Steerpike
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Post by Steerpike on Sept 22, 2015 12:57:03 GMT
In the list of "My investments" I would like to see interest rate, payments made, term remaining. When inspecting "Loan details" I would like to see prominently displayed my current investment. lendingcrowd
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grahamg
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Post by grahamg on Sept 22, 2015 17:29:38 GMT
The Real Value of Floating Charge / Debentures
I have started investing with LC but am concerned about the reliance on Floating charges for Assets . In a liquidation floating charges are well down the list and given that most assets have very low values when sold off its a concern.
Directors guarantees also have limited value as there is no control over disposal of underlying assets backing it. (Same opinion for FC loans apart from property).
Do Lending Crowd value the assets as under liquidation conditions ?
1. FIXED CHARGE HOLDERS
As far as liquidators are concerned, their primary concern is to satisfy the outstanding debt owed to creditors with a security interest over ‘charged’ property. There is however a problem of what is to happen when more than one creditor has security in the same asset. The Companies Act 2006 stipulates that the security that is registered first will have priority.
There are important distinctions between different types of securities. In terms of liquidation, and which creditors will be paid first, a fixed charge holder i.e. a holder of a security in a particular asset of a business will ‘rank’ ahead of a holder of a floating charge i.e. a charge that has yet to ‘attach’ to business assets. There is an exception to this rule, and that is where a floating charge was created that explicitly prevents the creation of any later fixed charges and the holder(s) of a fixed charge had notice of its creation – there is normally a clause within the documentation for the ‘floating charge’ that makes such a condition very clear.
2. LIQUIDATION COSTS
The next concern for the liquidator, after having satisfied the fixed charge holders will be to account for the cost of liquidating the company. These costs are normally accounted for from the assets of the company that would be used to pay general creditors – those that do not hold security over company assets.
3. PREFERENTIAL CREDITORS
When a liquidator has satisfied the costs of pursuing the liquidation, they will then turn to deal with the so called ‘preferential debts’. The debts that this refers to, have been changed after some reforms in this area of the law. The current preferential debts that will need to be discharged are;
• Employee wages to the maximum sum of £800, earned in the four months prior to the resolution to ‘wind up’ the company; and
• Money lent to the company e.g. from a bank to pay employee wages.
4. CREDITORS WITH FLOATING CHARGES
A liquidator will then turn to deal with those creditors that hold floating charges over company assets. This is an area of the law that has undergone a great deal of reform. The law requires that a liquidator set aside a portion of the company’s assets, called the ‘Prescribed Part’ to pay for ‘unsecured’ debt. Floating charge holders will be paid from company assets, in so far as they can be, from monies that do not make up the ‘Prescribed Part’.
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Post by bollidear on Sept 22, 2015 18:24:05 GMT
Like a bubonic rat leaving the FC ship - I'm now on board with LC with my £100 bonus and more inbound with referrals to fellow FC dis-illusionists.
I'm a happy chappy, had my intro phone call and worked my way around the site in a few minutes.
One simple observation and most likely very easy to rectify, is when trawling through the secondary market I'd like an indication against the loan if I am already lending to it and if so - how much. I agree with the concept of keeping things easy on LC and now Samir, the time vampire, has been vanquished from my life - I'm enjoying the freedom!
It helped that one of the loans on LC is for a company I know well and the Directors personally - so it was easy to do my own DD, that pretty well lined up with the listing.
Early days - but so far so good and a well rounded start-up for the new kid on the block.
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Post by nanniema on Sept 23, 2015 8:21:11 GMT
I'm sorry, I've checked again. I put up a £40 part for sale - Part of that was sold for £19.54 with a 4p fee. The remaining part is now for sale for £20.46 of which I will receive £19.98. I don't know whether this clarifies or confuses things. Probably confuses things, to be honest! (Obviously not your fault!) On the one hand, that's closer to what I'd expect, that someone buying from the SM generates a fractional sale of whatever you had listed. But it's certainly not pro rata if you had £40 out of £39k up for sale. It seems to look more like you went to the front of the queue for selling on the SM (on what basis, I wonder?) and someone bought a £20 part and between accounting for fees, accrued interest and so on, you've been left with the situation you describe. I really can't see how those numbers work out like that though. lendingcrowd - would love to know how these numbers work out like this?
