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Post by ronaldyoung on Mar 17, 2020 20:44:21 GMT
It's a good point df and can see your line of thinking. I don't however believe that this was the intention of the platform prior to this event and still clearly states 'In order to turn on reinvestment, you need to pass the investor test.' Attachments:
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delboy
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Post by delboy on Mar 17, 2020 21:49:11 GMT
Have had a look at this tonight. I've not bothered to do their FCA test online as I didn't intend to reinvest. Granted I understand their position in needing the liquidity however what are peoples thoughts about them turning on my reinvestment settings without my first passing this test? In my view (and yes, I know I have agreed to it in their terms and conditions so I should have read it with more care) this is completely unreasonable! It's one thing to freeze withdrawals, but forcing investors to reinvest their capital against their will seems like an incredibly unfair condition. I can't see how they can enter me into a loan agreement that I don't want to be a party to. T&Cs or no T&Cs, I would like to see what the FCA / Ombudsman has to say about this kind of practice.
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alender
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Post by alender on Mar 18, 2020 9:02:07 GMT
Have had a look at this tonight. I've not bothered to do their FCA test online as I didn't intend to reinvest. Granted I understand their position in needing the liquidity however what are peoples thoughts about them turning on my reinvestment settings without my first passing this test? In my view (and yes, I know I have agreed to it in their terms and conditions so I should have read it with more care) this is completely unreasonable! It's one thing to freeze withdrawals, but forcing investors to reinvest their capital against their will seems like an incredibly unfair condition. I can't see how they can enter me into a loan agreement that I don't want to be a party to. T&Cs or no T&Cs, I would like to see what the FCA / Ombudsman has to say about this kind of practice. Although I have passed the test I do not believe GS have the right to change my investment settings or to block me setting my investment setting to not re-invest interest and/or capital. I have raised this complaint with GS but they say it is in their terms and conditions, I have therefore taken this to the Financial Ombudsman.
In addition to this Growth Street have also now blocked the option to cancel money on the Market i.e. my money not on loan, not earning interest waiting to be lent to a borrower. As this is my money I do not believe Growth Street have to right to take this money and lend it to who they like without my permission.
On the Logon screen it states
"Your capital is at risk if you lend to businesses. P2P lending is not covered by the Financial Services Compensation Scheme. FIND OUT MORE"
Now your Capital repayments, Holding account funds and interest paid on your Loans are also at risk.
This is a extract from my complaint:
I can understand that it is difficult for Growth Street to maintain withdrawals from Loans that are part way through as this would involve selling the loan and there are few if any buyers. However as I understand the situation the loans are not the property of Growth Street but are owned by the lenders. Therefore the capital repayments and interest are the property of the lenders not Growth Street (less commission/costs on the interest), therefore Growth Street has no right to decide on what happens to these funds. Although there is a provision fund which as I understand is funded by fees to the borrower and/or the differential in interest rate paid by the Borrower and paid to the Lender if too many loans default and the provision fund is exhausted it is the Lender that takes the haircut. Also as this is known and advertised as Peer to Peer lending all of this evidence points to the fact that the loans are owned by the Lenders.
GS have been harder on the investors than AC and RS, AC allow the withdrawal of Interest and Capital and will have a queueing system for exit from the access accounts on Thursday, RS are processing some withdrawals with other waiting. The companies that survive this crisis may well be the ones who treat their customers the best during these times.
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withnell
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Post by withnell on Mar 18, 2020 9:13:25 GMT
GS have been harder on the investors than AC and RS, AC allow the withdrawal of Interest and Capital and will have a queueing system for exit from the access accounts on Thursday, RS are processing some withdrawals with other waiting. The companies that survive this crisis may well be the ones who treat their customers the best during these times.
AC allow the withdrawal of free cash, which GS are also doing. Both are restricting withdrawals from the underling investment portfolios, and are retaining cash repayments from borrowers coming in. We have yet to see whether AC will pay interest payments as cash on 1st April While the 30day concept seems nice, the borrowers aren't transferring the full value of the loan back and re-borrowing each month - it's a balancing concept similar to a bank where long term mortgage loans are funded by short term deposits. Because GS is relatively very small, it doesn't take a lot to knock them off balance in terms of investment liquidity, and they rely on a majority of reinvestment
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alender
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Post by alender on Mar 18, 2020 9:33:10 GMT
GS have been harder on the investors than AC and RS, AC allow the withdrawal of Interest and Capital and will have a queueing system for exit from the access accounts on Thursday, RS are processing some withdrawals with other waiting. The companies that survive this crisis may well be the ones who treat their customers the best during these times.
