huxs
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Post by huxs on Feb 25, 2016 11:42:58 GMT
It looks like FS are making large strides in winning new loans but are there sufficient Lenders to cover all of these? Currently there are four open loans three of which have been open since yesterday with a combined total of over 1mil still to fund. There is then another 1.4mil loan going live at 2pm and a pipeline longer than I have ever seen on FS with some very chunky loans.
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Given that all the current loans on FS would have gone in seconds on SS (with lenders moaning about not getting sufficient allocations) are FS losing in the competition for lenders ? and if so what do they need to do to win lenders back (for me reducing the time loans sit not earning would be a big step forward, i.e. instant returns)?
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Post by mrclondon on Feb 25, 2016 12:05:38 GMT
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Both valid points. A third is it is taking an awful long time for the SM pricing to reach "fair value" which is a discount of 0.5% to 1% to reflect the buyer pays tax on accrued "interest". (Noting the former isn't possible due to the 1% graduation). SM transaction volumes will be suppressed until such time as sellers offer "fair value" to potential buyers - there simply aren't enough company and non tax payer accounts on FS who can buy at par to provide the necessary liquidity. Many of the lenders who have been with FS since launch argued that a liquid SM is a vital prerequisite for the platform to fill large loans.
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SteveT
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Post by SteveT on Feb 25, 2016 12:14:39 GMT
It's the same problem ReBS has with large loans. Not enough base lender demand (without "Bonus Interest" bribes to drag in the big hitters) and no instant interest means no-one knows if / when a loan will fill so people hold back until it's close to the line.
By contrast, SS, MT and AR all offer instant interest and are comfortably filling large loans in good time (AR filled a £1.8m loan the other day!). I'd have thought instant interest is a cheaper option than bonus rates, but FS may worry that they'd end up needing both.
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xp67
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Post by xp67 on Feb 25, 2016 12:23:45 GMT
Three changes which FS can make to help:
1. Post the date at which interest will begin to accrue, at the time of posting the loan.
2. Post the date at which the loan will become live (or fail due to lack of funding), at the time of posting the loan.
3. Allow 0.1% graduations for the premium/discount on SM loans. There are many loans which I would be happy to sell at a discount, but not at a 1% discount as they are still 'too young' to have generated 1% worth of tax liability.
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SteveT
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Post by SteveT on Feb 25, 2016 12:26:34 GMT
Two changes which FS can make to help: 1. Post the date at which interest will begin to accrue, at the time of posting the loan. 2. Post the date at which the loan will become live (or fail due to lack of funding), at the time of posting the loan. 3. Allow 0.1% graduations for the premium/discount on SM loans. There are many loans which I would be happy to sell at a discount, but not at a 1% discount as they are still 'too young' to have generated 1% worth of tax liability. What's the other one? 
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Post by eascogo on Feb 25, 2016 12:39:09 GMT
Two changes which FS can make to help: 1. Post the date at which interest will begin to accrue, at the time of posting the loan. 2. Post the date at which the loan will become live (or fail due to lack of funding), at the time of posting the loan. 3. Allow 0.1% graduations for the premium/discount on SM loans. There are many loans which I would be happy to sell at a discount, but not at a 1% discount as they are still 'too young' to have generated 1% worth of tax liability. What's the other one? Upping the restriction may be an attempt by FS to get things moving? I queried the restriction. FS replies:
"No mistake - we have several investors who only like to make larger investments.
So occasionally we like to increase the limit accordingly - to be fair to all investors.
Kind Regards
Nigel Hackett
New loan to be posted on Friday 26th of February at 12 noon.
Secured by a first legal charge against two properties in Yorkshire valued at £330,000
Loan Amount: £135,000
Interest: 11% pa
LTV: 40.9%
There will be a restriction of £10,000 for the first 24 hours
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SteveT
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Post by SteveT on Feb 25, 2016 12:51:17 GMT
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Both valid points. A third is it is taking an awful long time for the SM pricing to reach "fair value" which is a discount of 0.5% to 1% to reflect the buyer pays tax on accrued "interest". (Noting the former isn't possible due to the 1% graduation). SM transaction volumes will be suppressed until such time as sellers offer "fair value" to potential buyers - there simply aren't enough company and non tax payer accounts on FS who can buy at par to provide the necessary liquidity. Many of the lenders who have been with FS since launch argued that a liquid SM is a vital prerequisite for the platform to fill large loans.
And yet someone bought a £50 Domain Name part from me this morning at 1% premium! Happy days
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mikes1531
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Post by mikes1531 on Feb 25, 2016 13:04:01 GMT
Upping the restriction may be an attempt by FS to get things moving? I queried the restriction. FS replies:
"No mistake - we have several investors who only like to make larger investments.
So occasionally we like to increase the limit accordingly - to be fair to all investors.
Kind Regards
Nigel Hackett
New loan to be posted on Friday 26th of February at 12 noon.
