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Post by Ace on Feb 7, 2020 16:54:59 GMT
I'm confused by their headline claims that lenders have earned between 12% and 16% so far, yet their forecast returns are up to 5.8%.
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benaj
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Post by benaj on Feb 7, 2020 17:00:15 GMT
Cheaper than bank overdraft? borrow up to 2k. It comes with a mastercard???
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keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Feb 7, 2020 17:24:46 GMT
I'm confused by their headline claims that lenders have earned between 12% and 16% so far, yet their forecast returns are up to 5.8%. Think they are saying lenders make 12-16% but borrowers pay 5.8% sounds like a recipe for disaster
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cb25
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Post by cb25 on Feb 7, 2020 17:40:40 GMT
I'm confused by their headline claims that lenders have earned between 12% and 16% so far, yet their forecast returns are up to 5.8%. Think they are saying lenders make 12-16% but borrowers pay 5.8% sounds like a recipe for disaster This states "Your Investment ... Earn returns of up to 5.8% per year", and 5.8% is shown as the Target Return for 3 years (lower for 6mths, 1yr, 2yr)
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Post by Ace on Feb 7, 2020 18:37:07 GMT
This states "Your Investment ... Earn returns of up to 5.8% per year", and 5.8% is shown as the Target Return for 3 years (lower for 6mths, 1yr, 2yr) 12% - 16% Average returns earned so far by lenders on Elfin Market. I'll guess someone will come along with direct experience if we wait long enough.
I found an answer on Seedrs. It says that: 5.8% is the borrower's representative APR. Which means that 51% of borrowers get that rate or lower. However, the average borrower APR is much higher. Forecast lender returns are up to 5.8%, but, so far, delinquency and default rates have been so low that lenders have been achieving the 12 to 16% stated. Presumably, they are effectively saying that they don't expect to maintain these rates going forwards.
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benaj
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Post by benaj on Feb 7, 2020 19:28:10 GMT
12% - 16% Average returns earned so far by lenders on Elfin Market. I'll guess someone will come along with direct experience if we wait long enough.
I found an answer on Seedrs. It says that: 5.8% is the borrower's representative APR. Which means that 51% of borrowers get that rate or lower. However, the average borrower APR is much higher. Forecast lender returns are up to 5.8%, but, so far, delinquency and default rates have been so low that lenders have been achieving the 12 to 16% stated. Presumably, they are effectively saying that they don't expect to maintain these rates going forwards. Ever lower than 5.8% So this platform make 1.5% service fee and also offer 0% loan. It’s a money tree 🤣 "My credit card has a 0% rate introductory offer on purchases and/or balance transfers, - do you plan to offer a similar 0% rate on the Elfin Purse?"
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Post by Ace on Feb 7, 2020 20:29:39 GMT
To clarify, I meant:
Presumably, they are effectively saying that they don't expect to maintain these [12 to 16%] rates going forwards [as they are now forecasting "up to 5.8%" retutns].
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Post by wiseclerk on Feb 7, 2020 21:14:19 GMT
12% - 16% Average returns earned so far by lenders on Elfin Market. I'll guess someone will come along with direct experience if we wait long enough.
I found an answer on Seedrs. It says that: 5.8% is the borrower's representative APR. Which means that 51% of borrowers get that rate or lower. However, the average borrower APR is much higher. Forecast lender returns are up to 5.8%, but, so far, delinquency and default rates have been so low that lenders have been achieving the 12 to 16% stated. Presumably, they are effectively saying that they don't expect to maintain these rates going forwards. Since you already quoted this non-public answer:
I presume they are saying: 51% borrow(ed) at 5.8% APR (or less) 49% borrow(ed) at a much higher APR (think 21.8% for example) if defaults are very low then this could result in 12 to 16% returns (despite the 1.5% fee, at least initially until defaults rise.
So the main point is that the 5.8% APR advertised is the median not the average (which is also mentioned in the answer)
I invested a small amount in the campaign to see how it develops in future.
