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Post by aloanatlast on Oct 19, 2015 19:22:03 GMT
So was this part of the plan that they forgot to mention at the investor evening etc, or have they just thought it up to avoid any more late-cashback incidents?
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blender
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Post by blender on Oct 19, 2015 19:41:45 GMT
So was this part of the plan that they forgot to mention at the investor evening etc, or have they just thought it up to avoid any more late-cashback incidents? Yes, right, but it was not really appropriate for the 'investors' (ex-lenders). Meanwhile the probably presentation at the 'customers' (ex-borrowers) evening might have gone: "P2P lending has developed and grown within FC in just a few short years. Instead of dealing directly with many small and sometimes difficult lenders to get your loan funded at an acceptable rate, its now really only FC you will be dealing with. We decide whether a loan can be made, the rate you pay according to risk, and in effect you can look upon FC as your lender. It is really our responsibility to fund the loan offers we make and to manage the investors during the process of funding and, importantly, to look after you and shield you from individual investors if there are times when repayments become difficult. In fact we work quite like a bank in making lending decisions, but with the important difference that it is simpler, less expensive in fees and less taxing in security required, because the risk is passed on to thousands of small investors who really are only interested in the general return being better than savings rates."
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Post by aloanatlast on Oct 19, 2015 20:03:59 GMT
In fact there's no longer any vestige of a reason to bother with a primary market at all. They could receive a loan application in the morning, disburse it by teatime and dump the whole lot on the SM. For the lenders and Autobid very little would change.
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ablender
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Post by ablender on Oct 19, 2015 20:38:57 GMT
Now you come to mention it, I thought the P2PFA had some specific objections to people using platform money to fund loans? Agree that filling SME loans is a big departure from what they did with property loans, where the defence was that the developer had commenced development and depended upon later tranches. It would be far more transparent and honest if they simply added cashback to loans that were not filling up. They should have enough data to see which those will be by now - most of us on this forum could probably call it! They confessed to not having the answers yet - it doesn't feel like filling the loans themselves ought to be one of them, really. Mischievously, I wonder how much influence readers of this forum have on filling the 35%. If we all voted with our feet and didn't invest in the "cashback candidates" en masse, would they add cashback sooner, draft in bigger chunks of their own cash or even send "rejected" PLs to the WL market, as per my conversation last week...? Do not count me in. None of my money is going that way. Not at those rates.
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Post by loanstar on Oct 19, 2015 21:00:47 GMT
On another thread there was talk about the fun being lost. But I can see a new situation now which will make me smile for a week. FC help fill a loan which I have not made an offer on (used to be called a bid). The company then goes belly up after the second repayment leading to their money being trapped for the next five years plus as the guarantors makes repayments too small to be paid out.
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Post by GSV3MIaC on Oct 19, 2015 21:09:19 GMT
Well, I'm going to be boycotting the A+ candidates in future (unless cash backed), based on having sucked 45% of my funds out of FC already, with the rest largely up for sale .. will keep sniping at the odd C/D/E and cashback loans, but the rest look unappealing (down to "extremely unappealing" for the 12 month A+, which everyone else seems to love). I shall also be pressing FC for some clarity on this "bidding to fill the loans" themselves policy, since it doesn't seem to be covered by even the newest T&Cs.
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registerme
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Post by registerme on Oct 19, 2015 22:59:29 GMT
So was this part of the plan that they forgot to mention at the investor evening etc, or have they just thought it up to avoid any more late-cashback incidents? Yes, right, but it was not really appropriate for the 'investors' (ex-lenders). Meanwhile the probably presentation at the 'customers' (ex-borrowers) evening might have gone: "P2P lending has developed and grown within FC in just a few short years. Instead of dealing directly with many small and sometimes difficult lenders to get your loan funded at an acceptable rate, its now really only FC you will be dealing with. We decide whether a loan can be made, the rate you pay according to risk, and in effect you can look upon FC as your lender. It is really our responsibility to fund the loan offers we make and to manage the investors during the process of funding and, importantly, to look after you and shield you from individual investors if there are times when repayments become difficult. In fact we work quite like a bank in making lending decisions, but with the important difference that it is simpler, less expensive in fees and less taxing in security required, because the risk is passed on to thousands of small investors who really are only interested in the general return being better than savings rates." Which is why I asked, a couple of weeks ago, why they didn't go the whole hog and just turn themselves into Zopa that did SMEs rather than consumer. As it is they're neither fish nor fowl. I suspect that we'll see a transformation if and when the investment trust appears. Ironically enough I'd actually be more inclined to send money their way if they were an "SME Zopa", as opposed to the continual draw down I'm on at the moment.
