Looking Ahead

Mar 4, 2015 22:58:42 GMT mikes1531 said:

Mar 4, 2015 19:30:42 GMT star dust said:

Actually, this is one of the advantages of the current SS model, where we lend our money to them and they lend it to borrowers -- as long as SS have the necessary resources, they can take us out of a loan and deal with late borrowers in their own time and out of the spotlight.  The obvious negative side to this is that we don't learn much, if anything, about SS's ability to deal with defaulting loans -- and it could be difficult, if not impossible, to take this approach if the defaulting loan is a large PBL.

"as long as SS have the necessary resources" being the key phrase. And how do we now if that is the case? Usually the starting point would be the last set of accounts.  But Lendy Limited was only incorporated in October 2012; it has only produced one set of accounts up to 31st December 2013 which were published in February last year. Lendy Limited has taken advantage of every possible exemption in reducing the amount of information disclosed in these accounts. This is fine for companies where nobody is going to read or rely on the accounts but for a company which is seeking to borrow money from P2P lenders surely it should be more forthcoming and go beyond the legal minimum?

So no directors' report or profit & loss account just an unaudited balance sheet  - Debtors £978,490, Cash at bank £83,732 Creditors £(1,059,700) giving net assets of £2,522 represented by Share Capital £1 and Profit for the period of £2,521

Other than the company name "Lendy" there is no indication in the accounts that the company is engaged in lending or finance. There are only two accounting policies; one for Deferred Tax (there isn't any, as can be seen from the above balance sheet figures), the other is for Turnover - "Turnover represents net invoiced sales of goods excluding value added tax". But I thought this was a lending business rather than one selling goods? Surely as a minimum we would expect an accounting policy on how interest (receivable and payable) is accounted and bad debts treated? Other than an accounting note explaining that the £1 share capital was fully paid the only other accounting note informs us that security has been given for £664,000 of the total creditors. Presumbly this security is over the debtors; but no comment which you would expect that these debtors (which one imagines are amounts loaned out  - if so why not say so?) in turn have security on assets pledged?

I see from this board that Saving Stream was in operation with secured lending prior to end of December 2013 but this is not borne out by these accounts. Saving Stream are acting as principal rather than agent when borrowing money and the fact that a loan is secured is only a benefit to me if there is a default by the borrower.  Where's my security if the problem is not with the borrower but Lendy Limited itself? I hope the 2014 accounts are more reassuring but I will be restricting amounts invested to a minimum until they are more forthcoming with the quality of information provided.