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Post by ratrace on Oct 6, 2015 20:35:00 GMT
If it's THAT big a "shock", I think I'd rather have my money tied up in secured property loans and take a ding, than in unsecured loans to smaller-medium businesses, which are very likely to just go <poof!>... So you think the first charge on property might be more productive that a director's guarantee? I rather agree. In that position I would rather use my personal money to try to save my company rather than default on the loan earlier and then give my personal cash to FC. The problem with the argument is that a general collapse in property prices would be a common mode risk to all property loans, whereas the SME loans are very diverse and not all sensitive to the same economic events (large exchange rate variations etc). But true that SME defaults result in slow recoveries of up to 40% in the good times, while the value of property security should be much better (smaller ding) even if property prices take a large hit. Personally I am in the property loans. Yes when it comes to SME's to often they get lumped together as if there all the same thing, but in fact as you say they are a very diverse group. Some with their own highly profitable niche.
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adrianc
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Post by adrianc on Oct 6, 2015 21:03:07 GMT
So you think the first charge on property might be more productive that a director's guarantee? <thinks about certain recent loan comments> Frankly, at the moment, I put directors' personal guarantees into the same category as political manifestos.
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brianlom1
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Post by brianlom1 on Oct 6, 2015 22:42:44 GMT
If I may take the discussion back to the subject of jumping ship ...
... I've been invested in FC and ReBS for a couple of years now and would assess their relative merits as follows:
Frothy Coffee
+ no fuss property loans, fixed interest rates, good balance of risk and reward
+ active SM
+ well organised, most loans pay up on time (even at weekends), good communication if not
- not compatible with my SIPP
- rate have plummeted with the move to 100% fixed rates
ReBS
+ attractive rates of interest
+ compatible with my SIPP
- totally disorganised, lax attitude to debt recovery
- regular problems with the platform
- poor communication on the forums
- too many loans either late or in default
For these reasons, I'm looking to diversify my investments and would be interested to hear your recommendations.
I'm primarily interested in a platform that is compatible with my SIPP, possibilities include:
AC
RS
M&C
Ablrate
CS
HNW
FK
Beyond that my main criteria would be:
Proven ability over time
Robust checks carried out on borrowers (assets don't just evaporate)
Respectable return on capital invested
Loans as small as £20 (to aid diversification)
Active SM (possibility of charging a premium, reasonable trading costs)
Any suggestions?
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Post by jackpease on Oct 7, 2015 6:05:44 GMT
I am not sure Rebs is that bad! I think the problem is that when you join a platform, inevitably you buy up new loans and healthy secondary market loans and all seems well with the world as the interest piles in. About six to 12 months later the defaults start rolling in and then it doesn't look so rosy and the usual MO is that the platform then gets heavily criticised here - whether or not the directors engage with this forum or their customers!
In the list of 'alternatives' you mention there are others that easily have as many defaults as Rebs and there are platforms where late payments have locked up people's funds.
I'm sure others will say this but if platform 'safety' is important then the likes of Ratesetter are obvious choices but their rates will look disappointing against headline pre-default rates offered by platforms such as Rebs which can leave a bad taste if you weren't expecting some trouble.
Jack P
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Steerpike
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Post by Steerpike on Oct 7, 2015 7:25:20 GMT
My experience with probable or confirmed defaults as a percentage of net earnings:
FC 2%
FK 8%
REBS 128%
other 16 0%
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Post by jackpease on Oct 7, 2015 7:31:37 GMT
>>>>My experience with probable or confirmed defaults as a percentage of net earnings:
FC 2%
, FK 8%
, REBS 128%
, other 16 0%
Ouch, I see - i must have been lucky on Rebs but not so lucky on FK where i caught a cold early on.
Jack P
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blender
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Post by blender on Oct 7, 2015 8:02:30 GMT
2% losses as a percentage of net earnings on FC is exceptionally good. Mine is 3.5% over two accounts and I am very happy with that (3 years plus though capital has increased). The average for FC on Autobid should be in the range 15-20% (of net earnings not capital, while losses as a percentage of capital should be around 2% pa)
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fasty
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Post by fasty on Oct 7, 2015 8:14:36 GMT
2% losses as a percentage of net earnings on FC is exceptionally good. Mine is 3.5% over two accounts and I am very happy with that (3 years plus though capital has increased). The average for FC on Autobid should be in the range 15-20% (of net earnings not capital, while losses as a percentage of capital should be around 2% pa) Is that 2% / 3.5% actual confirmed (defaulted) losses, without RBRs? Although my confirmed defaults are significantly less than FC averages, I am very nervous about the large extent on RBRs on my account. It's money I can't access, and I believe much of it will become defaulted. I can't help feeling that Frisky Chickens are happy to use RBRs to mask the full extent of less-than-savoury loans.
