SteveT
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Post by SteveT on Aug 14, 2019 16:49:51 GMT
Except MT say in the FAQs that they won't lend more than 90% of the costs incurred. Do the Maths You seem to be implying that the 90% lending limit relates to the cash sum advanced to the borrower (after initial fees and interest are retained), not the full value of the loan. I very much doubt this is the case. The actual wording from the FAQ's is " as a general rule we will only look to lend up to 70% LTV on the current value AND up to 90% against what has been paid for and spent on the site" (my highlighting). The word "lend" can only relate to the value of the loan (£1.55m in this case), this being the capital sum that the borrower must repay on redemption. The fact that part of this sum is retained by MT at drawdown to cover interest during the term (rather than the borrower paying interest out of his own pocket) does nothing to reduce the value of the loan. The clear inference from MT's FAQ response is that the borrower has spent at least £1.72m on the site to date. I dare say SophieThing or MoneyThing will clarify if this is not the case.
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trevor
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Post by trevor on Aug 14, 2019 17:25:00 GMT
When MT announced their new strategy I said at the time it will be interesting to compare the lower risk lower interest with AC. I much prefer AC 8% 65% LTV to this loan. Sorry MT, bargepole needed.
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Post by MoneyThing on Aug 14, 2019 19:10:01 GMT
You seem to be implying that the 90% lending limit relates to the cash sum advanced to the borrower (after initial fees and interest are retained), not the full value of the loan. I very much doubt this is the case. The actual wording from the FAQ's is " as a general rule we will only look to lend up to 70% LTV on the current value AND up to 90% against what has been paid for and spent on the site" (my highlighting). The word "lend" can only relate to the value of the loan (£1.55m in this case), this being the capital sum that the borrower must repay on redemption. The fact that part of this sum is retained by MT at drawdown to cover interest during the term (rather than the borrower paying interest out of his own pocket) does nothing to reduce the value of the loan. The clear inference from MT's FAQ response is that the borrower has spent at least £1.72m on the site to date. I dare say SophieThing or MoneyThing will clarify if this is not the case. Evening, I can confirm that the borrower has spent at least £1.72m on the site to date. We will be adding further FAQs to the listing in the morning, including confirmation of the above. Kind regards, Ed
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dovap
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Post by dovap on Aug 14, 2019 19:33:15 GMT
must have been handing out fivers to passing HGV drivers -
expensive whatever it's been spent on
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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 Aug 14, 2019 19:46:57 GMT
Price quoted was ex VAT so that sticks 20% on it straight off plus any purchase fees, legals etc.
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jcb208
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Post by jcb208 on Aug 15, 2019 5:33:58 GMT
The world of P2P has finally woken up and now no longer investing in assets with crazy valuations with little chance of full return in a fire sale.Absolutely zero chance of this offering being filled, Moneything might as well pull it now
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Post by Badly Drawn Stickman on Aug 15, 2019 6:37:16 GMT
Price quoted was ex VAT so that sticks 20% on it straight off plus any purchase fees, legals etc. Why would there be VAT on this purchase? Presumably if there was then the new purchaser is actually going to pay 7.2 million I am indifferent enough to believe the borrower may have had outgoings totaling more than the loan offered, but would suggest that is due to servicing loans to date as opposed to adding any value to the asset (which is the implication from the MT forum comment).
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Post by mrclondon on Aug 15, 2019 9:06:13 GMT
Price quoted was ex VAT so that sticks 20% on it straight off plus any purchase fees, legals etc. Why would there be VAT on this purchase? Presumably if there was then the new purchaser is actually going to pay 7.2 million
The subject of VAT on the sale of commercial buildings is complex
and will depend in part on whether the seller is VAT registered (our borrower is).
It would be helpful if MT confirmed whether VAT was or wasn't paid.
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withnell
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Post by withnell on Aug 15, 2019 9:34:56 GMT
The borrower (as a VAT reg business) would be able to reclaim the VAT - there's a funding gap for the few months while the cogs turn at HMRC (which is why you get several specialist short-term VAT funders) but the net outlay would be £1m
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invester
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Post by invester on Aug 15, 2019 9:46:49 GMT
So basically, the covenant applies within the letter of the law (costs inclusive of VAT) but not the spirit of it (VAT reclaimed at a later date).
It just seems surprising to me that MT think that this type of investment opportunity is what lenders want.
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Post by dan1 on Aug 15, 2019 9:59:11 GMT
The borrower (as a VAT reg business) would be able to reclaim the VAT - there's a funding gap for the few months while the cogs turn at HMRC (which is why you get several specialist short-term VAT funders) but the net outlay would be £1m Reclaimed from expenditure on the site (I'm struggling to think what qualifies?) or registering with HMRC to charge VAT on the sale as per VI's post?
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withnell
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Post by withnell on Aug 15, 2019 10:34:14 GMT
The borrower (as a VAT reg business) would be able to reclaim the VAT - there's a funding gap for the few months while the cogs turn at HMRC (which is why you get several specialist short-term VAT funders) but the net outlay would be £1m Reclaimed from expenditure on the site (I'm struggling to think what qualifies?) or registering with HMRC to charge VAT on the sale as per VI's post? Reclaimed as a lump sum - the VAT registered buyer (our borrower) can apply to HMRC to reclaim the 200k VAT paid on purchase - process takes a few months. No need to sell the property. Example of a VAT funder with a bit of info: vatbridge.com/about/
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Post by spareapennyor2 on Aug 15, 2019 12:29:18 GMT
updated FAQ`S on site
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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 Aug 15, 2019 13:33:14 GMT
Vat paid.
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Post by mrclondon on Aug 15, 2019 14:22:45 GMT
The world of P2P has finally woken up and now no longer investing in assets with crazy valuations with little chance of full return in a fire sale. If only it were that simple ... Proplend have funded a £1.4m loan in less than 10 minutes this afternoon (A tranche 11.25% 50% LTV / B tranche 15.45% 65% LTV before PL fee deduction) secured against 2 commercial premises with permission for religious use (and in use by a religious charity). At one of the sites the buildings are fit for nothing but demolition. No current or previous permissions exist for redevelopment to residential but that is what the valuer implies would be the most appropriate use for the sites if placed on the open market.
I have a niggling concern that too many lenders regard the past history of a p2p platform with regard to defaults as a major factor when deciding whether or not to lend on any given loan. Any relatively new platform will of course have had very few defaults (1 in the case of PL declared recently).
I'm completely bemused by the speed with which that PL loan has just filled, the VR's didn't sugar coat / spin the assets. Which makes it very difficult for MT to predict the appetite for any given loan on their platform.
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