PBL104 - 3 Bedroom Flat, London - REPAID (Before Drawdown)

I'm not surprised.  The 120-day term always has struck me as rather ambitious, and if the borrower couldn't achieve that -- and isn't in a position to stump up some more interest at then end of the short term -- then the loan would go into negative days.  And if, as SS have suggested, all of the other negative term loans are having their interest paid by the borrower then this loan quickly would end up with a red notice. 

I expect that SS really would like to avoid that, so I'm somewhat surprised that they wanted to make this loan in the first place.  Now that the borrower has shown that they can't easily raise the necessary deposit, I suspect SS would like to cut their losses and pull out of the deal.  The borrower may have been given notice that they have only a few more days to proceed or Lendy will withdraw the loan offer, and now SS are waiting for the notice period to expire.

No doubt SS do charge some sort of origination fee, and it might be enough to cover pre-drawdown interest.  But if SS could reduce the amount of pre-drawdown interest then that fee could go straight to the SS/Lendy bottom line, so they have quite an incentive to keep that interest to a minimum.

EDIT:  And if a loan doesn't proceed at all, as this one might not, do SS still receive that fee?

SS have replied today-

Thanks for getting in touch. We plan to cancel this loan by the end of the week. Investors will be repaid imminently and have their owed interest paid to them for the time their money was held.

SS pay it, they have to raise funds before they can offer it to the lender, if the lender does not draw down, in this case because he cant raise the deposit, then it comes back to us with interest.

May be too simplistic, but .... if the borrower is struggling to raise the deposit, surely it doesn't bode well for him being able to raise the funds for the refurb....?

It makes you wonder why they are hanging on to the funds and continuing to pay interest to us mere mortals when it isn't supposedly earning them anything, and i'm guessing isn't asset backed as the loan hasn't proceeded.

I would guess any fees charged by SS upfront would be covering the interest at this point still.