dave4
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Post by dave4 on Jan 2, 2024 16:30:12 GMT
Mm......Do you think the "90% gross margin" sounds a bit "iffy" or could be a typo. Otherwise that's some business model which, as you've alluded to, could internally fund growth much more economically than an expensive loan.
Isn't it just the nature of the business and their accountancy practices. It won't include debt interest, tax , operating expenses. I'd be more interested in net profit margin.
Like any other business growth loan, they must think that profits can be increased by more than the interest charge over the length of the loan and beyond.
Maybe the Q" Sharia compliant loans " speciality lending that is needed?. I don't quite understand all the ins and outs, but a quick Google search helps. Nester is the only other sharia p2p platform I'm aware of. p2pindependentforum.com/thread/19184/nester
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Post by Ace on Jan 2, 2024 20:29:27 GMT
Now 42% filled. 12.96% XIRR to lenders, ignoring any cash drag before the loan starts.
Same loan mechanics as the last loan (proper amortisation), so looks like it's a new policy rather than a one off. Still no statement from Qardus, so many lenders will probably have no idea that the rates have effectively halved.
Another great example of why the FCA should mandate that XIRRs are stated for all loans. As well as being useful for comparing loans between platforms, in this case it would have been useful for comparing loans within a platform. To be fair to Qardus, they've actually been understating the rates until now.
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jonno
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Post by jonno on Jan 3, 2024 12:10:01 GMT
Ah well, never did get to see it; all gone.
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Post by Penny Pincher on Jan 3, 2024 13:28:22 GMT
Ah well, never did get to see it; all gone. Consider it lucky escape. For my circumstances and attitude to risk, 13% is not sufficient return for an unsecured business loan on a relatively young platform.
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dave4
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Post by dave4 on Jan 3, 2024 17:21:39 GMT
Ah well, never did get to see it; all gone. Consider it lucky escape. For my circumstances and attitude to risk, 13% is not sufficient return for an unsecured business loan on a relatively young platform. My initial thoughts also, but been thinking about this a bit more and.. feel free to change my mind. 1. This education loan and the previous specks loan both seem reasonable loans and about on par with Q Offerings. 2. Both education and speck loans pay the advertised 13% interest. So why the change from the previous normal practice of advertising a lower rate and returning a much higher return (20%) ish..?. Feel free to speculate as I have nothing. 3. The teaching and specks loans are in my opinion offering a very low reward to risk, compared to a1st secured property bridge or development loan offers 10% ish and a safe ish mezz or 2nd charge is 16%+. So what has changed?... Is Q relying on lenders just throwing money in and not understanding the change. Thanks Ace for ur input on the subject. Is Q struggling to find opportunities and having to go cheep?. Is the platform in trouble ?. And how will lenders react to the now cheep returns loans.?? Will the now larger pool (Im assuming this because loans now fill quickly ) of lender diminish? And will this cause loans to go unforfilled? Personally I didn't invest in the speck because of the low returns, I did take a small slice of education because I had repayments on the platform. I am not investing in sme in general because of current financial climate, but did make this exception with Q. Thoughts??
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Greenwood2
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Post by Greenwood2 on Jan 3, 2024 17:31:47 GMT
Consider it lucky escape. For my circumstances and attitude to risk, 13% is not sufficient return for an unsecured business loan on a relatively young platform. My initial thoughts also, but been thinking about this a bit more and.. feel free to change my mind. 1. This education loan and the previous specks loan both seem reasonable loans and about on par with Q Offerings. 2. Both education and speck loans pay sub the advertised 13% interest. So why the change from the previous normal practice of advertising a lower rate and returning a much higher return (20%) ish..?. Feel free to speculate as I have nothing. 3. The teaching and specks loans are in my opinion offering a very low reward to risk, compared to a1st secured property bridge or development loan offers 10% ish and a safe ish mezz or 2nd charge is 16%+. So what has changed?... Is Q relying on lenders just throwing money in and not understanding the change. Thanks Ace for ur input on the subject. Is Q struggling to find opportunities and having to go cheep?. Is the platform in trouble ?. And how will lenders react to the now cheep returns loans.?? Don't frighten the horses!
