AC - QAA a staggering 3.75%

As long as there's a queue or cash reserves or an investment that can be instantly disposed of then it'll be measured in milliseconds.  The reported time actually inflates the time a little as we start measuring from the beginning of the transaction as a whole to when the funds are released.  So at the moment we'd just about cope with the full £1m being withdrawn but that obviously changes depending on the investments made.

Hi guys, I've been offline for the last 2 weeks so have returned to find a load of things have changed to AC.  To help me understand what has happened could someone explain about

1)  the new "cash waiting deal"?  To me it looks like a way for AC to pay a low rate of interest to flush cash out people's accounts which then picks up the shrapnel so that exisiting targets never get replenished, hence they "pay Peter less to steal take from Paul".  If so it look pretty dodgy.  Please set me straight before I start to take a position on this.

2)  As to the new target box for new loans, is there an single page where all the features are explained with the calcs behind them?

Confused and a bit frustrated that AC can come up with this highly complicated stuff yet still do not hit its loan drawdown dates, if they had done this there would have been no need for this new mechanism 

Thanks Bigfoot, I guess my concern in (1) is that many of my old targets are below their old holding (more so than before I went off line), now, from reading the details this am, I see that this new account takes precedence over individual's accounts so my old "targets" are partially not being filled up because the account is taking them, hence the account is being paid 3.75% while I am no longer being paid say 10%.  I guess the 6.25% is going somewhere??

You may be right that this is a one off £1M but if AC change their mind, as if that ever happens, what is to stop them going to £10m.

So maybe my next question is, who is getting the 6.25%?

I presume the QAA is 'profitable' for AC - as a shareholder I certainly hope so and that it will increase in size from the current £1m.

3.75% isn't a bad rate of interest but if most can't find enough accounts paying between 3%-5% for instant access on cash - with FSCS protection/no capital risk, they are not trying hard enough. (of course if you have £100,000's spare to play with then you may run out of suitable accounts!)

In fact, if AC lower the rate to far (and in my view 3% or below would be too far) then they may encounter the opposite problem where investors just take any uninvested cash and keep it elsewhere - lowering liquidity on the platform.

The big problem, as has been said before, is that the loans are just not there at the moment. From before the launch of QAA, I have had cash waiting for investment in both my GEIA and GBBA accounts - and the majority is still not invested. If not for QAA, I would have removed my cash from the platform.

A couple of questions come to mind about how QAA works (apols if they have already been answered):

1. If one has uninvested funds in the cash/GEIA/GBBA accounts which are currently in QAA, and moves the funds to a different account- does it remain in the QAA or leave and go back to the queue.

2. As above, if funds are in the cash account and move to a direct investment in the QAA (or vice versa) do they remain in the £1m cap or lose their place.

It would be helpful if AC could give an estimate of the amount of queued cash waiting to get into the account or perhaps more usefully, when one's non QAA cash is likely to get in - something like Ratesetter do when showing where your money is in the queue to be lent out..

I think that the reason your targets are not filling has much more to do with the lack of new loans on the site. I see only one loan drawn since the 10th August. It is the draw downs that release other loans from other investors diversifying and underwriters making room. The priority given to the QAA might be a concern, but my guess is that at the moment it is buying a higher proportion of not very much.

The fund holds a high proportion of cash, which pays no interest. The fund contributes to the provision fund. AC will take some of the rest. AC have said that they started off small and will, most likely, increase the global cap on the QAA.

My view, FWIW, is that either AC start to bring the much promised 3-4 loans per week, and increasing from there, and the QAA priority won't matter much, or they don't and it won't matter much for different reasons.

Quite right re "The spread isn't that big (don't know exact level as it's a black box account) but most is held in cash hence the quick exit." - its a very small spread. We dont make much from this lending - less than  a normal account but it's a good service for lenders with spare cash to lift average returns.

We have a plan to avoid this account just pulling in long term money seeking this quick access 3.75% and blocking the sweep benefit. Give us a short while.