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benaj
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Post by benaj on Feb 8, 2020 5:16:11 GMT
I think that encompasses my view. If they achieved the median (forecast) 5.8% on a sustainable basis, post delinquency, it would be attactive. The higher average would be great, but I'd expect defaults to rise over time and that rate to fall. So, from a lenders perspective it could be attractive even at the "up to" forecast. From the point of view of an equity holder the capital light structure could work. The down side of course is they need volume on both sides of the transaction.
I think investing a small amout, as I think of it a "page holder", is a sensible approach.
I'm interested in seeing how it works out. I suspect it won't be the last time they do a pre "A" round.
www.seedrs.com/elfin-marketAfter watching the campaign video, it seems that's something about the 5.8%. Equity offered: 5.80% Average APR: 5.8% 3 year target return: 5.8% I start wondering what the significance of 5.8? It's almost like someone quoting the significance of 786. Lending volume wise, it's comparable to another Level 39 Fin-tech I know for the first few months @ much cheaper rate. Let's wish this team of 3 can deliver an app, the "elfin card", customer service and driving volume at the same time. I still have no idea what the "Elfin card" is, Elfin market aims to make credit card borrowing fairer and more user friendly. Is Elfin card a debit card or credit card? I don't know, it seems Elfin card may not offer the same consumer protection as a typical credit card.
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Post by herringbone on Feb 8, 2020 10:23:15 GMT
What happens if you pay the balance off within the month?
I think you still pay interest. That bit was glossed over
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Post by theitalianleathersof on Feb 8, 2020 19:56:47 GMT
To me it is a no for both side, the equity investor (via seedrs) and the loan investor via their platform: - Equity: if everything goes according to their plan, the potential audience is not that big (you can borrow only up to 2k, low rate means very strict checks), it is hard to scale, benefit is almost all to borrowers who enjoy cheaper rates; plus customer acquisition costs are high in the sector - Loan investor: if their credit model does not work as planned, investors have a thin margin to cover losses theitalianleathersofa.com/elfin-market-a-buy-or-a-sell/
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Post by herringbone on Feb 8, 2020 20:34:50 GMT
Am I misunderstanding something here?
Investment sought £400,004 Equity offered 5.80% Valuation pre-money £6,502,400
Six and a half BILLION?
Is any p2p company worth six and a half billion, let alone a start up?
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iRobot
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Post by iRobot on Feb 8, 2020 20:44:36 GMT
Am I misunderstanding something here?
Investment sought £400,004 Equity offered 5.80% Valuation pre-money £6,502,400
Six and a half BILLION?
Is any p2p company worth six and a half billion, let alone a start up?
Think you might be missing a zero or three?
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Post by herringbone on Feb 8, 2020 21:09:11 GMT
Am I misunderstanding something here?
Investment sought £400,004 Equity offered 5.80% Valuation pre-money £6,502,400
Six and a half BILLION?
Is any p2p company worth six and a half billion, let alone a start up?
Think you might be missing a zero or three? Or several million brain cells D'OH
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Post by Mansour B on Feb 11, 2020 19:42:53 GMT
Hi guys! I'm the co-founder of Elfin Market. Nice to see a whole thread about us here Thanks to those of you who invested in our Seedrs campaign, and welcome on board! I notice most of the questions have already been answered, but I thought I would clarify a couple of things. In no particular order: - The Elfin Purse (our borrower product) is a form of revolving credit. As treetophugger noted, the comparison with a corporate version of revolving credit is pretty apt. Withdrawing is done via bank transfer, so unlike a credit card, you don't actually need to buy something in order to use the funds. This form of flexible credit has typically only been available to corporations and not to retail customers, and we're trying to change that. - The Elfin Card is a physical card we're working on, which we plan to introduce as another way of withdrawing from the Elfin Purse (in addition to bank transfers). It will be neither a credit card nor a debit card: technically it will be a prepaid card, except it won't be reloadable. Instead, it will connect to our p2p platform so that every time the cardholder pays with the card, the transaction will be paid for by borrowing the amount from lenders on the platform. It will not have the typical consumer protection that comes with credit cards, you were correct on that point.
- The max credit limit at £2k is temporary, that's because we're just getting started and we don't have a huge amount of lender funds yet, so low credit limits allow us to diversify better. As we grow credit limits will increase.
Feel free to ask if you have more questions, I'll make sure to check this forum in the coming days!
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