AC allow the withdrawal of free cash, which GS are also doing. Both are restricting withdrawals from the underling investment portfolios, and are retaining cash repayments from borrowers coming in. We have yet to see whether AC will pay interest payments as cash on 1st April I have been assured by AC that any payment of Capital and Interest (which as you say will be on 1st April) will be placed in the Cash account (if you have requested this in your setting), I have no reason to doubt them and can only hope they are as good as their word, if they do not I believe there is a strong case to take to the FCA. On the other hand GS have changed my settings and frozen everything for at least 90 days.
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Post by Harland Kearney on Mar 18, 2020 12:22:07 GMT
We have had repayments of both Capital and interest from the Closed GBBA accounts and MLA. So they are still paying, I imagine they will be paying on the 1st of April intrerest from the access accounts would follow, it will likely increase liquidity of the site too I imagine.
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Greenwood2
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Post by Greenwood2 on Mar 18, 2020 14:47:54 GMT
In my view (and yes, I know I have agreed to it in their terms and conditions so I should have read it with more care) this is completely unreasonable! It's one thing to freeze withdrawals, but forcing investors to reinvest their capital against their will seems like an incredibly unfair condition. I can't see how they can enter me into a loan agreement that I don't want to be a party to. T&Cs or no T&Cs, I would like to see what the FCA / Ombudsman has to say about this kind of practice. Although I have passed the test I do not believe GS have the right to change my investment settings or to block me setting my investment setting to not re-invest interest and/or capital. I have raised this complaint with GS but they say it is in their terms and conditions, I have therefore taken this to the Financial Ombudsman.
In addition to this Growth Street have also now blocked the option to cancel money on the Market i.e. my money not on loan, not earning interest waiting to be lent to a borrower. As this is my money I do not believe Growth Street have to right to take this money and lend it to who they like without my permission.
On the Logon screen it states
"Your capital is at risk if you lend to businesses. P2P lending is not covered by the Financial Services Compensation Scheme. FIND OUT MORE"
Now your Capital repayments, Holding account funds and interest paid on your Loans are also at risk.
This is a extract from my complaint:
I can understand that it is difficult for Growth Street to maintain withdrawals from Loans that are part way through as this would involve selling the loan and there are few if any buyers. However as I understand the situation the loans are not the property of Growth Street but are owned by the lenders. Therefore the capital repayments and interest are the property of the lenders not Growth Street (less commission/costs on the interest), therefore Growth Street has no right to decide on what happens to these funds. Although there is a provision fund which as I understand is funded by fees to the borrower and/or the differential in interest rate paid by the Borrower and paid to the Lender if too many loans default and the provision fund is exhausted it is the Lender that takes the haircut. Also as this is known and advertised as Peer to Peer lending all of this evidence points to the fact that the loans are owned by the Lenders.
GS have been harder on the investors than AC and RS, AC allow the withdrawal of Interest and Capital and will have a queueing system for exit from the access accounts on Thursday, RS are processing some withdrawals with other waiting. The companies that survive this crisis may well be the ones who treat their customers the best during these times.
The trouble for GS is that although the loans look like monthly loans to lenders they are long term credit lines to borrowers. GS can't suddenly demand the funds back from borrowers just because a lot of lenders suddenly want to get their funds out. I assume they are hoping borrowers will be able to arrange alternative finance in the 90 days of the liquidity event or GS themselves raise other funds to cover the loans. But I would think it inevitable that as soon as GS try to go back to normal running of the platform many more lenders will want to remove funds.
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Post by nesako on Mar 18, 2020 15:01:13 GMT
I also had my funds scheduled to "leave" in just under a week by disabling re-investment and like many others have it all stuck now for an unknown period of time.
It is not great, but I believe GS did react to loss in liquidity fast enough for us to have a chance to get out of this without declaring the resolution event - which we really all want to avoid. My thinking matches the previous post in that loads of people will again try to withdraw as soon as it will be made possible (if!), and we will be then back to where we are now.
Unless company impose some sort of queuing system or limit amounts allowed to be withdrawn after liquidity has been sorted, we have a high chance pushing this all to the resolution event which may result in up to 5-year wait (some loans will be as long as this) and capital losses (given current statistics + administration costs to manage this, this is pretty much guaranteed). I really hope GS will think of a way to control this in the end and we will be back "to normal" at some point.
