Yacht (and vehicle) P2P Pawn Broking

Call me cynical, but I highly doubt I'll be welcome old chap!

I did ask James if he was going...
I guess not then.

And yes, he did actually sign off this own answer to my question, which was really odd as we were speaking face-to-face. That James, what a player. Women want to be with him, men want to be him. He's so dreamy.

Here's a couple of other things you could discuss, though I see no reason why SS couldn't address these issues here and now...

At the moment, there's about £100k of loans available for people to take up.  Once that's gone, nothing further could be invested in SS until Lendy Marine make another loan.  So what I'm wondering is whether Lendy have a history of having to turn down borrowers because they didn't have the money to lend?  What prompts this question is that they clearly had access to £664k of funds in order to make the loan on the 35m Superyacht.  The fact that there's none of that loan available right now suggests that they've found investors to take that loan from them, so they ought to have the resources to be able to make another £500k of loans.  The fact that they have so little available for investors right now suggests that there isn't a queue of borrowers at the door.

Anyway, that's the way it looks to me.  I'd welcome others' interpretations of what we see on the SS website.  Not to mention input from SS themselves.

Also, how seasonal is the boat loan market?  In the depth of winter I don't suppose it's a big hardship for a boat owner to forgo access to their boat, but I'd expect the situation to be very different in the summer.  Will there be people wanting to borrow against their boats in the spring if it means they can't use them during the height of the boating season?

Which brings up a related question...  When someone finances the purchase of a car, they get to use it while they have the loan.  I'd expect that the same would apply when someone buys a boat.  So why would a boat owner be willing to pay 4%/month -- and also lose the use of their boat -- if they could have a 'conventional' loan, pay less interest, and use their boat as well?   Is it simply because conventional loans have a big set-up fee that makes them very expensive for the type of short-term loans that Lendy make?

The only platform I've seen thus far that has attempted anything with the FCA logo is one of the very recent startups eMoneyUnion on their blog page (click on the embedded image to get a better view).  To be fair, a few of the other platforms have mentioned they have received interim approval, and this is indeed one of my questions for SS as the current batch of 7 month loans may still be running when the new regulation regime kicks in.

For those that want something to read over the Christmas break   the relevant parts of the FCA website are here and here

If Lendy has satisfied all the available demand then, yes, there's no point giving away 12% p.a. to SS lenders.  But the suggestion has been that Lendy had to stop lending because they had used up their available funds.  In that case, paying 12% to free up capital that they can re-lend at 4%/month is a bit of a no-brainer, isn't it?   If there are more borrowers out there willing to pay 4%/month, then Lendy would have a huge incentive to encourage 12% SS lenders to provide the funds so they can make their 3%/month margin on all they can obtain from SS lenders.  That's part of the reason I want to know if the demand exists for Lendy to make more loans if they had more funds available. 

It's very much like the FS situation -- I'm sure they'd love to have more loans to offer their lenders because it means more profit for them.  It seems clear from the scrums that occur whenever they do have a loan to fund that there is a fair supply of lender money available.  So the FS problem is that there aren't enough borrowers, and I'm trying to determine whether Lendy/SS is in a similar situation.

It's possible that much of the money Lendy currently has lent out is still their money rather than outside lenders (either via SS or from sources that pre-date SS).  If James Marshall does exist he's likely to be one of the latter, because I don't believe SS really existed in its current form back in Feb.'13 when he made his (in)famous testimonial.  (I trust you've noticed that the date disappeared when the website was revamped.)  If it is Lendy money, then we shouldn't be surprised that they want to keep the most secure loans to themselves -- though if you accept their guarantee to keep SS lenders safe from losses even if the security turns out not to be sufficient in the case of a defaulting borrower then it wouldn't matter which loans Lendy kept.

The critical question is...  What will happen if SS does get off the ground and the £100k of loans currently available is taken up by SS lenders?  Will new loans appear that offer further investment opportunities?  Or will the current holders of some of the loans that currently show as not available -- possibly including Lendy themselves -- release some more of those loans to SS lenders.  If they can't keep a steady supply of investment opportunities available, they'll run into the problem FS now have -- waning interest from investors because there's nothing to invest in.  It doesn't make any difference if the product is brilliant -- you have to have some available to sell or your customers will go elsewhere, probably never to return.

Thanks for your input -- it helps us understand the situation and the development of Lendy/SS better.  The advance notice of loans in the 'pipeline' is also useful, and a positive change.  Thanks for adding that.

One question still outstanding is the seasonality of Lendy's business.  As I wrote before, "In the depth of winter I don't suppose it's a big hardship for a boat owner to forgo access to their boat, but I'd expect the situation to be very different in the summer. Will there be people wanting to borrow against their boats in the spring if it means they can't use them during the height of the boating season?"  Does Lendy have enough experience, or access to info from other marine pawnbrokers -- are there any? -- to be able to comment on this?  From a SS investor's point of view, if money invested now will end up coming back in the spring and there aren't likely to be other loans to invest in at the time because the business goes slack over the summer, then that's something to know in advance rather than being surprised by a bunch of paid off loans and having to 'park' the money elsewhere until business picks up again in the autumn.

If they do run out of loans to fund you could always take the money out and put it in another P2P until there is.

Marine pawnbroking is a relatively new concept. As far as we are aware Lendy Marine is the only company specialising in it. Borro (the UK's largest online pawnbroker) usually pass their marine leads directly to Lendy. Since Lendy has only been trading for a little over a year, we do not have a wealth of seasonal data to drawn upon. We can understand people's concerns over seasonality but have generally found that if a customer wants to pawn their boat at a rate of 4%/month then it is because of a reason greater than purely the fact that it is the winter and they are not using it. It is usually because of a business necessity or bridging requirements that could occur any time during the year. There are also other factors such as how much Lendy spends on marketing as to how many loan enquiries it receives. Lendy it also going to be launching separate websites specialising in the classic/prestige car sector plus aviation sectors to increase and diversify the assets that it lends against.