criston
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Post by criston on Jan 2, 2020 17:12:50 GMT
With less than a year keeping an eye on Ablrate & after a few gripes, I am gradually getting more confident with the management, so I am in on this one.
As others have stated movable assets are not ideal & hope Ablrate monitor the situation closely.
With eventual assets/stock of £1.9m & stock at cost (retail worth 80% more);£31k repaid before the second £500k tranche, the current LTV risk (around 50% & reducing in time) looks reasonably for a 15% return.
The £250k equity investment, retail value of stock, track record & current profitability also provide further comfort
That's my rough assessment from a quick check on the figures.
13% now invested in loan
Edit. As well as stock the company has £516k assets (type unknown)
Also PG from Director of £1.9m consisting of property portfolio.
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criston
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Post by criston on Jan 2, 2020 18:17:51 GMT
Ablrate. Could you please detail how you monitor stock with this type of loan.
What is the nature of the £516k assets.
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Post by GSV3MIaC on Jan 2, 2020 23:41:03 GMT
Not exactly flying off the shelf.
Yes, it is not exactly a dog, but has a few issues which limit its popularity, especially in the current p2p climate. None the less, I'm going to take a small punt , on the assumption ablrate keep their eyes on the ball, or at least on the boots.
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Balder
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Post by Balder on Jan 3, 2020 9:19:00 GMT
as long as they don't walk all over you..................sorry
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blender
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Post by blender on Jan 11, 2020 11:29:16 GMT
I've changed my personal decision on this one, having been very pleased to get my money on 132 back with 3 months' interest instant returns. The trouble with retailers and stock as security is that they have no saleable fixed assets and if they do fail you tend to find that when they default there is not much stock value left and the pg has evaporated (or that is the tradition at FC - anyone remember designer jeans?). At least this is amortising. So I have reviewed this as an unsecured risk, with any security as a bonus, and it looks genuine and straightforward and run by people who have expertise and commitment in a well-established business. It is nearly at the min of £250k and will draw down as advertised. So my higher-risk allocation has gone in for 15%.
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criston
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Post by criston on Jan 11, 2020 12:06:43 GMT
Not all stock.
Never did get an answer from Ablrate on the nature of the £516k assets.
Nor how they intend to monitor stock.
'The current book value of the Company’s current assets is £961k, of which £445k is stock'.
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blender
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Post by blender on Jan 11, 2020 13:09:15 GMT
Not all stock. Never did get an answer from Ablrate on the nature of the £516k assets. Nor how they intend to monitor stock. 'The current book value of the Company’s current assets is £961k, of which £445k is stock'. Hi Criston.
On the first point, Ablrate do not usually reply to requests where the info is in the documents. For the breakdown of the £961k current assets you need page 2 of the 2019 Management accounts. It is the usual stuff you would expect for a retailer, but nothing concrete. The separate fixed assets are very small. These current assets are of course relevant to the debenture, but what matters there is the asset values if and when the company defaults. The £961k is more relevant to your evaluation of the current health of the company and its ability to make the repayments, imo (which is probably why you wish to see the info).
On the second point, I do not think they have any intention of monitoring stocks, other than through filed accounts and credit ratings, unless there is a credit event. There is only point in monitoring if you can take some action, and I cannot see Ablrate wishing to intervene in valuation and stock control of ladies fashion shoes, not the company agreeing to it. They are paying over 20% amortising and giving a debenture and a PG. I think they will be allowed to manage their own business, as long as they make the payments. Fortunately this is not FC, and instead of a computerised sorting hat you have a very much better evaluation done by a platform where every default is taken as a personal insult, rather than just part of the stats. That does not mean it is safe.
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criston
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Post by criston on Jan 11, 2020 13:37:12 GMT
Not all stock. Never did get an answer from Ablrate on the nature of the £516k assets. Nor how they intend to monitor stock. 'The current book value of the Company’s current assets is £961k, of which £445k is stock'. Hi Criston.
