Lendy Ltd (Business Model)

Thanks for bringing this to our attention.  I have looked at a couple of them, and a couple of things in the Camamgue report struck me as odd...

• I can find no date on the report
  
• Aside from the obviously blacked out parts of the report, everything is perfectly readable except for the Valuation section on Page 23, which shows up on my display as alphabet soup.  Is it just me?  Or do others see the same problem?

Thanks to SS for uploading this info.

Thanks for the hint -- it worked for me too.  (And I do use Firefox.)  If a font substitution is involved, I can't see any difference between the odd paragraph and all the others.  But why would the PDF have used a different font for that paragraph?  Questions for SS/Lendy, I guess, since it would have been they who produced the redacted PDF.

With respect to the valuation paragraph itself, I note the reference to a "patient sale".  I don't suppose it's an issue as long as SS LTVs stay below 50%, but if they start exceeding that then these reports are going to become essential reading, as I expect the difference in the price that could be achieved in a quick sale to satisfy a non-redeemed loan could be considerably below that achieved in a patient sale.  I wonder if borrowers realise how much less than the valuation their security might be sold for?  Especially if SS/Lendy stick to their stated schedule of wanting to repay lenders within a month after the loan term ends.  A month might not seem that short, but reading the various Ts&Cs, it looks like the 14-day notice wouldn't be sent until the loan is at least 7 days overdue, and since the auction can't take place until after the 14 days is up there's very little time left to have the auction.

Thanks for fixing the PDF -- it looks fine to me in Firefox now.

Thanks also for the assurance that Lendy intends to keep LTVs low.  And perhaps knowing that a failure to repay would mean their boat would be sold off at a bargain price in a 'fire' sale also may give borrowers even more incentive to repay their loans!

A question about one of the practicalities:

If I were in charge of a boatyard I don't think I would want to be responsible for the keys. 

If I was out and the owner came along, would my staff remember to refuse them the keys, where under any other circumstance they would be expected to be very helpful to the owner?

Is the boatyard owner paid for this?  If the boat goes walkies (floaties) do they have to cough up, would their insurance cover it?  etc

Thanks

Lendy Ltd holds the keys for most of our vessels unless they are for sale with a boat broker.

Advantages for the boatyard in signing the 3-way agreement are that we guarantee that storage fees will be paid. Most Marinas and boatyards are used to vessels having legal charges against then and are equipped to deal with those circumstances.

If the boat does go walkies, the vessel can be considered stolen and a claim on the vessels insurance policy would ensue as Lendy Ltd is noted as First Loss Payee.

Thank you MONEY for your observations. Mostly valid points and we have done our best to remedy some of them already.

We are 100% confident that our website registration & login process is safe and secure. We could email users randomly generated passcodes that we ask the nth and nth characters of along with the nth character of a first pets name upon each login, however we initially aimed for an uncomplicated approach to registering to encourage signups.

This has been added to the site now.

3. Account - apart from name, no personal details are viewable or updateable under the "Account" tab, or on the rest of the site, unless I'm missing something?

This will be added as soon as possible, however I believe the only items that will be editable will be address and contact phone number.

4. LTV - as time goes on, loan to asset value appears to be on a downward trend. This could quite possibly be a coincidence, but it's also a concern taking into consideration your business model, having both principle and interest rolled up for repayment at the end of the loan's term? 50%LTV+(4%interest*7mths)=78%, that's IF the loan term isn't extended. Remove the estimated 5% legal fees for recovery of funds, and your LTV is 83% - a figure that is extremely unlikely to be recovered via auction or fire sale.

Your assumption and calculations here are incorrect. Loan terms are advertised to investors as a maximum of 7 months, however borrowers loan terms are only 6 months. This gives Lendy one month to issue 14 day statutory notice to the borrower and arrange fire sale of the asset, prior to investors expecting funds returned.

So at the end of a 6 month loan, the interest (for a 4% loan) will be 24%, but only 24% of the 50% loan value. Hence actual LTV only rises by half this value, 12%.  So after 6 months the LTV rises by only 12%. We do not incur legal fees for recovery of funds, we simply sell the asset after the 14 day statutory notice period. So the maximum we are ever exposed to at the 6 month point is 62%.

5. T&C - "3.1 ...Money left in your Client Deposit Account will not earn 8% interest". Out of curiosity, where did the "8%" originate? Surely if your T&C hasn't been borrowed from another source, either the term "12%" or "any" would have been appropriate to your platform currently?

This should have read "Money left in your Client Deposit Account will not earn any interest" and has been rectified.

This has also been modified to read "Withdrawals will only be made to the account provided by the Investor during the withdrawal request." When FCA regulation is introduced in April we may have to include nominated accounts on registration for compliance purposes. This would also mean having to drop GoCardless as, if an investor uses this method to fund their account we have no knowledge of the bank account it originated from.

As previously expressed we are keen to work with investors regarding their insight, ideas and helpful assistance. We have found it productive and with new loans being funded as quickly as they are being (£50k in a little over 3 hours) we are extremely pleased that investors appear to be confident in our product.