Secured by a first legal charge against two properties in Yorkshire valued at £330,000
Loan Amount: £135,000
Interest: 11% pa
LTV: 40.9%
There will be a restriction of £10,000 for the first 24 hours The lower rate will depress demand, especially as there are other 12% opportunities available at the same time, so a higher maximum investment does seem appropriate. I'm not going to be worried if I can't get into this loan. In fact, I probably won't even try to invest. Not to mention that anyone whose strategy includes selling loan parts on the SM probably will conclude that parts of this loan will be very unlikely to sell without a discount. As a result, over-investing temporarily with a view to selling the excess early, when they need their money for something else, doesn't seem likely -- to me, anyway -- to be a successful strategy. It's probably fine as a straightforward buy-and-hold investment.
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webwiz
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Post by webwiz on Feb 25, 2016 13:18:20 GMT
It looks like FS are making large strides in winning new loans but are there sufficient Lenders to cover all of these? Currently there are four open loans three of which have been open since yesterday with a combined total of over 1mil still to fund. There is then another 1.4mil loan going live at 2pm and a pipeline longer than I have ever seen on FS with some very chunky loans.
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Given that all the current loans on FS would have gone in seconds on SS (with lenders moaning about not getting sufficient allocations) are FS losing in the competition for lenders ? and if so what do they need to do to win lenders back (for me reducing the time loans sit not earning would be a big step forward, i.e. instant returns)? Yes. At least one is.
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Monetus
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Post by Monetus on Feb 25, 2016 13:21:39 GMT
It looks like FS are making large strides in winning new loans but are there sufficient Lenders to cover all of these? Currently there are four open loans three of which have been open since yesterday with a combined total of over 1mil still to fund. There is then another 1.4mil loan going live at 2pm and a pipeline longer than I have ever seen on FS with some very chunky loans.
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Given that all the current loans on FS would have gone in seconds on SS (with lenders moaning about not getting sufficient allocations) are FS losing in the competition for lenders ? and if so what do they need to do to win lenders back (for me reducing the time loans sit not earning would be a big step forward, i.e. instant returns)? Yes. At least one is. The big one for me that would make a difference is instant returns. I agree that currently many people hold off until the last possible second to avoid their cash sitting there while the loan fills. Unfortunately the time for loans to be activated on FS can also be many days/weeks (and sometimes they never gets activated at all) so it can be difficult to know where you stand. Whereas with SS/MT/AR I know that as soon as my funds are committed I will be earning something. If FS started instant returns that would definitely make a difference in my willingness to invest.
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locutus
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Post by locutus on Feb 25, 2016 13:25:16 GMT
I dabbled in FS and have now withdrawn. SM is crazy and needs redesigning from the ground up. Website is difficult and frustrating to use. No prefund. Bid limits too low on most loans. Less than stellar customer service. They should try and mimic SS as they are having no problems attracting lenders.
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xp67
Posts: 14
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Post by xp67 on Feb 25, 2016 13:33:54 GMT
Two changes which FS can make to help: 1. Post the date at which interest will begin to accrue, at the time of posting the loan. 2. Post the date at which the loan will become live (or fail due to lack of funding), at the time of posting the loan. 3. Allow 0.1% graduations for the premium/discount on SM loans. There are many loans which I would be happy to sell at a discount, but not at a 1% discount as they are still 'too young' to have generated 1% worth of tax liability. What's the other one? I split the first item into two after writing the post, and did not update the heading.
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webwiz
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Post by webwiz on Feb 25, 2016 14:08:06 GMT
I guess that the choice for FS is:
1) Instant interest
2) bonuses for large investments
3) underwriting at a premium
It looks as if the last of these is most effective, from their point of view. Even the threat underwriting pulls in the laggards. But only FS know the numbers, and they will have to gamble one way or another.
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mikes1531
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Post by mikes1531 on Feb 25, 2016 16:26:13 GMT
It looks like FS are making large strides in winning new loans but are there sufficient Lenders to cover all of these? Currently there are four open loans three of which have been open since yesterday with a combined total of over 1mil still to fund. There is then another 1.4mil loan going live at 2pm and a pipeline longer than I have ever seen on FS with some very chunky loans.
Are FS lenders holding off funding these loans until they are almost full (to reduce the time money sits idle and is this something FS needs to start addressing) ? Or is the lending pot running low?
Given that all the current loans on FS would have gone in seconds on SS (with lenders moaning about not getting sufficient allocations) are FS losing in the competition for lenders ? and if so what do they need to do to win lenders back (for me reducing the time loans sit not earning would be a big step forward, i.e. instant returns)? Yes. At least one is. Yes. At least two are. Actually, the reason is a bit more complex in the current situation because there are numerous opportunities and most investors have a limited amount of funds available. So they need to put their money toward the loans most likely to proceed quickly, or one where FS have declared an interest start date whether or not the loan has been activated by then. Then there's the potential cashback issue. If there's a chance of one, and it's likely to have a threshhold investment size, and the investors doesn't want to, or can't, put that much into each of the available loans, then they have to decide which loan to support to the level necessary to achieve cashback or bonus interest. That would cause investors to watch and wait and see what happens.
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mikes1531
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Post by mikes1531 on Feb 25, 2016 16:48:36 GMT
I guess that the choice for FS is: 1) Instant interest 2) bonuses for large investments 3) underwriting at a premium It looks as if the last of these is most effective, from their point of view. Even the threat underwriting pulls in the laggards. But only FS know the numbers, and they will have to gamble one way or another. Before the recent wind turbine loan currently awaiting activation, when was the last time FS offered an incentive for investing?
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