Investor Security

I've actually sold some pennies due to this issue. Would happily re-purchase said pennies &provide brothers & sisters pennies in addition when trust is set up! Though, considering hoe active SM is currently, SS will be in no big hurry to get a move on as liquidity is not an issue. Someone will always pick up the pieces.

Current Structure

Saving Stream investors lend to Lendy Ltd for a 12% return. Lendy Ltd then lends to borrowers at a higher rate of return. Lendy Ltd takes legal charge/mortgage over the security. Currently Lendy Ltd offer to cover any eventuality where an investor's capital and interest is not fully repaid.

The Provision Fund -  www.savingstream.co.uk/provision-fund

Today Saving Stream will be launching the 'Saving Stream Provision Fund'. Our Provision Fund is a discretionary fund that the shareholders of Lendy Ltd have created for the purpose of compensating investors should a shortfall exist during the disposal of any security held by Lendy Ltd. Our Provision Fund is a UK based company called Lendy Provision Reserve Limited and its Directors will consider requests made on behalf of the customers of Lendy Ltd if a loan were ever to default and the disposal of the security was insufficient to cover investor capital. In the interests of disclosure it should be noted that the Directors of Lendy Ltd are also the Directors of Lendy Provision Reserve Limited.

Proposed New Trust Structure

Lendy Ltd have currently engaged Grant Thornton to setup a new structure where pooled Saving Stream investors will take direct security over each asset/property. This has been requested by investors and is in true P2P style, rather than Lendy Ltd holding the security. The discussed proposal is such that the Provision Fund will exist to cover any potential shortfall that may occur during disposal, however any shortfall beyond the value of the Provision Fund, will not be covered by Lendy Ltd and will be born as a loss by the collective investors in that loan. We hope to have a more formal response to this next week once GT have come back with their full proposal.

<abbr>This is going to put a few Smiles onto peoples faces me thinks  </abbr>
Maybe any interest that can be earned from uninvested funds could be put into the Provision Fund. That way all investors would at times be making small contributions. I can't imagine anyone would object to that. Maybe even the 0.5% cashback could be directed there too.
 Now I'm sure there will be a few comments about that..

savingstream:  Was the omission at the end of the above sentence of the critical words "and accrued interest" accidental or deliberate?

If a borrower fails to repay, and a loan is declared to be a default and the property has to be sold, there is bound to be a significant delay before the security is turned into cash and investors receive any money back.  I would guess that three months is an optimistic estimate and six months might be reasonable, though my experience at AC suggests that even six months might be optimistic.  During that time, a fair amount of interest will have accrued, and if the PF isn't expected to cover the inability of sale proceeds to pay that, then the PF at SS isn't as useful as the PFs at other P2P platforms.

I do hope this was just an accidental omission.