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Post by Ace on Jan 3, 2024 20:53:21 GMT
Consider it lucky escape. For my circumstances and attitude to risk, 13% is not sufficient return for an unsecured business loan on a relatively young platform. My initial thoughts also, but been thinking about this a bit more and.. feel free to change my mind. 1. This education loan and the previous specks loan both seem reasonable loans and about on par with Q Offerings. 2. Both education and speck loans pay sub the advertised 13% interest. So why the change from the previous normal practice of advertising a lower rate and returning a much higher return (20%) ish..?. Feel free to speculate as I have nothing. 3. The teaching and specks loans are in my opinion offering a very low reward to risk, compared to a1st secured property bridge or development loan offers 10% ish and a safe ish mezz or 2nd charge is 16%+. So what has changed?... Is Q relying on lenders just throwing money in and not understanding the change. Thanks Ace for ur input on the subject. Is Q struggling to find opportunities and having to go cheep?. Is the platform in trouble ?. And how will lenders react to the now cheep returns loans.?? Will the now larger pool (Im assuming this because loans now fill quickly ) of lender diminish? And will this cause loans to go unforfilled? Personally I didn't invest in the speck because of the low returns, I did take a small slice of education because I had repayments on the platform. I am not investing in sme in general because of current financial climate, but did make this exception with Q. Thoughts?? I think you've made some very good points, which are pretty much inline with my own thoughts. They probably are hoping that many lenders won't notice the halving of profits, and they are probably right. I expect that many aren't even aware that they were getting twice the advertised annualised return. I know many lenders who don't measure their achieved returns. They mistakenly believe that the rates advertised by the platforms are regulated in some way. On the positive side, the lower rates should result in them being able to attract more higher quality borrowers, which would allow lenders to be more diversified within the platform. As for how lenders will react: I really don't know, but these 2 loans have filled quickly. I've invested in both of the 2 new, lower profit, loans. However, I've lowered the maximum I'll lend on each loan to 20% of what it was last year. I couldn't really justify lending at ~13% on unsecured business loans. If these loans were on a new platform I wouldn't lend at all. I've made an exception for Q based on their record so far. They've produced my second highest platform profit so far (shortly to be overtaken by AF when the loan repayments announced today are made). 42% of my funds on the platform are profit, which makes me feel fairly comfortable. However, the majority of any funds returned from the platforms I'm running down will now go elsewhere. In fact, I'll probably need to reduce my Q funds due to my new lower maximum per loan.
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Post by overthehill on Jan 4, 2024 11:25:20 GMT
My initial thoughts also, but been thinking about this a bit more and.. feel free to change my mind. 1. This education loan and the previous specks loan both seem reasonable loans and about on par with Q Offerings. 2. Both education and speck loans pay sub the advertised 13% interest. So why the change from the previous normal practice of advertising a lower rate and returning a much higher return (20%) ish..?. Feel free to speculate as I have nothing. 3. The teaching and specks loans are in my opinion offering a very low reward to risk, compared to a1st secured property bridge or development loan offers 10% ish and a safe ish mezz or 2nd charge is 16%+. So what has changed?... Is Q relying on lenders just throwing money in and not understanding the change. Thanks Ace for ur input on the subject. Is Q struggling to find opportunities and having to go cheep?. Is the platform in trouble ?. And how will lenders react to the now cheep returns loans.?? Don't frighten the horses!
Better than closing the stable door after the horses have bolted and are in the wind - fundingsecure, lendy, collateral, moneything, ablrate, etc, etc, etc.
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Greenwood2
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Post by Greenwood2 on Jan 4, 2024 11:54:31 GMT
Don't frighten the horses!
Better than closing the stable door after the horses have bolted and are in the wind - fundingsecure, lendy, collateral, moneything, ablrate, etc, etc, etc.
Partly a joke, but I don't think the platform is in trouble, yet anyway, although lower rates will deter some lenders. The main selling point to borrowers is the Sharia compliant bit which I think remains a big plus for the platform and makes it a pretty unique offering, whether it provides 'better' borrowers for lenders is still to be seen. They have to keep on top of potential defaults to keep the lender base.
