New Loans Discussion

You're right, it'll have to stay put for the 12 months I guess. But I'd much prefer that LC get their underwriting sorted out so that the market sets its own (more sensible) level for SME loans. With FC no longer a reasonable lending option, I was hoping LC would prove to be a decent alternative.

So I take it then that no-one is buying into the LC inference that all bidders are wholly independant 'individuals'? Quite right too, because there can be no doubt that at least one 'individual' has strong links to the company. They might be bidding independently and at their own risk, but at the same time there are many previous loan auctions that could never have succeeded without that 'individual', and there must be a strong connection. Like others, I'll be heading elsewhere unless rates improve.

Well that last one s**** s****** could have done with some more underwriting.... G*** *** f******** goes 15k over funded and this one is left 25k short.

I take it that this is a teething issue with trying to get the underwriting levels right.  G & F was too much but then a similar sized loan (the wedding venue) about week earlier didn't get loads of competition and lenders achieved rates right at the top of the range.  Who's to predict that one would be popular and the other not so much.  Which is exactly why, from an investor's perspective, at least a chunk of the underwriting needs to come in late rather than early.  That said, there have been at least a couple of loans that I watched to the end that were absolutely textbook in this respect - plenty of room for retail investors to bid at good rates and then with 20-30 mins to go and the loan looking like it wouldn't close, an in-house bid takes it over the line.

As for the bar and restaurant group this morning which ended 25k short, as a 100k loan they should have seen it coming ... I was waiting to see if someone would stump up the difference in the last half hour or so, which would have been perfect.  Who knows, maybe (hopefully!) there might be discussions happening right now about making up the difference.  Also finishing an auction at 8.20am seems a bit of an odd time and won't get a lot of attention in the run up to finishing compared to say the one last night which was prime time for people to chuck in a few extra bids towards the end.  Maybe that also explains lack of underwriting to bring it over the line at the end ... the underwriter was still having breakfast.

It was scheduled to finish at 8.20ish this morning.

I've spotted a bit of a pattern that s******* tends to put up about 50% of each loan.  But I don't think that's the right metric for them to shoot for as I doubt investors are putting more money into big loans than they do into small ones.  In other words, I'd guess that retail lenders are investing a fairly similar amount in each loan.  So instead, they should look at what retail investors are typically bidding in aggregate (not counting re-cycled bids where they were knocked out and re-bid) - my guess is this is in the £15-25k range depending on loan - and then put up the (loan amount) minus (typical amount investors bid) minus (a little bit extra to leave some room).  Then if the loan looks like it's not going to fill, put up the difference 30-60 mins or so before the auction closes.  

So for the loan this morning, I would have predicted that putting up £65k early doors, seeing what happens, then maybe making up a bit of difference, would have seen individual lenders get decent rates, the loan fill and the borrower get a good overall rate.

I have to agree with bjorn's post above.

So what happens now that the loan hasn't filled?