debeast
(o)(o)
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Post by debeast on Dec 9, 2013 8:51:08 GMT
well from my quick scan: I'd rate the security on this as poor. Second hand lens making equipment etc. ? Regardless of what the report says, I'd be wary of expectation of recoverable value. Debenture covering debtor book? If the business is/does go into decline, its of limited value. Of course it is all still better than nowt. Compensated by the rate of course. I have to say I'm not terribly keen on the habit Assetz has of putting up long'ish term loans (5 years) which are 'close to but not quite' interest only loans. Its a strange hybrid they use, and kicks the risk profile up a fair bit when the term is that long. But maybe that's what's differntiating them. I'd also like to see a more detail on what was so 'inappropriate' about the original loan that was being taken out, and what it was taken out for, and what the exit charges are on that loan. At the end of this refinance, the company will still have a substantil debt: so what was the money original used for and what was the useful life of the investment made from that money relative to the balance of loan that will be outstanding in 5 yeas time. Notice its Ludgate as sponsor: kind of interesting, raises other questions in my head (not bad ones I hasten to add, just questions...) That was my question  Its always nice to see that they may be getting rid of existing debt by consolidating but details details details Ludgate?? /beastie
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debeast
(o)(o)
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Post by debeast on Dec 9, 2013 8:57:31 GMT
It wasn't meant to be personal Chris - I apologise if it came across that way. Also apologies to Mike for taking his post out of context. No worries, I'm just the computer geek anyway so technically not my department (in this instance) that's being criticised I didn't take it personally, I just know how hard the rest of the team are working trying to bring quality loans to the platform that have had all the correct due diligence done on them including site visits, where some platforms are just churning through the loans doing little more than looking at a computerised report from a credit reference agency, and so I leapt to their defence. You are right to make demands of us though - the best way we can improve our service will be to listen to the suggestions made by our users. At the moment the Q&A system does operate a queue within our admin site and emails the RMs to let them know that there are questions pending, but there will no doubt be refinements that we can make to make sure that questions are answered promptly. I'll investigate these over the coming weeks with the rest of the team. Well while we've got you here is it feasible possible to get a nice little link auto generated that takes us to duedil. I mean i could open the website , login copy and paste the company name. Hit search , click on the right one and browse the results but a little button would be nicer and save me 30 seconds /beastie
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Post by chris on Dec 9, 2013 9:05:11 GMT
I've created a ticket in our to do list.
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Post by bracknellboy on Dec 9, 2013 10:03:22 GMT
They are an active sponsor of loans to Thin Cats. So its kind of intriguing as to why they took this one to Assetz rather than TC.
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mikes1531
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Post by mikes1531 on Dec 9, 2013 19:45:53 GMT
I don't have a problem with the fee being hidden or disclosed so I'm fairly neutral about this. It all depends on the return being offered (to myself). In this case though the AC slice is approx 8.5% which doesn't appear excessive. I wouldn't be too concerned if I knew the fee was consistently 1% p.a. of the loan amount or 8.5% of the interest I was earning but, unfortunately, it's not. It's variable. On one loan I looked at, the borrower was paying 12% interest and the lenders were getting 10%, so in that case Assetz was getting 20% of what the lenders were getting. That struck me as rather a lot, and I'd like to be told what Assetz are getting from each deal rather than having to put the numbers into a spreadsheet and work it out myself. Transparency! Where I do have a query has always been on directors personal guarantees. Assets which exist today can sometimes go wandering during the loan term so effectively the DG's end up being worthless if the worst comes to the worst. In this case, on the surface, the DG's appear limited so I may pass on this one especially as there doesn't appear to be a great deal of comfort regarding future trading projections. I have heard others express similar views about DGs. In this particular case, I submitted a question -- "The value of the personal guarantee lies in the owners' equity in their residence. Is there anything in the proposed