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Post by nanniema on Sept 23, 2015 8:28:53 GMT
Second half of loan part now sold, so although still none the wiser about the system am very impressed. With clarification from LC it would give me, and I suspect others, more confidence in investing larger amounts in the longer term loans.
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bjorn
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Post by bjorn on Sept 23, 2015 9:23:08 GMT
Second half of loan part now sold, so although still none the wiser about the system am very impressed. With clarification from LC it would give me, and I suspect others, more confidence in investing larger amounts in the longer term loans. Agree. I think that I had assumed that the relatively large amounts for sale on the SM would mean that those amounts are either ahead of any new parts that are listed on the SM or at least that they would create a "drag" on anything you want to sell (in the case of it being some sort of pro-rata arrangement). baldpate raised exactly this concern earlier in this thread and cited it as being one of the key reasons he decided not to invest in the platform. Personally I'm not so worried about that as I expect the number of users will grow quite quickly in coming months and that liquidity in the SM will increase accordingly. And, in any case, all LC loans are amortising so you're getting repayments every month anyway. But if you've been able to sell £40's worth in the last couple of days of a loan that had £39k up for sale, then it seems more promising than I'd thought. Still don't quite get on what basis you "jumped the queue". Any explanations on how this works, please lendingcrowd ?
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Post by lendingcrowd on Sept 23, 2015 15:38:22 GMT
Hi everyone, Sorry for the delay in getting back to you all. I hope this answers your queries on the Loan Exchange. What bjorn had written here is quite accurate. 1. As Bjorn said all Loan Parts for sale are bundled up and listed at the indicative rate (this is the rate shown on the Loan Exchange). This is the weighted average rate of all Loan Parts that are for sale. 2. We did this to increase liquidity. We wanted our system to be fair for all investors and we created this solution to do that. The system does not favour some investors over others. To explain this I need to explain how it works. How the Loan Exchange WorksOnce you list a Loan Part on the Loan Exchange it is immediately available to buy by other investors. There is no FIFO bias or pro rata bias and it is as likely to be bought up by an investor as a Loan Part that had been previously listed. Now there are a few caveats for this. For instance the Loan Part that is getting purchased is selected from at least three parts that are for sale. Thus even if there is a larger loan part available our system will always have to take bits from other loan parts not just the one larger loan part. In addition to this a minimum of £5 is taken from each of the three Loan Parts. We also never leave a loan part that is worth less then £20 on the Loan Exchange, we did this to prevent many small repayment parts being created. To give you an indication of how this system works we created the diagram below. In the diagram an investor is looking to buy a £100 Loan Part from Acme Inc. The indicative rate on offer is 9.99%. There is a total of £2280 available to buy in this loan with the majority held (£2000) by a single investor. As this purchase has to be made up of at least three different loan parts the system figures out the best combination from what is available and purchases the appropriate amount of each. Attachment DeletedThe image is a little small and I can't seem to make seem to make it bigger. If you would like a bigger version please email us and we will send it on. We will answer the other questions soon. Thanks, LendingCrowd
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Post by GSV3MIaC on Sept 23, 2015 19:06:11 GMT
If anyone clicks on the image they get the full size version. HTH.
Oh, I signed up too (still looking down the back of the sofa for the £1k entry fee though), and was impressed to get a personal call from Heather at 6:28pm on a Wednesday to see if I needed my hand held (happens I didn't). James D .. you are supposedly the beneficiary, having beaten Bollidear by a short head. 8>.
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SteveT
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Post by SteveT on Sept 24, 2015 7:14:31 GMT
Is LC happy to open accounts in a company name? The Investor FAQs just say UK resident / UK bank account / 18+yo (with all of which I comply!)
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bjorn
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Post by bjorn on Sept 24, 2015 7:48:51 GMT
To give you an indication of how this system works we created the diagram below. In the diagram an investor is looking to buy a £100 Loan Part from Acme Inc. The indicative rate on offer is 9.99%. There is a total of £2280 available to buy in this loan with the majority held (£2000) by a single investor. As this purchase has to be made up of at least three different loan parts the system figures out the best combination from what is available and purchases the appropriate amount of each. The image is a little small and I can't seem to make seem to make it bigger. If you would like a bigger version please email us and we will send it on. Thanks - this is helpful. A couple of things that are still not quite clear though. How does the system select which three loan parts to buy from? So in the example, why does it select from parts 1, 2 and 5 rather than, say, 3, 4 and 5? Is it just a random allocation? And how does it decide the proportion to take from each part? In the example the system could just as well have taken £20 from part 1, £60 from part 2 and £20 from part 5. Again, is this just random allocation? The real question behind all these questions would be "what determines the speed at which you can sell through the Loan Exchange?" (since this is what matters for liquidity). If I understand what you've said correctly, the speed at which you can sell is a function of the number of parts listed on the exchange rather than the size of those parts or the total amount listed for sale. Would you agree?