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Post by ronaldyoung on Mar 18, 2020 15:16:47 GMT
I also had my funds scheduled to "leave" in just under a week by disabling re-investment and like many others have it all stuck now for an unknown period of time. It is not great, but I believe GS did react to loss in liquidity fast enough for us to have a chance to get out of this without declaring the resolution event - which we really all want to avoid. My thinking matches the previous post in that loads of people will again try to withdraw as soon as it will be made possible (if!), and we will be then back to where we are now. Unless company impose some sort of queuing system or limit amounts allowed to be withdrawn after liquidity has been sorted, we have a high chance pushing this all to the resolution event which may result in up to 5-year wait (some loans will be as long as this) and capital losses (given current statistics + administration costs to manage this, this is pretty much guaranteed). I really hope GS will think of a way to control this in the end and we will be back "to normal" at some point. That seems like quite the worst case scenario wouldn't you say? I spoke to them today about this, they seem reasonable to be fair although could not offer more guidance than previously provided.
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Post by nesako on Mar 18, 2020 15:23:47 GMT
I also had my funds scheduled to "leave" in just under a week by disabling re-investment and like many others have it all stuck now for an unknown period of time. It is not great, but I believe GS did react to loss in liquidity fast enough for us to have a chance to get out of this without declaring the resolution event - which we really all want to avoid. My thinking matches the previous post in that loads of people will again try to withdraw as soon as it will be made possible (if!), and we will be then back to where we are now. Unless company impose some sort of queuing system or limit amounts allowed to be withdrawn after liquidity has been sorted, we have a high chance pushing this all to the resolution event which may result in up to 5-year wait (some loans will be as long as this) and capital losses (given current statistics + administration costs to manage this, this is pretty much guaranteed). I really hope GS will think of a way to control this in the end and we will be back "to normal" at some point. That seems like quite the worst case scenario wouldn't you say? I spoke to them today about this, they seem reasonable to be fair although could not offer more guidance than previously provided. Yes indeed - but unfortunately me being generally an optimistic person I still give it (Resolution even) 50/50 chance of happening, unless GS change the withdraw process to allow for queuing (to follow the likes of Assetz and RS). PS. I would rather sit 6-9 months in the queue waiting for my money than go through the resolution event and get losses...
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alender
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Post by alender on Mar 18, 2020 18:15:19 GMT
Although I have passed the test I do not believe GS have the right to change my investment settings or to block me setting my investment setting to not re-invest interest and/or capital. I have raised this complaint with GS but they say it is in their terms and conditions, I have therefore taken this to the Financial Ombudsman.
In addition to this Growth Street have also now blocked the option to cancel money on the Market i.e. my money not on loan, not earning interest waiting to be lent to a borrower. As this is my money I do not believe Growth Street have to right to take this money and lend it to who they like without my permission.
On the Logon screen it states
"Your capital is at risk if you lend to businesses. P2P lending is not covered by the Financial Services Compensation Scheme. FIND OUT MORE"
Now your Capital repayments, Holding account funds and interest paid on your Loans are also at risk.
This is a extract from my complaint:
I can understand that it is difficult for Growth Street to maintain withdrawals from Loans that are part way through as this would involve selling the loan and there are few if any buyers. However as I understand the situation the loans are not the property of Growth Street but are owned by the lenders. Therefore the capital repayments and interest are the property of the lenders not Growth Street (less commission/costs on the interest), therefore Growth Street has no right to decide on what happens to these funds. Although there is a provision fund which as I understand is funded by fees to the borrower and/or the differential in interest rate paid by the Borrower and paid to the Lender if too many loans default and the provision fund is exhausted it is the Lender that takes the haircut. Also as this is known and advertised as Peer to Peer lending all of this evidence points to the fact that the loans are owned by the Lenders.
GS have been harder on the investors than AC and RS, AC allow the withdrawal of Interest and Capital and will have a queueing system for exit from the access accounts on Thursday, RS are processing some withdrawals with other waiting. The companies that survive this crisis may well be the ones who treat their customers the best during these times.