On the first point, Ablrate do not usually reply to requests where the info is in the documents. For the breakdown of the £961k current assets you need page 2 of the 2019 Management accounts. It is the usual stuff you would expect for a retailer, but nothing concrete. The separate fixed assets are very small. These current assets are of course relevant to the debenture, but what matters there is the asset values if and when the company defaults. The £961k is more relevant to your evaluation of the current health of the company and its ability to make the repayments, imo (which is probably why you wish to see the info).
On the second point, I do not think they have any intention of monitoring stocks, other than through filed accounts and credit ratings, unless there is a credit event. There is only point in monitoring if you can take some action, and I cannot see Ablrate wishing to intervene in valuation and stock control of ladies fashion shoes, not the company agreeing to it. They are paying over 20% amortising and giving a debenture and a PG. I think they will be allowed to manage their own business, as long as they make the payments. Fortunately this is not FC, and instead of a computerised sorting hat you have a very much better evaluation done by a platform where every default is taken as a personal insult, rather than just part of the stats. That does not mean it is safe.
Missed that. Thanks. Majority of assets are debtors then.
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blender
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Post by blender on Jan 11, 2020 13:53:15 GMT
Yes, and I should have noted how much of that is trade debtors, presumably wholesale.
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r00lish67
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Post by r00lish67 on Jan 11, 2020 14:56:05 GMT
Interesting to compare this one with a typical LendingCrowd retail loan.
Many retail LC loans are rated risk band C+ (the highest risk band). A typical example is a £159k loan to an online apparel retailer. Their borrowing rate is 12.53%, and the platform admin fee is a one-off 5%, same as Ablrate. There's no ongoing fee to the borrower, that comes from the lender's cut.
So, as the ablrate ongoing charge to the borrower is 19% p.a vs 12.53%, does it suggest that this loan may be higher risk than LC's lowest risk band? Or perhaps the borrower (ironically) hasn't shopped around?
Another more likely factor might be the loan size - LC don't often offer even £500k, especially at their highest risk band. This chap is after £1m all told which I think is where the risk comes in. If not enough fancy shoes move quickly out of the door, then obvs that interest is going to mount up fast.
For me, the value of the proposition looks okay and the business proposition looks a genuine one that (unusually for Ablrate) is also easy to understand for simple brains like mine. I quite like it instinctively. But, with a high risk of default, and a probable low amount of recovery if that were to happen, my head says no. At the moment I also don't fancy additional P2P platform risk very much (just generally speaking).
If I could diversify this a'la LC with 199 other similar loans at 15%, then that would seem a good proposition. I'd rather have some guaranteed defaults and a net return of perhaps 6-7% than the all or nearly-nothing situation this one is likely to be.
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blender
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Post by blender on Jan 11, 2020 17:25:50 GMT
Good points r00lish67. Some points in support: These are highly experienced shoe people who will be screwed if their business fails, rather than finance people looking to gain, or dump the losses and move on. The minimum is £250k and I do not think they will get near £1m on this platform in these market conditions. There is a secondary market if it starts to look uncomfortable.
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blender
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Post by blender on Apr 24, 2020 15:24:07 GMT
I hope this pays today. I had some cash resting on this loan for a few months until the sky fell in elsewhere, and I found I should not let it get to this date and become illiquid. Thanks to those who purchased my stake and I sincerely hope it keeps paying and/or the discount comes good in time.
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nw99
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Post by nw99 on Apr 24, 2020 19:33:50 GMT
Bought this at 0.75 sold out at 0.92 now buyers back in for loans good to see
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blender
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Post by blender on Apr 25, 2020 7:24:36 GMT
Bought this at 0.75 sold out at 0.92 now buyers back in for loans good to see Yes, it is good that there are traders on the platform who will provide liquidity and take risks. If I were a buyer, I am not sure I would rely 100% on statements from traders about their trading.
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dusty
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Post by dusty on Apr 25, 2020 11:25:53 GMT
I found the risk palatable purchasing the available loan parts between 75-80% and will continue to do so at those levels.
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