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stevio
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Post by stevio on Sept 24, 2015 8:43:57 GMT
Is LC happy to open accounts in a company name? The Investor FAQs just say UK resident / UK bank account / 18+yo (with all of which I comply!) Be interested to know too - sometimes just starting the application tells you ie allows you to select company, sorry know not that much help! Edit: Emailed them to find out and will update with response Edit: We are able to accept company investors but unfortunately this process is not yet automated through the site - we are working to update this in due course.
In the meantime, please find attached a form to fill in to provide the details of the directors and major shareholders in the company. If you could complete this and send it back to me, that would be great. If you could then create an Investor account using your company email address, the account name will be transferred to your company name once the update is completed.
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Post by lendingcrowd on Sept 24, 2015 8:49:03 GMT
In the list of "My investments" I would like to see interest rate, payments made, term remaining. When inspecting "Loan details" I would like to see prominently displayed my current investment. lendingcrowdHi Steerpike and bollidear, Thank you for your feedback - we recognise that investors would like to see more information in their Investor Account and we have planned an update to this. We are also adding in functionality showing which loans you have already invested in, and expect this to be released in the near future. Thanks, LendingCrowd
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Post by lendingcrowd on Sept 24, 2015 8:59:39 GMT
Is LC happy to open accounts in a company name? The Investor FAQs just say UK resident / UK bank account / 18+yo (with all of which I comply!) Hi SteveT and stevio, Thank you for your questions about company investment - I've replied to the emails you've sent but I thought it would be helpful to reply here too for others who might have the same question. We are able to accept investment from companies but unfortunately this functionality is not yet automated through the website. There is a form to complete that I can send through by email to anyone who is interested, and if you could then set up an Investor Account on the website using your company email address, this account will be converted to your company's name in due course. I hope this helps! Thanks, Heather
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kaya
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Post by kaya on Sept 24, 2015 14:35:09 GMT
No doubt LC will be happy that they are getting some serious attention now, though I can't help but feel slightly miffed that those of us who took the risk early on with a new and unknown platform, and even perhaps offered some encouragement to others, were offered a reward of just half of what can be achieved now! What about your dear loyal 'founder members', LC?!
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Post by lendingcrowd on Sept 24, 2015 14:41:07 GMT
To give you an indication of how this system works we created the diagram below. In the diagram an investor is looking to buy a £100 Loan Part from Acme Inc. The indicative rate on offer is 9.99%. There is a total of £2280 available to buy in this loan with the majority held (£2000) by a single investor. As this purchase has to be made up of at least three different loan parts the system figures out the best combination from what is available and purchases the appropriate amount of each. The image is a little small and I can't seem to make seem to make it bigger. If you would like a bigger version please email us and we will send it on. Thanks - this is helpful. A couple of things that are still not quite clear though. How does the system select which three loan parts to buy from? So in the example, why does it select from parts 1, 2 and 5 rather than, say, 3, 4 and 5? Is it just a random allocation? And how does it decide the proportion to take from each part? In the example the system could just as well have taken £20 from part 1, £60 from part 2 and £20 from part 5. Again, is this just random allocation? The real question behind all these questions would be "what determines the speed at which you can sell through the Loan Exchange?" (since this is what matters for liquidity). If I understand what you've said correctly, the speed at which you can sell is a function of the number of parts listed on the exchange rather than the size of those parts or the total amount listed for sale. Would you agree? Hi bjornThanks for your reply To answer your first two points: It is random allocation with a target (purchase amount and indicative interest rate). Again this doesn't favour any particular loan part. And to answer your last query. To a certain extent it is a function of the number of loan parts but it is also dependent on the amount an investor is looking to buy and the indicative interest rate. All the best, LendingCrowd
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