The trouble for GS is that although the loans look like monthly loans to lenders they are long term credit lines to borrowers. GS can't suddenly demand the funds back from borrowers just because a lot of lenders suddenly want to get their funds out. I assume they are hoping borrowers will be able to arrange alternative finance in the 90 days of the liquidity event or GS themselves raise other funds to cover the loans. But I would think it inevitable that as soon as GS try to go back to normal running of the platform many more lenders will want to remove funds. There seems to be some misunderstanding in what I have said, I am not asking that GS demand the funds back from Borrowers; I am asking that the interest and/or capital repayments be available for release by Lenders if they so chose as it is their money. There is a question of where this money is going, as far as I am aware the administration fees are covered by upfront fees to the Borrowers and the differential of interest rates between the Lenders and the Borrowers.
If I was allowed to withdraw Interest and/or Capital repayments I would feel a lot more comfortable with leaving my funds in GS, I might well keep my balance at a level where I can get my full bonus. Before this event I had the setting to repay interest not capital and had not put notice in to withdraw funds so I did not contribute to the liquidity crisis.
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Greenwood2
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Post by Greenwood2 on Mar 19, 2020 8:26:46 GMT
The trouble for GS is that although the loans look like monthly loans to lenders they are long term credit lines to borrowers. GS can't suddenly demand the funds back from borrowers just because a lot of lenders suddenly want to get their funds out. I assume they are hoping borrowers will be able to arrange alternative finance in the 90 days of the liquidity event or GS themselves raise other funds to cover the loans. But I would think it inevitable that as soon as GS try to go back to normal running of the platform many more lenders will want to remove funds. There seems to be some misunderstanding in what I have said, I am not asking that GS demand the funds back from Borrowers; I am asking that the interest and/or capital repayments be available for release by Lenders if they so chose as it is their money. There is a question of where this money is going, as far as I am aware the administration fees are covered by upfront fees to the Borrowers and the differential of interest rates between the Lenders and the Borrowers.
If I was allowed to withdraw Interest and/or Capital repayments I would feel a lot more comfortable with leaving my funds in GS, I might well keep my balance at a level where I can get my full bonus. Before this event I had the setting to repay interest not capital and had not put notice in to withdraw funds so I did not contribute to the liquidity crisis.
As I understand it, but I am no expert! Although you see a capital repayment, the borrower is (probably) continuing their line of credit into the next month and will have immediately effectively re-borrowed the funds, if GS suddenly have to pay out a lot of funds to lenders there will not be enough to keep their agreements with the borrowers. As long as there are new lender funds exceeding the demand to withdraw everything is fine, if new funds dry up and a lot of lenders want to withdraw the business model is compromised (a liquidity crisis). To keep funding the current borrowers GS needs to keep lender capital repayments on the platform to roll into the next months demand. I can see a case for GS letting lenders withdraw interest as that should be excess to requirements to fund the current borrowers, although I believe the borrowers line of credit is flexible up to a prearranged limit so if they are not using it all they may be able to increase their loan requirement eating into the interest repayments as well.
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alender
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Post by alender on Mar 19, 2020 9:03:20 GMT
There seems to be some misunderstanding in what I have said, I am not asking that GS demand the funds back from Borrowers; I am asking that the interest and/or capital repayments be available for release by Lenders if they so chose as it is their money. There is a question of where this money is going, as far as I am aware the administration fees are covered by upfront fees to the Borrowers and the differential of interest rates between the Lenders and the Borrowers.
If I was allowed to withdraw Interest and/or Capital repayments I would feel a lot more comfortable with leaving my funds in GS, I might well keep my balance at a level where I can get my full bonus. Before this event I had the setting to repay interest not capital and had not put notice in to withdraw funds so I did not contribute to the liquidity crisis.
As I understand it, but I am no expert! Although you see a capital repayment, the borrower is (probably) continuing their line of credit into the next month and will have immediately effectively re-borrowed the funds, if GS suddenly have to pay out a lot of funds to lenders there will not be enough to keep their agreements with the borrowers. As long as there are new lender funds exceeding the demand to withdraw everything is fine, if new funds dry up and a lot of lenders want to withdraw the business model is compromised (a liquidity crisis). To keep funding the current borrowers GS needs to keep lender capital repayments on the platform to roll into the next months demand. I can see a case for GS letting lenders withdraw interest as that should be excess to requirements to fund the current borrowers, although I believe the borrowers line of credit is flexible up to a prearranged limit so if they are not using it all they may be able to increase their loan requirement eating into the interest repayments as well. There must be some loans without lines of credit and amortising loans whose capital repayments should be available for withdrawal.
