keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Jun 26, 2019 17:49:19 GMT
given they charge the Lender a fee of 1% the a 1.9% loan will return 0.9% lower than your local bank and building society, and as far as I can see with autobid lenders can't avoid being given a chunk if one is available.
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Post by rweb on Jul 1, 2019 8:34:15 GMT
I must admit, the autobid model, with no control other than "balanced" or "conservative" is way too limited. Autobid as a concept is reasonable, but there ought to be tresholds and greater control over the risk bands to which you are willing to loan. Otherwise you have very little control over your capital, but take the risk on capital loss.
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adrian77
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Post by adrian77 on Jul 2, 2019 21:20:43 GMT
you pay into a black box and forced to give your money away (after inflation) so FC can build up their turnover - every wondered why the share price has dropped so much. I have always said FC started off well but got greedy and they will pay the price for that. Not with my money as I have sold all my loans...
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dorset
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Post by dorset on Jul 2, 2019 21:53:47 GMT
you pay into a black box and forced to give your money away (after inflation) so FC can build up their turnover - every wondered why the share price has dropped so much. I have always said FC started off well but got greedy and they will pay the price for that. Not with my money as I have sold all my loans... No sorry FC will not pay the price. The price will be paid by the gullible saps who took up shares in the IPO. The founding shareholders have already walked away with lots of loot although salaries has been reduced from £4m to £2m.
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adrian77
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Post by adrian77 on Jul 3, 2019 6:08:58 GMT
fair point - this lot are paying themselves how much in salary !
This will go the way of Enron.
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trevor
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Post by trevor on Jul 3, 2019 9:30:39 GMT
The next AGM will be interesting. If there are any major shareholders they will be wanting someone to fall on their sword. FC is becoming more and more ripe for a takeover by the day.
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Post by shanghaiscouse on Jul 3, 2019 14:14:13 GMT
Who would want to take it over? The business model doesn't work. It loses money with no path to profit. As an independent company, it has no hope of raising equity again. Hence only option left is eventual liquidation as cash runs out and unwinding of loans (during which time bad debts will go through roof).
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ashtondav
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Post by ashtondav on Jul 3, 2019 14:52:37 GMT
Most p2p companies lose money. Zopa has been losing money since 2005 with no problem getting backers.
Amazon almost always loses money. Uber loses money. Tesla loses money. As for the business model it’s not dissimilar to the likes of Hargreaves Lansdown who cream off .45% pa from unit trust holdings and £12 (approx) on share purchases and sales. In both cases it gets the money whether you make or lose 50%.
In all cases those who back them are in for the long term, or very silly. And not many venture capitalists or big investors are silly.
I suggest a trial subscription to the FT - they’re quite good on this type of thing.
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m2btj
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Post by m2btj on Jul 3, 2019 14:56:28 GMT
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dorset
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Post by dorset on Jul 3, 2019 15:56:47 GMT
Most p2p companies lose money. Zopa has been losing money since 2005 with no problem getting backers. Amazon almost always loses money. Uber loses money. Tesla loses money. As for the business model it’s not dissimilar to the likes of Hargreaves Lansdown who cream off .45% pa from unit trust holdings and £12 (approx) on share purchases and sales. In both cases it gets the money whether you make or lose 50%. In all cases those who back them are in for the long term, or very silly. And not many venture capitalists or big investors are silly. I suggest a trial subscription to the FT - they’re quite good on this type of thing. FC must be most flattered to be grouped with Amazon. The fintech bubble has echoes of the 2000 dotcom bubble. Then as now intuitions are not immune from irrational exuberance. FC can only eventually come good if it has a coherent and robust business model. Time will tell which of us are right on that score. Cannot really see the similarity between HL and FC. HL get there commission from persuading you to bung your money into Woodford and similar but seem to make a profit doing so – a proven business model. FC takes their cut from putting your money into small businesses – an entirely different activity. The level of loans that FC will have to write to make a profit is enormous and requires spectacular growth. It is doubts about where that growth will come that has given rise to the collapse of the share price.
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adrian77
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Post by adrian77 on Jul 22, 2019 9:45:54 GMT
What assets have FC actually got apart from office furniture and a knackered computer system - as I see it a load of loans of which far to many are turning bad and as time goes one I can only see the precentage of bad debt going up...just my opinion and glad I never bought the shares (mind you would have made a killing shorting them!)
Oh sorry I forgot the large purple puppet and the ping-pong table!