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Post by Penny Pincher on Jan 4, 2024 13:02:28 GMT
My initial thoughts also, but been thinking about this a bit more and.. feel free to change my mind. 1. This education loan and the previous specks loan both seem reasonable loans and about on par with Q Offerings. 2. Both education and speck loans pay sub the advertised 13% interest. So why the change from the previous normal practice of advertising a lower rate and returning a much higher return (20%) ish..?. Feel free to speculate as I have nothing. 3. The teaching and specks loans are in my opinion offering a very low reward to risk, compared to a1st secured property bridge or development loan offers 10% ish and a safe ish mezz or 2nd charge is 16%+. So what has changed?... Is Q relying on lenders just throwing money in and not understanding the change. Thanks Ace for ur input on the subject. Is Q struggling to find opportunities and having to go cheep?. Is the platform in trouble ?. And how will lenders react to the now cheep returns loans.?? Will the now larger pool (Im assuming this because loans now fill quickly ) of lender diminish? And will this cause loans to go unforfilled? Personally I didn't invest in the speck because of the low returns, I did take a small slice of education because I had repayments on the platform. I am not investing in sme in general because of current financial climate, but did make this exception with Q. Thoughts?? If the two most recent amortising investments are of comparable risk, to previous offerings then why, in the current economic environment, are these loans cheaper for the borrower? (I think I just reworded your question.) Perhaps they're not cheaper for the borrower! It bothers me that Qardus offer documents don't explicitly declare what the funded company will pay, they only talks in terms of the SPV. The documents set out a schedule of repayments that lenders can expect to receive, but these payments are from the SPV to the lender and are 'net of any expenditure incurred by the SPV and after corporation tax'. In the case of the two most recent investments, the stated return of the SPV is the same as for previous investments, i.e. 19 or 20% 'p.a. gross return'. The returns to the investor are much reduced and therefore the inference is that the SPV's income (from the funded company) must also be reduced. But it could be that the SPV's expenditure has increased! However, it seems that Qardus servicing fee has also changed to a percentage of the reducing balance (though this isn't perfectly clear to me), making 'borrowing' cheaper still. But I can't evaluate the risk of an investment without knowing, for certain, what the 'borrower' is paying. On other (admittedly non sharia compliant) peer-2-peer platforms, we are explicitly told the interest rate and fees the borrower is charged; their cost of credit. Is it not a requirement for platforms to provide this information to lenders? The lower returns, my uncertainty described above and the questions raised by others, prevent me from making any further investments.
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dave4
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Post by dave4 on Jan 4, 2024 13:53:24 GMT
Might I suggest someone more grown up and eloquent then me ask Q the pertinent questions. I have messaged Q a basic wtfrell is the plan ?..
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littleoldlady
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Post by littleoldlady on Jan 5, 2024 10:51:52 GMT
Might I suggest someone more grown up and eloquent then me ask Q the pertinent questions. I have messaged Q a basic wtfrell is the plan ?.. The problem is that Sharia loans are not allowed to charge interest so terms like APR are not applicable. In theory the cost of credit is not known at the outset of the loan as it depends on the future price of a tradable instrument, although the cunning Sharia compliant method gives a high degree of certainty to the borrower. So I don't think that Q are actually able to give you the information Penny Pincher wants in a simple form. If they disclosed full details you could calculate the equivalent interest rate yourself if you assume the future price of the underlying security is the same as now, but I doubt they would be prepared to do that.
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dave4
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Post by dave4 on Jan 5, 2024 13:49:28 GMT
Might I suggest someone more grown up and eloquent then me ask Q the pertinent questions. I have messaged Q a basic wtfrell is the plan ?.. The problem is that Sharia loans are not allowed to charge interest so terms like APR are not applicable. In theory the cost of credit is not known at the outset of the loan as it depends on the future price of a tradable instrument, although the cunning Sharia compliant method gives a high degree of certainty to the borrower. So I don't think that Q are actually able to give you the information you want in a simple form. If they disclosed full details you could calculate the equivalent interest rate yourself if you assume the future price of the underlying security is the same as now, but I doubt they would be prepared to do that. Pleasant and prompt reply. Our repayment terms for SMEs are now in-line with other alternative lenders in the UK. Have a great weekend! All the best, Qardus Team
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jonno
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Post by jonno on Jan 5, 2024 14:42:03 GMT
The problem is that Sharia loans are not allowed to charge interest so terms like APR are not applicable. In theory the cost of credit is not known at the outset of the loan as it depends on the future price of a tradable instrument, although the cunning Sharia compliant method gives a high degree of certainty to the borrower. So I don't think that Q are actually able to give you the information you want in a simple form. If they disclosed full details you could calculate the equivalent interest rate yourself if you assume the future price of the underlying security is the same as now, but I doubt they would be prepared to do that. Pleasant and prompt reply. Our repayment terms for SMEs are now in-line with other alternative lenders in the UK. Have a great weekend! All the best, Qardus Team Wow! Unfortunately their asset security is not "in line with other alternative lenders", so I'm afraid I'm out.
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dave4
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Post by dave4 on Jan 5, 2024 15:57:28 GMT
Pleasant and prompt reply. Our repayment terms for SMEs are now in-line with other alternative lenders in the UK. Have a great weekend! All the best, Qardus Team Wow! Unfortunately their asset security is not "in line with other alternative lenders", so I'm afraid I'm out. To my knowledge the only other sharia compliant p2p lender is nester,which is property secured loans, THINK BRIDGING LOANS without interest but profit. They currently offering 9% ish. So in-line with shiria p2p, but I believe sme lending is much higher nearer 16% ish, but obviously not sharia, so maybe q is referencing and now aimed at sharia lenders only?. Maybe this subject should be moved to a new thread.
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