Possible "Pre-funding" scheme for the SM?

Prior to pre-funding, a mere three months ago, we didn't get any documents at all, you had to buy virtually immediately if you wanted a loan part. Thanks to the very liquid SM you could dispose of it if on reading the docs you decided you didn't like the loan. I think pre-funding which has now applied to 15 loans is brilliant, That we get loan documents a while before they go live is a great and welcome improvement, and I find the pipeline reassuring in that at least I know there are loans on the way even if some get pulled. In the four months you have been investing SS have launched an average of more than one loan a week, pretty impressive in my book.

....investing more in new pre-funded loans initially and managing down your stakes later

Sound advice IMO.

Working from the premise that the risk associated with a loan in it's early months will be almost non-existent, I have previously invested heavily in new loans and then diversified to build a substantial portfolio. I also reduce my holding in every loan as it approaches it's end date and usually sell-out totally with one month to go.

                   I also reduce my holding in every loan as it approaches it's end date and usually sell-out totally with one month to go.

Do you ever worry about the poor sucker who has taken on all the risk after you have taken most of the interest?

Nothing wrong with that strategy at all, makes perfect sense. I'd feel much worse about dumping SM tax liabilities to someone on FS than selling out of a loan prior to its completion date on SS.

Why on earth would I want to sell my loan holdings at a reduced premium, when I can sell immediately at the moment at no loss to myself and at no extra cost to the buyer. It makes little sense doing this just to pander to the whinges of people who seem to think they have a god given right to invest what they want, when they want. If people don't like it, they are well within their rights to take their money elsewhere and leave SS to the rest of us who are perfectly happy with the status quo

You cannot sell at a premium here at present so the concept of selling here at a reduced premium is moot.

However, the problem that ladywhitenap was complaining of was lack of supply and a proposal to have a queue system to allocate from the limited supply. My post referred to the possibility of offering a price above par to encourage more people to choose to sell, hence potentially reducing the supply-demand imbalance.

Yes, I've been following the discussion. You're in general wrong in suggesting that it cannot be called liquid, since I've sold a couple of tens of thousand Pounds of loans there.

Bids there tend not to be very successful though I have sold once or twice to a realistic bid. Usually the bids are around or below par and that's not normally enough to find a willing seller. I've also made some successful bids myself, encouraging sellers with a realistic bid price.

There is some of the same effect that can be seen here in new loans, with larger loans at lower interest rates or with less desirable properties taking longer to move. I've had success at times in selling more rapidly just by offering a modest discount in the region of 0.1 below par.

I think it needs some refining to handle larger loan volumes but that it has the desirable properties needed to encourage liquidity at a range of interest rates: the key feature in that being the ability to buy or sell at premiums and discounts so you can adjust prices to match interest rate moves and supply and demand shifts. So long as there is a massive over-supply of buyers the sellers at par-only markets who are willing to sell even knowing that they are getting less than they could will be happy enough, with the buyers complaining about lack of supply.

You can't "buy at a loss" .. You can overpay, but there is no loss unless you sell for less than you bought for.

I'm with James on this .. It ain't a market unless there is a price varying mechanism.