bugs4me
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Post by bugs4me on Feb 13, 2014 12:05:04 GMT
Is this another case of playing AC off against someone else? My guess is that the director is trying to get the cheaper 'mainstream' finance in place quickly enough that they don't actually need the bridging loan. The only good news I can see is that we lenders don't have real money tied up in this deal any more, only pre-bids. Which seem to be being withdrawn faster than they're being added to. ISTM that the pre-bids were 110+% of the loan amount a few days ago, and now they're only 105%. I don't see a way round this unless AC introduce up-front borrower fees that would be refunded once the loan was drawndown. If it was not drawndown then those non-refundable borrower fees could be used to cover AC costs and compensate bidders for any dead time funds.
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Post by pepperpot on Feb 13, 2014 12:14:05 GMT
My guess is that the director is trying to get the cheaper 'mainstream' finance in place quickly enough that they don't actually need the bridging loan. The only good news I can see is that we lenders don't have real money tied up in this deal any more, only pre-bids. Which seem to be being withdrawn faster than they're being added to. ISTM that the pre-bids were 110+% of the loan amount a few days ago, and now they're only 105%. I don't see a way round this unless AC introduce up-front borrower fees that would be refunded once the loan was drawndown. If it was not drawndown then those non-refundable borrower fees could be used to cover AC costs and compensate bidders for any dead time funds. That's a nice idea but how common is it in the wider industry, might it put some people off?
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mikes1531
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Post by mikes1531 on Feb 13, 2014 21:25:01 GMT
I don't see a way round this unless AC introduce up-front borrower fees that would be refunded once the loan was drawndown. If it was not drawndown then those non-refundable borrower fees could be used to cover AC costs and compensate bidders for any dead time funds. That's a nice idea but how common is it in the wider industry, might it put some people off? It's bound to put some borrowers off if most other lenders don't charge such a fee, but I would think that such a 'reservation' fee is not that uncommon -- but that's based on a feeling rather than real data. And it might be possible to structure such a fee in a way that it became a positive incentive for borrowers to draw down sooner rather than later -- such as making the fee 125% refundable if drawdown was within 4 weeks of the auction end, or 150% refundable if drawdown was within 2 weeks of the auction end. Who knows, with an incentive scheme like that it might be possible to negotiate lower underwriting fees because of the resulting reduction in drawdown delays.
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bugs4me
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Post by bugs4me on Feb 13, 2014 23:06:04 GMT
That's a nice idea but how common is it in the wider industry, might it put some people off? It's bound to put some borrowers off if most other lenders don't charge such a fee, but I would think that such a 'reservation' fee is not that uncommon -- but that's based on a feeling rather than real data. And it might be possible to structure such a fee in a way that it became a positive incentive for borrowers to draw down sooner rather than later -- such as making the fee 125% refundable if drawdown was within 4 weeks of the auction end, or 150% refundable if drawdown was within 2 weeks of the auction end. Who knows, with an incentive scheme like that it might be possible to negotiate lower underwriting fees because of the resulting reduction in drawdown delays. Those figures may be a bit on the heavy side Mike as I wasn't thinking of refundable initial borrower fees in the pennies. If I was a company director, seeking finance that was essential to the future viability of my business, I would make sure that I was always available to ensure a smooth transition. Communication in this day and age is not a problem so I simply do not buy the 'away on holiday' excuse. In my book it's a load of hogwash and all that's possibly happening is the 'director' is playing off the availability of funding from AC with someone else that may offer more advantageous terms. It really is that simple.
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Post by yorkshireman on Feb 14, 2014 0:25:10 GMT
Is this loan ever going to get to auction? Description says "We apologise for the delay in providing the full credit report, the director of the company has been on holiday so we have been unable to get final agreement on a number of points and consent to release the full report. We are advised that this information and consent will be available in the next day or so" but that was a week ago! Anybody heard anything more recent? AC have maintained a very low profile on this one for the last couple of weeks. 
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mikes1531
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Post by mikes1531 on Feb 14, 2014 4:45:41 GMT
Communication in this day and age is not a problem so I simply do not buy the 'away on holiday' excuse. In my book it's a load of hogwash and all that's possibly happening is the 'director' is playing off the availability of funding from AC with someone else that may offer more advantageous terms. It really is that simple. I expect it is, and I thought I said that already. The purpose of this loan always was to cover the period between sale completion and the putting in place of a loan from a 'mainstream' lender. If the borrower can delay the purchase long enough -- and he probably can because he probably has support from the seller because he's paying a premium for the property -- he wouldn't need the AC loan at all and could save himself all the AC set-up fees, and probably a fair amount of interest as well. He'd be crazy not to try.
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bugs4me
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Post by bugs4me on Feb 15, 2014 15:42:29 GMT
This loan has seemingly vanished ... assume the borrower has fond cheaper alternative. Loan now dead - just waiting for the bid money to be credited back into the account Any ideas Chris??
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mikes1531
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Post by mikes1531 on Feb 15, 2014 18:36:29 GMT
This loan has seemingly vanished ... assume the borrower has fond cheaper alternative. Loan now dead - just waiting for the bid money to be credited back into the account I received an email from AC at 1340 today that included... There should be no "bid money to be credited back" because the auction was at the pre-bid stage with no funds actually tied up.
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bugs4me
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Post by bugs4me on Feb 15, 2014 18:41:20 GMT
Loan now dead - just waiting for the bid money to be credited back into the account I received an email from AC at 1340 today that included... There should be no "bid money to be credited back" because the auction was at the pre-bid stage with no funds actually tied up. Ah, good point there Mike. Just popping off to the 24/7 shop to part exchange my brain cell 
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