Got an ad on Facebook for this new marketplace called Lendermarket. They have a ton of similitarities with Mintos, and right now, it appears as if the only loans on the market are from Creditstar - a "partner" of the market.
Is this CreditStar trying to create its own platform to avoid Mintos' fees? It has better rates than in Mintos, CreditStar only offers 12% on the Estonian loans, all the other countries' CreditStar pay less. On this market, every loan (for now) is paying 12%, all of them with a buyback guarantee.
Ok, I've created an account. The verification process uses the exact same company (Veriff). Their autoinvest profiles only allow you to invest into countries and not different companies, meaning it most likely is a CreditStar owned market.
Regarding deposits, they seem to be using a 3rd party company that creates bank accounts for them, you can check the company out at fire.com
I just performed some due diligence on Lendermarket and I see a lot of credit risk and tax risk
I know the Irish market very well since I had some substantial investments until a few months ago and I do not like it at all since the Irish government loves big multinationals and loves to screw private investors and SMEs. My investments went well only because when I originally invested I made use of some tax exemptions.
Lendermarket Limited is legally incorporated in Ireland and their legal address is the adddress of this company registration entinty:
So while Creditstar AS (the group) has a decent balance sheet, with Lendermarket you run a very high platform risk due to their tiny equity.
Finally the tax situation in Ireland is very bad for non resident or resident lenders to private companies or private individuals (this is different for some big multinationals or funds who make use of some important exemptions to the standard rules), I suggest to read this document in full:
"How is the earned income taxed? The Lender shall be fully responsible for paying all taxes arising from any repayments obtained as a result of its investment based on legislation of respective country. All repayments will be paid from Lendermarket to the lender bank account without any deduction or withholding for or on account of any tax."
But then it says:
"Lendermarket does not provide any tax advisory services to the investors and we strongly suggest seeking for professional tax advice."
Well according to Revenue Lendermarket should withold tax at 20% (standard Irish income tax rate) on the interest payments to the investors (resident or non resident, it does not matter) and then provide an R185 form to the investor at the end of each year. However even worse (and this is where the Irish are really screwing SMEs and private investors alike), to be fully compliant the investor (even non resident!!!) should then request a non resident PPSN number and perform an Irish income tax declaration where the Irish government will take another slice of the interest with the abusive (for a non resident since it receives no social benefits in Ireland) Universal Social Charge and all the bureaucracy associated (obviously presenting the R185 to claim credit for the income tax already withheld. You can then request a credit of all these taxes to your country of origin tax authority (which might not accept them!). This means that investing in an Irish P2P platform is VERY TAX INEFFICIENT!
Of course if you do not have an Irish bank account or any other assets in Ireland and Lendermarket is not audited by Revenue (given their small size) and your residency country does not have a tax treaty with Ireland that allows enforcement of Irish tax claims in your country then your risk is limited since in general since the Irish Revenue has no power to enforce claims outside Ireland that are not of a criminal nature:
There are a few Irish Revenue rules (and more with respect to direct investments) that run contrary to EU treaties like differential treatment for residents and non residents which is strictly prohibited in EU law and they still try it on, but then avoid prosecutions I believe because they know they are on the wrong side of EU law and do not want to make it public, in Spain instead the situation is much worse, the tax authorities of various autonomous regions are so stupid to prosecute and then loose, making very public their thieving behaviour and receiving warnings and penalties from the EU. However this Irish tax rule on P2P lending is treating residents and non residents equally, so I very much doubt it can be challenged.
the investor (even non resident!!!) should then request a non resident PPSN number and perform an Irish income tax declaration where the Irish government will take another slice of the interest with the abusive (for a non resident since it receives no social benefits in Ireland) Universal Social Charge and all the bureaucracy associated (obviously presenting the R185 to claim credit for the income tax already withheld.
Good info jmot . It's puzzling why they chose to incorporate this in Ireland when they themselves are in the Baltics like most other P2P platforms. If this amount of bureaucratic hassle is really needed, I predict this platform will attract about 5 investors in total.
I also I directed a couple of questions to Credistar regarding the company and their position on Mintos, this was the response
Thank you for your questions. Lendermarket is a sister company of Creditstar Group AS. Creditstar is not planning to withdraw the loans from Mintos platform. Listing the loans on Lendermarket platform serves the purpose of diversifying funding sources amongst different platforms.
Continuing on my due diligence of Creditstar. The holding company Creditstar AS is a PLC (not a limited) based in Estonia and has got a decent balance sheet (given the fact that in 2018 they raised their equity by 2M eur) and decent disclosure given the fact that public companies are forced by law to provide a decent amount of audited reports.
Instead I have serious concerns with respect to Creditstar Spain Limited, I have an approx 3k position in Mintos on the loans of this Creditstar subsidiary (almost 250 small loans which is a statistically significant sample even though the time concentration of the purchase might bias the results) that were purchased in the last two weeks of July: every single loan of this subsidiary is late (16-30days and soon it will go over). I do not really understand what their game is with the Spanish loans, because 100% delayed loans is a strong indication of serious financial issues in their Spanish company.
There is a group guarantee, but I look at the stats here: thesmartinvestor.eu/mintos-helper/ and for Creditstar Spain SL short term loans (the persona loans issued amount is tiny so it does not count) I see really bad stats:
Current 48.51% Grace 2.49% 1-15 days 21.38% 16-30days 2.39% 31-60days 25.24% 60+ days 0%
It looks like Creditstar Spain SL keeps selling loans (the recent ones are current) and then the vast majority are not repaid until the buyback guarantee kicks in (maybe the group guarantee, I do not know if it is possible to know which Creditstar entity is actually repaying the loans). This is worrying me and I stopped investing any money into Creditstar Spain loans even though it has a group guarantee.
Does anyone have any idea of what is happening to Creditstar Spain? I noticed that all the other subsidiaries of Creditstar and the holding company have much better stats then the Spanish subsidiary.
Does anyone know if the group guarantee can be cancelled for loans that have been sold in the past?