It looks as though GS have committed money they do not have, they will have to rely on repayments from loans and hope these keep coming in (not too many defaults) just to service the commitments. I can only hope GS have not committed too much money as I would predict defaults to rise, if you are right then GS have been counting there chickens before they hatch and it is not looking very good.
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Greenwood2
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Post by Greenwood2 on Mar 19, 2020 9:21:56 GMT
As I understand it, but I am no expert! Although you see a capital repayment, the borrower is (probably) continuing their line of credit into the next month and will have immediately effectively re-borrowed the funds, if GS suddenly have to pay out a lot of funds to lenders there will not be enough to keep their agreements with the borrowers. As long as there are new lender funds exceeding the demand to withdraw everything is fine, if new funds dry up and a lot of lenders want to withdraw the business model is compromised (a liquidity crisis). To keep funding the current borrowers GS needs to keep lender capital repayments on the platform to roll into the next months demand. I can see a case for GS letting lenders withdraw interest as that should be excess to requirements to fund the current borrowers, although I believe the borrowers line of credit is flexible up to a prearranged limit so if they are not using it all they may be able to increase their loan requirement eating into the interest repayments as well. There must be some loans without lines of credit and amortising loans whose capital repayments should be available for withdrawal.
It looks as though GS have committed money they do not have, they will have to rely on repayments from loans and hope these keep coming in (not too many defaults) just to service the commitments. I can only hope GS have not committed too much money as I would predict defaults to rise, if you are right then GS have been counting there chickens before they hatch and it is not looking very good. I was just looking at the borrower side of the web site and GS seem to provide a flexible line of credit up to a limit, of course some businesses may just use it for a short time and repay, but it seems to work a bit like an overdraft facility, use what you need when you need and pay back what you want when you want. Have a read and see what you think.
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alender
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Post by alender on Mar 19, 2020 10:12:39 GMT
There must be some loans without lines of credit and amortising loans whose capital repayments should be available for withdrawal.
It looks as though GS have committed money they do not have, they will have to rely on repayments from loans and hope these keep coming in (not too many defaults) just to service the commitments. I can only hope GS have not committed too much money as I would predict defaults to rise, if you are right then GS have been counting there chickens before they hatch and it is not looking very good. I was just looking at the borrower side of the web site and GS seem to provide a flexible line of credit up to a limit, of course some businesses may just use it for a short time and repay, but it seems to work a bit like an overdraft facility, use what you need when you need and pay back what you want when you want. Have a read and see what you think. I have taken a look and as you say they provide a flexible line of credit up to a limit, we can only hope they have not set this limit too high and for too long as I would like to see my money again in a reasonable time frame (or at least hope to see the vast proportion of it). If you have any figures I would be very interested to see them, I do not know if GS publish these. However I am very concerned that everything has been locked down for up to 90 Days (if interest was paid it would instil some confidence) which gives me the impression GS have no spare money and have over committed. I am not sure what will happen at the end of 90 Days if liquidity does not return (not sure who if anyone will invest while there is a lock down), will another 90 Days be added, resolution event or something else. Although I do not want to see a resolution event it may be better to have a line in the sand than GS staying in lock down and all of our funds being relent and and keeping the company going (paying directors salaries etc). If there is very little chance GS will survive it is better a resolution event is called sooner rather than latter to prevent our money being spent just to keep GS alive.
Edit
I have been looking at my loans and all have a term of 1 month and all the loan agreements I looked at have
3. The Loan
3.1. The Lender agrees to advance the Borrower the Loan Amount on the Loan Date.
3.2. Interest will accrue daily on all money outstanding from and including the Loan Date and will become due and payable on the earliest of:
i. the Borrower’s Monthly Payment Date; ii. the Repayment Date; or iii. the date the loan is repaid.
3.3. Subject to clause 3.4 below, the Borrower will repay the loan in full on or before its Repayment Date.
3.4. In the case of a Liquidity Event, the Borrower must repay the loan in full within 30 days from its Repayment Date or as otherwise agreed between the Borrower and Growth Street in accordance with the terms of the GrowthLine Agreement
Therefore I would assume as the loans are for one month 30 days after the start of the Liquidity event repayments will be made (unless already paid on the repayment date) unless GS has made other arrangements with the borrower. There is no mention in the agreement of flexible line of credit. I would really like to know where all of these repayments are going, also GS seems to open for new Borrowers, is some of the money going there.
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