adrianc
Member of DD Central
Posts: 10,022 
Likes: 5,148
|
Post by adrianc on Dec 8, 2015 18:46:30 GMT
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. By all means - but might it not help us to help you by giving us more of a clue as to how much we might need to transfer and when...? It's not as if the pipeline, as a whole, is thin. It's just not very evenly spread... There is currently £18.5m in the pipeline list. Go with the 5,500 investors figure, and that's nearly £3,500 each. Today's shenanigans have been off the back of £2.3m going live across three loans, with only another £3m having gone live over the last month and a half. At that rate, the current pipeline will take you through until the end of April. You want us to commit cash for that long, just in case...?
|
|
registerme
Member of DD Central
Posts: 6,624
Likes: 6,437
|
Post by registerme on Dec 8, 2015 18:53:44 GMT
The other advantage implementing some kind of pre-funding constraints would provide is that it would introduce, or at least could encourage, a bit more structure to the whole process. If there were defined time-scales and processes there would be less need for people to "frantically throw money at their screens" without reading docs first etc. That would take pressure off the site / back-end and give us all a calmer experience  . |
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 8, 2015 18:53:47 GMT
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. Is there an existing pre-funding cap for smaller pipeline loans that's different from the cap on larger loans? If so, is it £20k on loans up to £500k, as suggested by SteveT? And how/where/when is it applied? Looking at the list of pipeline loans now, there are a number of sub-£500k loans and the pre-funding options I see on the drop-down lists for those are the same as for larger loans -- going up to £250k.
|
|
rogerbu
Member of DD Central
Posts: 398
Likes: 213
|
Post by rogerbu on Dec 8, 2015 18:56:16 GMT
Surely the simplest solution, in general, is to limit "going short" to a percentage of their portfolio size *at all times*. So if 10% of your portfolio is £500 then your balance can never go more negative than -500 - be it because of a pre-fund request being satisfied or because you are buying on the SM. I like the simplicity of this.
|
|
|
|
Post by pepperpot on Dec 8, 2015 18:57:26 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. I think they can operate that way because the pre-drawdown interest we receive is discretionary and paid to us by SS. So negative balances are in effect a small temporary loan from SS to us, it's not yet in the hands of the borrower until it's listed as 'Yes' under 'Drawndown'. They have the option (probably exercised a few times already) not to pay that interest to anyone doesn't play within the rules and indeed canceling the 'bid' by passing it onto someone who does adhere to the rules, via the SM.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 8, 2015 18:57:28 GMT
Surely the simplest solution, in general, is to limit "going short" to a percentage of their portfolio size *at all times*. So if 10% of your portfolio is £500 then your balance can never go more negative than -500 - be it because of a pre-fund request being satisfied or because you are buying on the SM. I like the simplicity of this. Me, too.
|
|
SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
|
Post by SteveT on Dec 8, 2015 18:58:37 GMT
I like the simplicity of this. Me, too. Yup, that's pretty neat! Although it could make for some interesting headaches if a 2nd or 3rd loan is launched on the same day.
|
|
am
Posts: 1,495
Likes: 601
|
Post by am on Dec 8, 2015 19:00:37 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. There are people like me who would buy small quantities of decent loans on the secondary market if they'd sit still long enough for me to read the documents.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 8, 2015 19:06:42 GMT
There are people like me who would buy small quantities of decent loans on the secondary market if they'd sit still long enough for me to read the documents. : Have you considered looking through the documents now and deciding which loans you'd like to have more of and which you want to avoid? Then, when a part appears on the SM you'd know whether or not you should try to buy it.
|
|
registerme
Member of DD Central
Posts: 6,624
Likes: 6,437
|
Post by registerme on Dec 8, 2015 19:09:12 GMT
Same here am, but in the face of a general rout, which whilst we should all hope we never see I consider to be one of the bigger risks we / the platform face, could see the over-demand flip 180 to over-supply overnight. The way I approach this at the moment is to have a "watch list" of loans where I've already decided I want more exposure, and then if I happen to see any come up buy. But it could be so much better implemented as functionality provided by the platform. Be able to set target investment sizes for loans PBL a, b and c, have some kind of queue (simple and transparent), and have funds ready to go and / or a commitment to fund post purchase (perhaps with a penalty if you don't meet the offer when it gets made..... |
|
star dust
Member of DD Central
Posts: 2,998
Likes: 3,531
|
Post by star dust on Dec 8, 2015 19:14:24 GMT
Surely the simplest solution, in general, is to limit "going short" to a percentage of their portfolio size *at all times*. So if 10% of your portfolio is £500 then your balance can never go more negative than -500 - be it because of a pre-fund request being satisfied or because you are buying on the SM. Only if they had an instant deposit system / and / or only released one new loan per day, or informed you exactly when they were going to release loans.
|
|
SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
|
Post by SteveT on Dec 8, 2015 19:14:11 GMT
Same here am, but in the face of a general rout, which whilst we should all hope we never see I consider to be one of the bigger risks we / the platform face, could see the over-demand flip 180 to over-supply overnight. The way I approach this at the moment is to have a "watch list" of loans where I've already decided I want more exposure, and then if I happen to see any come up buy. But it could be so much better implemented as functionality provided by the platform. Be able to set target investment sizes for loans PBL a, b and c, have some kind of queue (simple and transparent), and have funds ready to go and / or a commitment to fund post purchase (perhaps with a penalty if you don't meet the offer when it gets made..... Sounds simple but that way lies Assetz Capital complexity with nanopence sized loan part shrapnel. Don't go there!
|
|
|
|
Post by highlandtiger on Dec 8, 2015 19:16:34 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 the obvious answer is not to allow the re-sale market on the new loans to start immediately. The current situation allows people to over subscribe knowing full well they can sell immediately without adding any more funds to their account. If the re-sale market on new loans was held back for say 7 days, then people would only pre-fund what they were actually prepared to pay out for by putting money in their accounts. After 7 days the resale market on new loans could be opened, and people could buy and sell as they pleased.
|
|
dawn
Member of DD Central
Posts: 308 
Likes: 275
|
Post by dawn on Dec 8, 2015 19:18:29 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 am not sure this is fair on small investors. I have only a relatively small amount invested so 10% of that is tiny. If I can only pre-fund a tiny amount and then get only a small percentage of that for each new loan then it will take me a very long time to increase my holdings in SS (as trying to buy on the SM now is a joke for me due to very, very poor broadband links). So far I have transferred in all the money required for pre-funds when they've gone live - I have not had to sell any of my current holdings to pay for the pre-funds, although I plan to sell some bits of my older ones soon (which I bought on the SM several months ago before it became too difficult to use) just to diversify and reduce risk. If this proposed change had been in place before I would have far less invested in SS then I currently do. I think the main problem is the recent lack of loans - I think things will get better both for pre-funding and on the SM now there seems to be a healthy pipeline. I would like to leave things as they are for now and not do any knee-jerk changes just because things have been difficult over the last month.
|
|
am
Posts: 1,495
Likes: 601
|
Post by am on Dec 8, 2015 19:25:26 GMT
There are people like me who would buy small quantities of decent loans on the secondary market if they'd sit still long enough for me to read the documents. : Have you considered looking through the documents now and deciding which loans you'd like to have more of and which you want to avoid? Then, when a part appears on the SM you'd know whether or not you should try to buy it. Yes - but it's lower priority than reading documents on other platforms, where I have a decent chance of investing. (And I'm currently diverted by a bit of experimental mathematics.)
|
|
.
