adrianc
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Post by adrianc on Oct 20, 2015 15:09:44 GMT
It's officially PBL64, and they've just sent out emails saying "pre-fund now, because it's live soon"...
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Post by lb on Oct 20, 2015 15:10:18 GMT
The loan is to repay an existing loan of £1.5m. I would be happier if the SS loan was for £1.5m rather than £2m. AIUI, SS retain fees and interest at drawdown. So in order for the borrower to obtain £1.5M to pay off their existing loan they'd need to borrow more than that from SS. For a 12-month loan at 12% interest to lenders and maybe 6% to SS, plus maybe a 3% arrangement fee, the borrower would receive only 79p for every £ borrowed. So they'd have to borrow £1.9M in order to receive £1.5M (£1.9M x 79% = £1.5M). And the borrower would need even more than that if they really need more than £1.5M to completely clear the existing loan because of any interest that might be outstanding or any termination fees that might be owing. is the loan of £2m including the interest? is the rate to borrower 18%? how do you find out these details, there is nothing on the loan particulars?
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sam i am
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Post by sam i am on Oct 20, 2015 15:41:51 GMT
It's officially PBL64, and they've just sent out emails saying "pre-fund now, because it's live soon"... Sounds like they're having trouble filling this one...
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arbster
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Post by arbster on Oct 20, 2015 15:43:36 GMT
It's officially PBL64, and they've just sent out emails saying "pre-fund now, because it's live soon"... Sounds like they're having trouble filling this one... Cashback...?
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sam i am
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Post by sam i am on Oct 20, 2015 15:46:58 GMT
Sounds like they're having trouble filling this one... Cashback...? SS will probably wait to see how it goes after launch. Possibly given the recent experience lenders feel there is no need to pre-fund loans of this size but may fill it up when it goes live.
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adrianc
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Post by adrianc on Oct 20, 2015 15:57:46 GMT
Looking back at the pre-fund loans so far, there's been a few that have got very close - or over - the £2m this loan's after.
The last new loan was three weeks ago. Sure, it's only just cleared out the backlog, but it was at the end of a crazy period for new loans. Ten loans, about £16m, in a month... The last two of them were only tiddlers, massively over-subscribed. The last big, unfilled one was only a couple of days short of a month ago.
Will it fill? I dunno. But I don't think it'll be a million miles short. I'm going to guess at 85%.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Oct 20, 2015 16:11:46 GMT
AIUI, SS retain fees and interest at drawdown. So in order for the borrower to obtain £1.5M to pay off their existing loan they'd need to borrow more than that from SS. For a 12-month loan at 12% interest to lenders and maybe 6% to SS, plus maybe a 3% arrangement fee, the borrower would receive only 79p for every £ borrowed. So they'd have to borrow £1.9M in order to receive £1.5M (£1.9M x 79% = £1.5M). And the borrower would need even more than that if they really need more than £1.5M to completely clear the existing loan because of any interest that might be outstanding or any termination fees that might be owing. is the loan of £2m including the interest? is the rate to borrower 18%? how do you find out these details, there is nothing on the loan particulars? is making likely suppositions in order to illustrate a point. However, retaining interest up front is fairly standard practice for SS, as shown by their statement on their risk page : " We can guarantee investors interest payments for the duration of a loan's term due to deducting this interest from the loan's net advance to the borrower" and the following statement is from their FAQ's on the website which shows that their typical lending rate would be 18%: " Lendy Ltd t/a Saving Stream makes its profit from the difference in interest rate that is charged to its borrowers and the rate that it pays its investors. We typically lend to borrowers at 1.5% per month and borrow money from investors at 1% per month.
This margin may seem excessive however the overheads of a) finding such borrowers and b) ensuring the security of an asset are costly and therefore demand this margin."
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Post by pepperpot on Oct 20, 2015 16:25:39 GMT
Just gone live with £279,500.00 available. # Investor |
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Oct 20, 2015 16:29:08 GMT
Pleased to see we got the full allocation since I pre-empted the SM sales for the full amount  ( #frontrunning  ) |
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adrianc
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Post by adrianc on Oct 20, 2015 16:30:01 GMT
Just gone live with £279,500.00 available. Down to £256k, 13% already. Unless they discover a bunch more down the back of the sofa, looks like my 85% guess was about bob-on...
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Investor
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Post by Investor on Oct 20, 2015 16:35:45 GMT
Just gone live with £279,500.00 available. # InvestorThanks pepperpotSheet updated, however am away for a couple of weeks from today so if any loans go live in that period please do not expect the usual customer service levels!
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SteveT
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Post by SteveT on Oct 20, 2015 16:57:30 GMT
Just gone live with £279,500.00 available. Down to £256k, 13% already. Unless they discover a bunch more down the back of the sofa, looks like my 85% guess was about bob-on... My guess is we'll see a few more chunks of this one appear in the coming days (I've a suspicion that SS feel something around the "10% available" mark helps keep purchases ticking over) but we'll see. Either way, what a painless way to raise £1.5M+ in no time at all!
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ramblin rose
Member of DD Central
“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Oct 20, 2015 17:01:09 GMT
............. what a painless way to raise £1.5+ in no time at all! Is that the interest on your £12.50 loan part, or did you miss an 'M' somewhere along the line?
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Post by chielamangus on Oct 20, 2015 17:25:50 GMT
I'm not convinced by mikes1531 calculation. Surely the 18 per cent charged by SS would cover all fees? If not, and if there is another 2-3 per cent fee to pay, then this takes the interest rate on this 12 month loan to 20-21 per cent. One would have to be desperate to pay this, and I would have thought another P2P platform could be more competitive quite easily. Paying all interest and fees upfront makes the loan even more expensive for the borrower. SS should explain what the extra £500k is to be used for - interest/fees? working capital for the firm? dividends even! There really is insufficient information on the financials of this loan. Addendum: Under the new structure, the risk of each loan has passed from Lendy to the lender so we need to do more DD than hitherto. |
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Oct 20, 2015 17:32:33 GMT
Surely the 18 per cent charged by SS would cover all fees? If not, and if there is another 2-3 per cent fee to pay, then this takes the interest rate on this 12 month loan to 20-21 per cent. One would have to be desperate to pay this, and I would have thought another P2P platform could be more competitive quite easily. Paying all interest and fees upfront makes the loan even more expensive for the borrower. That isn't unusual in the world of bridging finance; it's a number of years since I looked into it but rates of 30% weren't unusual at the time. The nature of these projects is such that there is not usually an income stream to cover interest payments, so the more typical finance that retail borrowers might be used to seeing aren't available to them, and so the more expensive, rolled-up interest loans are what they can have. The business borrowers don't have to be desperate to warrant paying it - they just need an expectation of making more than that out of their venture, which is what most of them do have, and it becomes worth it to them.
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( #frontrunning 
)