loan agreement that would prevent them from increasing the size of the mortgage on their home and thus reducing their equity?" The answer was no, which is what I was afraid of. If the borrowers' business was suffering, and they were worried that the DG was going to be called on, then I'd expect them to take action. Even if they don't do something underhanded, like giving the equity in their house to their children, I'd expect them to use their personal assets to support their business through its rough patch (since there'd be no point in hesitating to do that because they'd probably lose their assets if the DG was invoked). If that solved the problem, then great. If it doesn't, however, and the business continues to make losses, by the time the loan goes into default the directors would have no assets left -- at which point the DG would be worthless.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Dec 9, 2013 20:11:22 GMT
I don't have a problem with the fee being hidden or disclosed so I'm fairly neutral about this. It all depends on the return being offered (to myself). In this case though the AC slice is approx 8.5% which doesn't appear excessive. I wouldn't be too concerned if I knew the fee was consistently 1% p.a. of the loan amount or 8.5% of the interest I was earning but, unfortunately, it's not. It's variable. On one loan I looked at, the borrower was paying 12% interest and the lenders were getting 10%, so in that case Assetz was getting 20% of what the lenders were getting. That struck me as rather a lot, and I'd like to be told what Assetz are getting from each deal rather than having to put the numbers into a spreadsheet and work it out myself. Transparency! Where I do have a query has always been on directors personal guarantees. Assets which exist today can sometimes go wandering during the loan term so effectively the DG's end up being worthless if the worst comes to the worst. In this case, on the surface, the DG's appear limited so I may pass on this one especially as there doesn't appear to be a great deal of comfort regarding future trading projections. I have heard others express similar views about DGs. In this particular case, I submitted a question -- "The value of the personal guarantee lies in the owners' equity in their residence. Is there anything in the proposed loan agreement that would prevent them from increasing the size of the mortgage on their home and thus reducing their equity?" The answer was no, which is what I was afraid of. If the borrowers' business was suffering, and they were worried that the DG was going to be called on, then I'd expect them to take action. Even if they don't do something underhanded, like giving the equity in their house to their children, I'd expect them to use their personal assets to support their business through its rough patch (since there'd be no point in hesitating to do that because they'd probably lose their assets if the DG was invoked). If that solved the problem, then great. If it doesn't, however, and the business continues to make losses, by the time the loan goes into default the directors would have no assets left -- at which point the DG would be worthless. I accept all that you say having been stung hard recently on FC by so called directors DG's, I too an cautious. However, all of these high interest bearing loans on here and on other P2B's because the risks are high. The question for investors is quite simple is the balance of risk met by the rate of interest on offer? My guess in this particular case is that views will be split. I don't know where but some putting money believing it to be a good investment whilst others will be keeping their cash in their pocket. I guess we will get to find out how quick this offer fills in a few days!
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pikestaff
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Post by pikestaff on Dec 9, 2013 20:18:20 GMT
Merlin, your part of the above post seems to be missing.
Admin, is it possible to make quoting more user friendly so that it is easier to edit quotes. I would like the ability to just highlight the part that i want to quote (a la Wordpress) rather than be forced to quote the whole lot and then struggle to remove the quotes within the quote (hope you know what I mean),
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pikestaff
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Post by pikestaff on Dec 9, 2013 20:22:23 GMT
They are an active sponsor of loans to Thin Cats. So its kind of intriguing as to why they took this one to Assetz rather than TC. Not the first that they have taken to Assetz. K+ is also theirs. The worry is Assetz might be getting the rejects, but I think Ludgate are too professional and careful of their reputation for that. It would indeed be interesting to know.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Dec 9, 2013 20:28:31 GMT
Hi Pikestaff
I was busy trying to edit the quotes and lost the lot. Now corrected but thanks for telling me.
