Underwriting and pricing to liquidity not risk

First Question I would have raised had I been at the conference. Quoted from presentation -  “Risk & Reward for Lenders TC lenders appear to demand 10%, Sponsors will look for borrowers who will pay 10% + costs, Best borrowers won’t come to TC if they can’t get loans at a competitive rate.”

I do not think TC lenders demand 10%. I believe most people who invests on ThinCats is at least self opinionated and probably contrarian. In addition I suspect there are a far larger percentage of ex accountants in the frame than ex bankers and as somebody who in the dim and distant past was once involved in branch audits of BCCI and BofA branches I understand the criteria and rules are different for bankers.
What happens in far too many cases where proposals for under 10% are tabled they are based on conventional wisdom rather than expected yield and cash flow. To seize on one example the property is worth £1 million because it is rented out for £60 thousand and the expected yield on residential property is 6%. Fine unless you have experience of the property market in Alberta, Aberdeen or Amsterdam. I also grew up in South London and no words about gentrification could change the nature of the property.
As a second point in many cases the exit process is that the loan will be refinanced at the end of the term. Now suppose that the real mid point between what you can receive on deposit and what a prime borrower can obtain funds for is 8% (not impossible with inflation at 6%) and investors in property need that plus 2% and see what that does to the capital value. There was also a contingent capital gain on the properties which was not quantified but could have put the loan to value ratio to 110%.

After eliminating, the inflation guaranteed wind turbine loan, various ThinCats Syndicate Loans where the rate is a forecast and St***t, which about as close as I have ever found to being simultaneously venial and charitable. My weighted average is 9.5%. I do not demand pre costs 10%, what I am looking for is very low risk loans at inflation plus at least 2%. For the most part the business plan is simple and backed by trading history and figures that have been actively reviewed as opposed to bunged into a spread sheet by a copy typist then reformatted by a lunatic (Not Ludgate Steve).

Most of the sub 10% loans that have failed to fill had a high risk element to them. Many of the plus 10% loans which filed had a huge risk to them. I used to have two categories of loan, the last eight months have forced me to add a third :
A: Acceptable level of risk subject to maximum investment in sector or company.
B: Bargepole too high a level of risk full stop.
C: Catastrophe question is no longer will it go broke but when will it go broke.

At the moment there are just too many lenders chasing not enough solid propositions. Sad to say I think it will take a couple of big losses before the area starts valuing risk. I did not see anything I fancied in November. Loans where the security is partially provided by 10 new custom built machines do not appeal. While the old Thin Cats forum is still up I suggest searching for the Green as opposed to Purple amphibian loan.