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min
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Post by min on Oct 7, 2015 8:42:27 GMT
My experience with probable or confirmed defaults as a percentage of net earnings: FC 2% FK 8% REBS 128% other 16 0% Confirmed defaults - recoveries on FC/FK. Probable defaults on AC FC 37% FK 8% AC 16% Recoveries currently 20% on FC BUT 101 with RBR. To be fair some of these are where another company has taken over the repayments and payments on time. Just annoying that unable to sell.
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blender
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Post by blender on Oct 7, 2015 8:47:51 GMT
The 2% is Steepike. My 3.5% is actual losses, defaults net of recoveries, as reported by Fiddling Calculations. I have no RBRs because I have given up defaults (now into property which gets sold before repayment). Farming the cash back.
The second account was created early 2014 with SMEs, has moved to property and has no RBRs, defaults, losses or even notes. Much nicer. Losses 0% of anything.
Have spiced it up with a few Es to be sold before the second repayment - risky stuff.
I have a small amount in ABLrate, which I consider at greater risk than FC. Considering LC but only if FC property cash back becomes unproductive - they still need us for property.
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Steerpike
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Post by Steerpike on Oct 7, 2015 9:14:52 GMT
2% losses as a percentage of net earnings on FC is exceptionally good. Mine is 3.5% over two accounts and I am very happy with that (3 years plus though capital has increased). The average for FC on Autobid should be in the range 15-20% (of net earnings not capital, while losses as a percentage of capital should be around 2% pa) Is that 2% / 3.5% actual confirmed (defaulted) losses, without RBRs? Although my confirmed defaults are significantly less than FC averages, I am very nervous about the large extent on RBRs on my account. It's money I can't access, and I believe much of it will become defaulted. I can't help feeling that Frisky Chickens are happy to use RBRs to mask the full extent of less-than-savoury loans.
Good point. Adding in the amber and red rags results in 3.4% for FC. Yes, similarly FK refer to RBRs as "loans in debt recovery" but some of these have had no comments for months and show very little sign of recovery. I included these in the 8%.
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fasty
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Post by fasty on Oct 7, 2015 9:21:55 GMT
Thanks for everyone's transparency. It's helpful to benchmark!
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brianlom1
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Post by brianlom1 on Oct 7, 2015 12:00:21 GMT
Thanks for everyone's transparency. It's helpful to benchmark! Thanks everyone for sharing your experiences. I'm not sure how to accurately calculate my losses (how much will be recovered? will a potential defaulter turn out to be a late payer?) but if I express loans that are currently late or in default as a % of lifetime earnings the figures would be along the lines of: FC - 25% ReBS - 100% One of the reasons for originally choosing to invest with FC and ReBS was the affordable cost of selling in the aftermarket (0.25% and 0.5% respectively), do any other companies come close to matching these figures?
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SteveT
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Post by SteveT on Oct 7, 2015 12:11:15 GMT
No charge at all for selling on Ablrate. 0.25% on Lending Crowd. Can't remember what Funding Knight was when I used it briefly (perhaps 0.5%?)
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Post by goldservice on Oct 27, 2015 10:07:35 GMT
For those who have been pondering whether to jump ship to SS, now might be a good time. After a period with very few new loans, there are now seven in the 'pipeline'.
I'm still too much of a newbie on SS to know what the usual deal flow is. Over the last month or so it may have been deliberately low while the new terms (which protect lenders better) are introduced. The promised greater deal flow has now arrived. As each loan emerges from the pipeline, it prompts lenders to unload part of existing loans in order to diversify into the new loans. This flurry of sales on an otherwise moribund SM is the opportunity both to diversify and to build up a larger holding.
On a different note, I find the board for SS is unexciting compared with this one and that is a virtue, as it is with RS who are proud of their boring reputation. I wouldn't be surprised if there are some lenders who have sold out of Forever Captured but still come here!
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