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bugs4me
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Post by bugs4me on Dec 9, 2013 22:27:52 GMT
I accept all that you say having been stung hard recently on FC by so called directors DG's, I too an cautious. However, all of these high interest bearing loans on here and on other P2B's because the risks are high. The question for investors is quite simple is the balance of risk met by the rate of interest on offer? My guess in this particular case is that views will be split. I don't know where but some putting money believing it to be a good investment whilst others will be keeping their cash in their pocket. I guess we will get to find out how quick this offer fills in a few days! These aren't necessarily high interest loans when you factor in some of the hidden charges made by high street banks - documentation fees, arrangement fees, monthly monitoring charges, etc, etc. Plus of course jumping through the hoops of the big computer in the sky with a bank credit system - say no more. Each loan request must be taken on it's own merits and I would have thought that a second charge on directors fixed personal assets would have added a degree of confidence. As someone else remarked - what price second hand specialised lens equipment. Plus capturing the debtors book is fine provided it is still worth capturing. Just me playing devil's advocate here
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
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Post by merlin on Dec 9, 2013 23:18:25 GMT
I accept all that you say having been stung hard recently on FC by so called directors DG's, I too an cautious. However, all of these high interest bearing loans on here and on other P2B's because the risks are high. The question for investors is quite simple is the balance of risk met by the rate of interest on offer? My guess in this particular case is that views will be split. I don't know where but some putting money believing it to be a good investment whilst others will be keeping their cash in their pocket. I guess we will get to find out how quick this offer fills in a few days! These aren't necessarily high interest loans when you factor in some of the hidden charges made by high street banks - documentation fees, arrangement fees, monthly monitoring charges, etc, etc. Plus of course jumping through the hoops of the big computer in the sky with a bank credit system - say no more. Each loan request must be taken on it's own merits and I would have thought that a second charge on directors fixed personal assets would have added a degree of confidence. As someone else remarked - what price second hand specialised lens equipment. Plus capturing the debtors book is fine provided it is still worth capturing. Just me playing devil's advocate here I love people playing devil's advocate and as some will be aware I have done so often on here. I had hoped that my post would get a debate going on what was the right level of interest to attract investors. My guess is that at 15% it would have been filled by now but at 10% it may have struggled right through to the end. So what figure would hang your hat on?
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mark
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Post by mark on Dec 10, 2013 1:52:44 GMT
Regarding the PG from the Directors and their property, here is my response to my question to AC
mark asks: "Regarding the PG from the directors and their residential property. Would it be possible to secure a second charge on the property rather than a weaker security of a PG agreement.
."Assetz Capital answers: "There have been positive indications from the valuers that the plant and machinery provides good security for this loan (report to be provided as soon as it is available), and as such a second charge on the guarantors residential property does not form part of the security package for this loan."
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mikes1531
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Post by mikes1531 on Dec 10, 2013 3:26:07 GMT
Admin, is it possible to make quoting more user friendly so that it is easier to edit quotes. I would like the ability to just highlight the part that i want to quote (a la Wordpress) rather than be forced to quote the whole lot and then struggle to remove the quotes within the quote (hope you know what I mean), This probably belongs in a "Suggested Improvements" thread, but here it is anyway... I would dearly love to have a "Multi-quote" button so that I could reply to more than one quote in a single message. As it is, you can't even do a simple Cut/Paste without having to resort to dealing with the 'BBCode'.
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mikes1531
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Post by mikes1531 on Dec 10, 2013 3:39:21 GMT
mark asks: "Regarding the PG from the directors and their residential property. Would it be possible to secure a second charge on the property rather than a weaker security of a PG agreement. ."Assetz Capital answers: "There have been positive indications from the valuers that the plant and machinery provides good security for this loan (report to be provided as soon as it is available), and as such a second charge on the guarantors residential property does not form part of the security package for this loan." This is all fine as long as the company continues to trade well -- and nobody comes along and invents a new piece of equipment that make some of the existing equipment obsolete. In answer to a question from me, Assetz confirmed that, without having a second charge on their property, there's nothing to stop the owners from mortgaging their home so that the equity backing the DG disappears. I feel this loan is going to struggle to be be funded, and that obtaining a second charge on the property would solve that in a hurry. It could well be cheaper than calling in the underwriters or increasing the interest rate on the loan. We're obviously going to have to wait a while to find out if this is correct, but I note that there's been a distinct absence of large bids for this loan, and I think that may be telling us something.
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oldgrumpy
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Post by oldgrumpy on Dec 10, 2013 8:58:18 GMT
"I note that there's been a distinct absence of large bids for this loan, and I think that may be telling us something".
It could mean that no one will put in a large bid two weeks earlier than necessary, adding that time to a possible four weeks (or more) to drawdown with 0% interest. I wonder if it is allowed to shadow bid then pay two weeks later? I'm not at all certain of the rules for shadow bids.
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Its always nice to see that they may be getting rid of existing debt by consolidating but details details details 
