nearest to me 3mls sometimes does not show on fuel comparison site although it is cheapest. ASDA usually the cheapest of the Supermarkets. With a 90 litre tank a little saving per/litre adds up to nearly an extra gallon per fill up.
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cwah
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Post by cwah on May 27, 2019 15:08:17 GMT
I initially thought this loan was a no brainer
With 56% LTV loan and a business generating £72k gross profit. I planned to put some ££ in.
But then I've read the valuation report (which reads like a template to value property but it is a business so it's absolutely not fit for purpose) and found out that this is projected income.
Then on company house there are no accounts available as the 2 previous owners closed. There are no indication that contracts have been signed with tenants either. No bills trail.
This guy has no demontrable experience as well in any business.
There are no personal guarantee on the presumed £4M not worth.
So I wouldn't invest in unfortunately.
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iRobot
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Post by iRobot on May 27, 2019 15:51:19 GMT
You can still sell it. The fact there is no personal guarantee AND that they're going to fund another loan with potentially the same asset puts me off I think it's the opposite, but I only read it quickly a few days ago. They're going to use the loan to purchase a separate site. An aditional loan will then be raised on that site. Asset is currently 100% unencumbered. This loan will be used partly refurb another site already owned by the borrower and partly to purchase a third site. A further, separate loan for £206k will be launched to raise further funds for the purchase of that third site. I'm inferring that additional loan will be wholly secured against that third site, so there will be no change to this loan's LTV. This loan's exit is a refinance but without any evidence of successful trading there can be little certainty such refinance will be forthcoming. Also, 12 months before FS even begin to think about looking at this is too long for me. fundingsecure - maybe you could do two things to make this loan more attractive: 1) advise on what scrutiny the claimed financials have been put under 2) arrange for quarterly audits of the financials going forward As things stand, not one for me.
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rs
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Post by rs on Jun 26, 2019 15:24:18 GMT
I think it's the opposite, but I only read it quickly a few days ago. They're going to use the loan to purchase a separate site. An aditional loan will then be raised on that site. Asset is currently 100% unencumbered. This loan will be used partly refurb another site already owned by the borrower and partly to purchase a third site. A further, separate loan for £206k will be launched to raise further funds for the purchase of that third site. I'm inferring that additional loan will be wholly secured against that third site, so there will be no change to this loan's LTV. This loan's exit is a refinance but without any evidence of successful trading there can be little certainty such refinance will be forthcoming. Also, 12 months before FS even begin to think about looking at this is too long for me. fundingsecure - maybe you could do two things to make this loan more attractive: 1) advise on what scrutiny the claimed financials have been put under 2) arrange for quarterly audits of the financials going forward As things stand, not one for me.
Someone has a lot of confidence in FS and the 2 petrol station loans. A nice big chunk has been invested in both loans. £185k in total from the same lender.
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ozboy
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Post by ozboy on Jun 26, 2019 16:13:58 GMT
Asset is currently 100% unencumbered. This loan will be used partly refurb another site already owned by the borrower and partly to purchase a third site. A further, separate loan for £206k will be launched to raise further funds for the purchase of that third site. I'm inferring that additional loan will be wholly secured against that third site, so there will be no change to this loan's LTV. This loan's exit is a refinance but without any evidence of successful trading there can be little certainty such refinance will be forthcoming. Also, 12 months before FS even begin to think about looking at this is too long for me. fundingsecure - maybe you could do two things to make this loan more attractive: 1) advise on what scrutiny the claimed financials have been put under 2) arrange for quarterly audits of the financials going forward As things stand, not one for me.
Someone has a lot of confidence in FS and the 2 petrol station loans. A nice big chunk has been invested in both loans. £185k in total from the same lender.
I'm always very VERY suspicious when that happens. Who knows Who? Who knows What? Who's connected with/to Who? Who has "information" provided from Who? Who is in bed with Who? Etc. I think you get my drift.
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