jonah
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Post by jonah on Feb 22, 2016 22:24:55 GMT
Might be time to have a gander back at Fs then. Thank you all!
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xp67
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Post by xp67 on Feb 22, 2016 22:37:39 GMT
I'm interested to see how many Wind Turbine options come on to the SM, even at 0% I think they will be difficult to shift. I have around £15k in Wind Turbines, and will be listing them at 0% as soon as I can. Not because I'm concerned with the condition of the investment, but because I need the £15k much sooner than expected! I shifted around £15k of 0% loans today alone, and a further £10k went over the weekend. Good to know that sensible loans sold at 0% will still sell.
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jimc99
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Post by jimc99 on Feb 23, 2016 9:33:27 GMT
We are very pleased to announce the launch of a secondary market, enabling investors to buy and sell loan parts. The aim of the secondary market is to give an opportunity for existing investors to liquidate their holdings and for all members to diversify their investments. Once logged in you can access the secondary market by selecting the appropriate section from the normal menu on the left. There is also a help page available which gives further details. More DetailsFundingSecure There are a lot of similarities between SS and FS, more so now that FS is moving into property loans.
However where as SS has a very active secondary market with loans put up for sale being snapped up very quickly, the FS secondary market seems sluggish by comparison. My guess is that since FS have a lot more loans being issued each month and a very healthy loan pipeline that lenders prefer to wait for the new loans to come through.
Anyone have other possible reasons?
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SteveT
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Post by SteveT on Feb 23, 2016 9:38:03 GMT
We are very pleased to announce the launch of a secondary market, enabling investors to buy and sell loan parts. The aim of the secondary market is to give an opportunity for existing investors to liquidate their holdings and for all members to diversify their investments. Once logged in you can access the secondary market by selecting the appropriate section from the normal menu on the left. There is also a help page available which gives further details. More DetailsFundingSecure There are a lot of similarities between SS and FS, more so now that FS is moving into property loans.
However where as SS has a very active secondary market with loans put up for sale being snapped up very quickly, the FS secondary market seems sluggish by comparison. My guess is that since FS have a lot more loans being issued each month and a very healthy loan pipeline that lenders prefer to wait for the new loans to come through.
Anyone have other possible reasons? It's mainly down to the crazy tax situation with the FS secondary market. Any taxpayer buying a FS loan on their SM assumes the tax liability not only for the remaining interest on teh loan part but also all interest already accrued up to the date of sale (which the buyer has paid to the seller). This comes about because FS lenders receive no interest until the end of the loan, whereas SS lencders receive monthly interest. Make sure you fully understand the tax implications before you buy anything on the FS SM
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locutus
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Post by locutus on Feb 23, 2016 9:40:27 GMT
No prefunding. Poor site usability. Possible capital loss when buying on the SM.
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Monetus
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Post by Monetus on Feb 23, 2016 9:46:30 GMT
Yep really not a fan of the Funding Secure SM at all... I'd love to buy some loan parts but it's totally unusable for me investing through a Ltd company as I immediately pick up the tax bill on already-earned interest making it not viable at all.
A huge shame and meaning my holding in FS is substantially less than other platforms.
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SteveT
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Post by SteveT on Feb 23, 2016 9:52:13 GMT
Yep really not a fan of the Funding Secure SM at all... I'd love to buy some loan parts but it's totally unusable for me investing through a Ltd company as I immediately pick up the tax bill on already-earned interest making it not viable at all. A huge shame and meaning my holding in FS is substantially less than other platforms. Actually, those lending through a company are better off because they are taxed on "trading profit" rather than on interest paid, and so can offset the full price paid for the loan-part (including the accrued interest) against the proceeds when the loan completion. Hence, in effect, they're only taxed on the interest earned over the period they own the loan part. It's personal lenders that get stung for tax on the whole term.
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Monetus
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Post by Monetus on Feb 23, 2016 9:54:59 GMT
Yep really not a fan of the Funding Secure SM at all... I'd love to buy some loan parts but it's totally unusable for me investing through a Ltd company as I immediately pick up the tax bill on already-earned interest making it not viable at all. A huge shame and meaning my holding in FS is substantially less than other platforms. Actually, those lending through a company are better off because they are taxed on "trading profit" rather than on interest paid, and so can offset the full price paid for the loan-part (including the accrued interest) against the proceeds when the loan completion. Hence, in effect, they're only taxed on the interest earned over the period they own the loan part. It's personal lenders that get stung for tax on the whole term. Thanks for pointing that out Steve.... that's very interesting indeed! Seems that investing through Ltd with FS could be very beneficial then...