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Post by aloanatlast on Oct 20, 2015 2:33:54 GMT
I expect we'll see Autobid changed to drop the lowest-%-filled preference and just fill the loans on a first-come first-served basis, as at Zopa.
But at least Zopa had the decency to start a compensation fund. FC clings to the pretence that they don't need one because users can make a considered choice of their risks.
Zopa also put a lot of effort into re-implementing and relaunching, since they saw the new regime as their future. FC is just muddling through until it can do something else.
It's hard to see how the investment trust can coexist with the PL market.
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Post by aloanatlast on Oct 20, 2015 2:48:46 GMT
On another thread there was talk about the fun being lost. But I can see a new situation now which will make me smile for a week. FC help fill a loan which I have not made an offer on (used to be called a bid). The company then goes belly up after the second repayment leading to their money being trapped for the next five years plus as the guarantors makes repayments too small to be paid out. Well it seems they now have a choice of ad-hoc tactics - (a) fill and hold (b) fill and flip (c) late cashback (d) fail. They could add (e) selectively tweaking Autobid. All of which it seems they can apply without warning according to any criteria they like, which might include what they really think of the prospects.
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jimbo
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Post by jimbo on Oct 20, 2015 3:21:56 GMT
Funding Circle are definitely no longer for me. In my view this has been an ill-conceived and ham-fisted implementation of a change that - dress it up however you like - was intended to save costs. All it's doing is losing them the goodwill of their active investor community. I laughed recently when reading the prognosis that this change has improved secondary market liquidity. Of course it has in the short term, because right now the best propositions are those listed on the secondary market! This situation won't last though.
... and now we have Funding Circle themselves topping up loans that their active investor community will not touch at the rates offered. Great model! Doesn't this introduce operational risk into the platform if a critical number go belly up in due course...?
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arbster
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Post by arbster on Oct 20, 2015 8:08:45 GMT
Keep an eye on 16461 today - £14k to go in 5 hours, and it's been averaging about £6k per day for the last 4 days. 2% cashback costs them £5,000 and continues a precedent they probably don't want, but saves them a further loss of investor goodwill. It'll be interesting to see what decision they make.
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arbster
Member of DD Central
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Post by arbster on Oct 20, 2015 8:12:12 GMT
Funding Circle are definitely no longer for me. In my view this has been an ill-conceived and ham-fisted implementation of a change that - dress it up however you like - was intended to save costs. All it's doing is losing them the goodwill of their active investor community. I laughed recently when reading the prognosis that this change has improved secondary market liquidity. Of course it has in the short term, because right now the best propositions are those listed on the secondary market! This situation won't last though. ... and now we have Funding Circle themselves topping up loans that their active investor community will not touch at the rates offered. Great model! Doesn't this introduce operational risk into the platform if a critical number go belly up in due course...? Definitely some operational risk, but FC are sitting on a significant amount of VC money which they've apparently barely touched. I'm sure that shoring up bad investments wasn't what Baillie Gifford, Accel Partners, et al had in mind, though...
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Post by Deleted on Oct 20, 2015 8:44:57 GMT
Fascinating reading, so glad I've stopped wasting my time on FC. FC are clearly in bed with the Institutions and just feeding a little out to retail to keep a sticky mix going. At 1% management fee they are showing all the complacency of t'banks.
Avoid.
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am
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Post by am on Oct 20, 2015 8:58:15 GMT
Keep an eye on 16461 today - £14k to go in 5 hours, and it's been averaging about £6k per day for the last 4 days. 2% cashback costs them £5,000 and continues a precedent they probably don't want, but saves them a further loss of investor goodwill. It'll be interesting to see what decision they make. Is there anything obviously wrong with this loan other than the size and the not particularly appealing net interest rate?
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acky
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Post by acky on Oct 20, 2015 9:02:32 GMT
Keep an eye on 16461 today - £14k to go in 5 hours, and it's been averaging about £6k per day for the last 4 days. 2% cashback costs them £5,000 and continues a precedent they probably don't want, but saves them a further loss of investor goodwill. It'll be interesting to see what decision they make. 1% CB would have seen them home if they'd put it on before now - the fact that they haven't tells me that they're planning on the Office Junior doing a bit more Frantic Clicking in the last few minutes.
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