chrisf
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Post by chrisf on Dec 8, 2015 17:42:48 GMT
I don't think the ability to fund afterward is the real problem and i would also hate to see to go. A percentage cap could probably work. Limit the per funding amount to 10 % of you total investment plus any cash balance. This will mean people who want more than 10% will have to transfer money into their accounts but everyone else will be restricted to a fairly decent chunk. That seems eminently fair and feasible... Comments please. Yes, 10% sounds good to me. We certainly need a cap, I'd say try 10% and if that doesn't work, adjust as necessary.
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pom
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Post by pom on Dec 8, 2015 17:43:23 GMT
And on a loan of only $400k+ so you had to prefund 1000% of your real requirement to get it. This ratio is climbing steeply so I reckon on any loan under £500k you should now prefund 1200-1500%. Madness. The simplest solution is to restrict prefunding to available funds. Prefunding and the ability to invest now /pay later are both individually desirable, but in tandem they are causing chaos which will only get worse. We recognise that as a solution but would people stand for it? Only if you could tell us exactly when the pre-fund window would begin/end(ie loan golive) so that we're not having to guess how long to leave funds uninvested...
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stevio
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Post by stevio on Dec 8, 2015 17:43:55 GMT
I don't think the ability to fund afterward is the real problem and i would also hate to see to go. A percentage cap could probably work. Limit the per funding amount to 10 % of you total investment plus any cash balance. This will mean people who want more than 10% will have to transfer money into their accounts but everyone else will be restricted to a fairly decent chunk. That seems eminently fair and feasible... Comments please. Your biggest USP is that you don't need funds to hand to pre-fund, do you really want to throw that away and just be the same as your competitors? So what if someone pre-funds too much, there is always some available from people over estimating their pre funding on the SM as well as other loans
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Balder
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Post by Balder on Dec 8, 2015 17:44:04 GMT
I don't think the ability to fund afterward is the real problem and i would also hate to see to go. A percentage cap could probably work. Limit the per funding amount to 10 % of you total investment plus any cash balance. This will mean people who want more than 10% will have to transfer money into their accounts but everyone else will be restricted to a fairly decent chunk. That seems eminently fair and feasible... Comments please. I think this would be a fair approach for small and large investors and also allow new entrants to "ramp up" their holding as quickly as they wish.
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pom
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Post by pom on Dec 8, 2015 17:47:00 GMT
I don't think the ability to fund afterward is the real problem and i would also hate to see to go. A percentage cap could probably work. Limit the per funding amount to 10 % of you total investment plus any cash balance. This will mean people who want more than 10% will have to transfer money into their accounts but everyone else will be restricted to a fairly decent chunk. That seems eminently fair and feasible... Comments please. Yep suits me
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oldgrumpy
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Post by oldgrumpy on Dec 8, 2015 17:46:50 GMT
"....MT's "limit per day until date x" approach. But they have far few investors to worry about than SS, and it would alienate the big hitters....." (+FS)
What on earth is the problem with making the big hitters wait 24 hours to mop up the excess after the mainstream of lenders take a fair share? The big boys will still get a lot as long as the initial allowances are fairly moderate and targetted so that each loan lasts into a second day. As long as the loan is fully funded by the second day (or later for very large loans) why should SS worry about a 24 hour spread of the action?
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registerme
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Post by registerme on Dec 8, 2015 17:50:16 GMT
Fair point well made  . |
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mikes1531
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Post by mikes1531 on Dec 8, 2015 17:52:30 GMT
The simplest solution is to restrict prefunding to available funds. Prefunding and the ability to invest now /pay later are both individually desirable, but in tandem they are causing chaos which will only get worse. We recognise that as a solution but would people stand for it? No. That would upset a lot of people, so IMHO that suggestion should be rejected. But the idea of limiting pre-funding based on the size of one's portfolio plus their available cash strikes me as a reasonable balance. Another possible adjustment might be to introduce a minimum allocation so that those with smaller accounts aren't limited to tiny pre-funds and even tinier investments. Unless there are an awful lot of investors with very small accounts, I don't think that giving them a slight advantage would distort the results for the rest of us.