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blender
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Post by blender on Jul 22, 2019 10:08:26 GMT
Most p2p companies lose money. Zopa has been losing money since 2005 with no problem getting backers. Amazon almost always loses money. Uber loses money. Tesla loses money. As for the business model it’s not dissimilar to the likes of Hargreaves Lansdown who cream off .45% pa from unit trust holdings and £12 (approx) on share purchases and sales. In both cases it gets the money whether you make or lose 50%. In all cases those who back them are in for the long term, or very silly. And not many venture capitalists or big investors are silly. I suggest a trial subscription to the FT - they’re quite good on this type of thing. FC must be most flattered to be grouped with Amazon. The fintech bubble has echoes of the 2000 dotcom bubble. Then as now intuitions are not immune from irrational exuberance. FC can only eventually come good if it has a coherent and robust business model. Time will tell which of us are right on that score. Cannot really see the similarity between HL and FC. HL get there commission from persuading you to bung your money into Woodford and similar but seem to make a profit doing so – a proven business model. FC takes their cut from putting your money into small businesses – an entirely different activity. The level of loans that FC will have to write to make a profit is enormous and requires spectacular growth. It is doubts about where that growth will come that has given rise to the collapse of the share price. The problem with the model, imo, is the 1% fee, which may not be sufficient to fund the resources needed for collections and recoveries. Their USP and their key financial asset is the non-human risk-evaluation system, which is supposed to be good enough for a financial return to be made with the current up-front fee and a 1% charge on the loan book. If it works then the computerised risk-assessment system is an asset which can be exploited in other markets, or licenced like any other software. If it does not work, and if it is found that the charge on the loan book needs to be significantly higher to keep the losses down, then the model is in trouble and the main intangible asset will be devalued. Watch out for an increase in the 1% (charged to borrowers but affecting lender's returns), which will be the sure sign of real trouble in policing the borrowers who might think that repayment of unsecured p2p loans is optional.
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djay
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Post by djay on Jul 22, 2019 10:21:01 GMT
FC must be most flattered to be grouped with Amazon. The fintech bubble has echoes of the 2000 dotcom bubble. Then as now intuitions are not immune from irrational exuberance. FC can only eventually come good if it has a coherent and robust business model. Time will tell which of us are right on that score. Cannot really see the similarity between HL and FC. HL get there commission from persuading you to bung your money into Woodford and similar but seem to make a profit doing so – a proven business model. FC takes their cut from putting your money into small businesses – an entirely different activity. The level of loans that FC will have to write to make a profit is enormous and requires spectacular growth. It is doubts about where that growth will come that has given rise to the collapse of the share price. The problem with the model, imo, is the 1% fee, which may not be sufficient to fund the resources needed for collections and recoveries. Their USP and their key financial asset is the non-human risk-evaluation system, which is supposed to be good enough for a financial return to be made with the current up-front fee and a 1% charge on the loan book. If it works then the computerised risk-assessment system is an asset which can be exploited in other markets, or licenced like any other software. If it does not work, and if it is found that the charge on the loan book needs to be significantly higher to keep the losses down, then the model is in trouble and the main intangible asset will be devalued. Watch out for an increase in the 1% (charged to borrowers but affecting lender's returns), which will be the sure sign of real trouble in policing the borrowers who might think that repayment of unsecured p2p loans is optional.
FC charge plenty of fees for recovery activities that rank before investors. "2.6. If an Event of Default has occurred and Funding Circle demands full repayment of the Total Amount Payable under clause 4.2, Funding Circle will apply any recovery payments received in the following way: the first 40% of any recovery payment to pay any administration fees or Collections Charges (any Collections Charges to be capped at 20% from any recovery payments received), costs, expenses or other fees incurred in respect of the relevant Loan, as outlined below; second, to the outstanding principal of the Loan until paid in full; third to the outstanding Accrued Interest until paid in full; and fourth, to pay any remaining administration fees or Collections Charges, costs, expenses or other fees incurred in respect of the relevant Loan, as outlined below, or otherwise as provided for in the Funding Circle Terms and Conditions."
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blender
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Post by blender on Jul 22, 2019 11:39:17 GMT
You are right djay. However 40% of nothing is nothing, and I guess that they will spend much time and cash on finding out which ones are worth bothering to chase hard and which to follow up for the benefit of the lenders seeing them doing something (ineffective). Those that are not defaulted and just late or have credit events, all need to be chased without any income for FC. I suppose they will take away the notes and the visibility of their collection/recovery work before doing anything more desperate. Now if they just made my sale as requested, I might go away and stop writing unhelpful posts.
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dorset
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Post by dorset on Jul 22, 2019 17:17:54 GMT
Just checking through my 327 defaults since 2013 (yes it is a lot with one more today - 35867).
I have as of today had 42 full recoveries which means that the borrower must have picked up the FC costs of action on these.
Recovery % to date stands at 32.3%
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