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jimc99
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Post by jimc99 on Feb 23, 2016 9:55:42 GMT
Yes that's a big downside.
If FS paid interest monthly like SS, would that change the tax situation? |
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SteveT
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Post by SteveT on Feb 23, 2016 9:59:31 GMT
Yes that's a big downside.
If FS paid interest monthly like SS, would that change the tax situation? To do that, unless FS have got very deep pockets, either the full interest would have to be withheld from the sum advanced when loans drew down (as per with SS) or else FS borrowers would have to pay monthly interest (as per with FC / AC / etc.). That would be a fairly major change in the FS lending model (but something I guess most would favour)
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SteveT
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Post by SteveT on Feb 23, 2016 14:18:17 GMT
I'm nowhere near the first to say it, but... What wouldn't be a big change to the model, but fairer to all, would be to simply remember the accrued interest and pay it to the appropriate lenders for the time they held the loan part when it is received from the borrower a'la SS / AC etc. Hopefully fundingsecure , having now seen the benefit of providing a SM (evidenced by increased appetite for new loans / no bonus rates etc), will also see that if the SM becomes clogged due to it's nature the knock on effect will be a stagnating PM too. A healthy flowing SM is the key to the extra liquidity the SM has attracted and that liquidity will naturally flow uphill to the primary market, given 'alf a chance. As it stands, the list of potential buyers on the SM is restricted primarily to business accounts and non-tax payers. It's within your power FS to free up the SM and get things moving again and if the current pipeline comes to fruition while the SM is clogged, I can well imagine more underwriting being required on a regular basis. It'll be interesting to see how Rishton goes. I fully agree. I was just looking at the pipeline loans and thinking there are some very large property loans there by FS standards, all at 12% (including a £2.1m, £1.4m and £1m). If those sorts of loans are going to start filling quickly (rather than everyone sitting on the sidelines for days on end until they get to 90%+ filled) then I think there needs to be either: a) structural change to the way interest is handled on the SM to make it very much more liquid, as per your suggestion b) interest accrual from date of investment (or at least from a clearly defined date within a couple of days of launch) c) the return of bonus interest to motivate the big hitters to dig deep (which has to be the most expensive option for FS) I reckon the combination of a) + b) would work wonders, moving FS much closer to the SS model.
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duck
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Post by duck on Feb 23, 2016 15:52:02 GMT
Actually, those lending through a company are better off because they are taxed on "trading profit" rather than on interest paid, and so can offset the full price paid for the loan-part (including the accrued interest) against the proceeds when the loan completion. Hence, in effect, they're only taxed on the interest earned over the period they own the loan part. It's personal lenders that get stung for tax on the whole term. Thanks for pointing that out Steve.... that's very interesting indeed! Seems that investing through Ltd with FS could be very beneficial then... I know this has been a point of discussion on another platform but I haven't investigated it yet with FS. If FS are duty bound to report figures (interest paid for individuals) to HMRC will any submitted figures for Ltd Co's tie up with a calculated trading profit in submitted accounts?
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jonah
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Post by jonah on Feb 23, 2016 20:17:14 GMT
Surely the other possible answer would be an fs ISA? That would remove the tax implications for buying on the SM. Obviously early repayment and paying someone else their interest would still be there.
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SteveT
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Post by SteveT on Feb 23, 2016 20:29:35 GMT
Thanks for pointing that out Steve.... that's very interesting indeed! Seems that investing through Ltd with FS could be very beneficial then... I know this has been a point of discussion on another platform but I haven't investigated it yet with FS. If FS are duty bound to report figures (interest paid for individuals) to HMRC will any submitted figures for Ltd Co's tie up with a calculated trading profit in submitted accounts? My understanding is that platforms are not required to submit interest figures to HMRC for company accounts, just personal accounts.
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mikes1531
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Post by mikes1531 on Feb 24, 2016 14:22:42 GMT
Does anyone know whether the SM actually has any activity these days? The number of parts for sale keeps growing -- there are now 726 parts for sale -- and the parts I've watched on the first page don't seem to be changing much, if at all. Selling at a premium must be rather dead at the moment -- there are 139 parts being offered at par now.
I'd guess that the implications of the tax situation are starting to sink in, killing most individuals' incentive to purchase any part that was activated more than a few days ago. And there must not be that many companies and non-taxpayers wanting to buy 'used' parts.
I expect it won't be long before the only way to shift anything reasonably quickly will be to sell at a discount, and the people willing to do that will be limited to higher-rate taxpayers, those needing to extract money from their account, and people trying to avoid the risk of defaults. While there may not be a lot of investors in the first two categories, I suppose there will be plenty in the third.
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