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Post by solicitorious on Dec 8, 2015 18:07:03 GMT
That seems eminently fair and feasible... Comments please. Yes, 10% sounds good to me. We certainly need a cap, I'd say try 10% and if that doesn't work, adjust as necessary. Since the % apportionment process is still going to be applied, and the majority of investors would be capped from making 'silly' pre-funding requests in an attempt to beat the system, it would seem fair to also reduce the maximum request from £250k to maybe £100k - even if that is less than 10% of some fatcat's holding - or perhaps a limit of 10% of the loan size for the initial bid...
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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 Dec 8, 2015 18:14:13 GMT
And on a loan of only $400k+ so you had to prefund 1000% of your real requirement to get it. This ratio is climbing steeply so I reckon on any loan under £500k you should now prefund 1200-1500%. Madness. The simplest solution is to restrict prefunding to available funds. Prefunding and the ability to invest now /pay later are both individually desirable, but in tandem they are causing chaos which will only get worse. We recognise that as a solution but would people stand for it? This person certainly doesn't want to - it would be a retrograde step as far as I'm concerned. I'm not in a phase of adding new money just at the moment, so there's only ever money in my account when interest has been paid; I pay for all my new loan purchases very promptly by selling down older loans to willing purchasors, using the SM in a mutually beneficial way. Many other early lenders will no doubt be in a similar position. The suggestion of limiting pre-bids to a percentage of existing holdings plus cash sounds like a potentially good way forward although, of course, lenders with huge accounts would still be able to skew things dramatically.
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mikes1531
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Post by mikes1531 on Dec 8, 2015 18:29:45 GMT
If the massive over-demand were to quickly reverse for some reason it could prove catastrophic for the platform. I'm not sure that would be a disaster for the platform, but it certainly could be a disaster for investors. People are putting in big pre-funding requests with the expectation of being allocated much less than that, and with the assumption that if they got it wrong they could dump any overallocation they receive on the SM and solve their problem in a hurry. I do wonder, however, whether there's really a 'massive' over-demand, or just a slight imbalance. It probably doesn't take much more than a small imbalance for the SM to behave the way it has been lately. The flip side of that possibility is that it wouldn't take much of a change in the supply/demand balance to put the SM into a position where parts put up for sale and would sit there unbought for a considerable time. And that would cause a problem for those investors who either over-prefunded or overbought on the SM while assuming that they didn't need to come up with the cash for those purchases because they could sell some of their existing parts on the SM to eliminate their negative account balance. And to get back to my first sentence, if enough people cannot settle their negative balances then I suppose it could put SS into a rather awkward position depending on how much working capital they have available.
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registerme
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Post by registerme on Dec 8, 2015 18:36:15 GMT
My thinking was along the lines of a disaster for investors could easily turn into a disaster for a platform...
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oldgrumpy
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Post by oldgrumpy on Dec 8, 2015 18:38:24 GMT
SS should certainly be in a position to issue yellow/red cards to investors who abuse the facility whereby bids can be made which throw accounts into a temporary negative balance. I consider that service to be a privilege, though I do wonder sometimes how SS are allowed to operate that way.
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SteveT
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Post by SteveT on Dec 8, 2015 18:41:08 GMT
I don't think the ability to fund afterward is the real problem and i would also hate to see to go. A percentage cap could probably work. Limit the per funding amount to 10 % of you total investment plus any cash balance. This will mean people who want more than 10% will have to transfer money into their accounts but everyone else will be restricted to a fairly decent chunk. That seems eminently fair and feasible... Comments please. Limiting your pre-funding options to 10% of your portfolio plus any cash balance strikes me as a good compromise (assuming this means per pipeline loan and not across the whole pipeline). Existing lenders could continue to "refresh" their portfolios in proportion to their current holdings and new lenders would be able to ramp up faster by adding cash. The other thing I would suggest is a tweak to the "maximum pre-funding" cap on small pipeline loans. It seems odd that a £20k cap is applied on a £500k loan but a £550k loan can have bids up to £250k. How about: < £500k = £10k cap £500k - £1m = £20k cap
£1m - £2m = £50k cap
> £2m = no cap
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mikes1531
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Post by mikes1531 on Dec 8, 2015 18:42:11 GMT
My thinking was along the lines of a disaster for investors could easily turn into a disaster for a platform... By the time I finished writing my previous post I felt I was agreeing with registerme.
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