pikestaff
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Post by pikestaff on Apr 18, 2014 20:44:12 GMT
The implication of mikes1531's calculation is that AC are paying for the pleasure of dealing with the HNWI. But it could be an error of school-boy maths at AC. The kind that I make regularly. Nothing so complicated I think. As noted in my previous post the first draft of the credit report looks to have been prepared by Ludgate for TC and refers to an acceptable interest rate of 8-10%. They have put 8% in the f/c, which is the bottom end of this range. C**k up, not conspiracy.
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bugs4me
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Post by bugs4me on Apr 18, 2014 21:17:34 GMT
Well I'm not chomping at the bit over this. The credit report states that AC are waiting for '....Asset and Liability profile to be provided to demonstrate net worth of the high net worth director....' . Not yet provided but will be interesting to see whether the profile is made available.
But and it is a big but, having been burnt once with a PG elsewhere which proved to be as useful as a chocolate teapot then without firm assets I won't be going for it. Maybe I'm just getting cynical but 9% simply doesn't cut it with me.
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pikestaff
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Post by pikestaff on Apr 18, 2014 21:22:55 GMT
I do hope that AC have not forgotten that one of the major pillars in the success of any enterprise is TRUST. Dabbling with potentially high risk deals has every likelihood of damaging reputation and any new or existing lenders will avoid that enterprise. I don't agree. Provided there is full disclosure, we can all make up our own minds. I like AC as a platform, but its loans lack variety. I don't want too many of my eggs in the property basket, and I would like AC to diversify into a wider range of deals, including TC type loans. Just not this one, unfortunately.
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Post by rudry2677 on Apr 18, 2014 21:30:34 GMT
I do hope that AC have not forgotten that one of the major pillars in the success of any enterprise is TRUST. Dabbling with potentially high risk deals has every likelihood of damaging reputation and any new or existing lenders will avoid that enterprise. I don't agree. Provided there is full disclosure, we can all make up our own minds. I like AC as a platform, but its loans lack variety. I don't want too many of my eggs in the property basket, and I would like AC to diversify into a wider range of deals, including TC type loans. Just not this one, unfortunately. You are right inasmuch as we can each make up our own minds regarding risk but as an enterprise I would not wish AC to be akin to a bookies.
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Post by rudry2677 on Apr 18, 2014 21:32:04 GMT
I don't agree. Provided there is full disclosure, we can all make up our own minds. I like AC as a platform, but its loans lack variety. I don't want too many of my eggs in the property basket, and I would like AC to diversify into a wider range of deals, including TC type loans. Just not this one, unfortunately. You are right inasmuch as we can each make up our own minds regarding risk but as an enterprise I would not wish AC to be akin to a bookies. I should have added that I agree with your wish for diversity in dealings.
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mikes1531
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Post by mikes1531 on Apr 18, 2014 21:33:41 GMT
I haven't invested either. It feels like they are testing the water with this loan, and were also probably reluctant to have nothing available over the Bank Holiday weekend. A recent email referred to some forthcoming Cornwall loan but it has presumably either fallen over or been postponed. They probably would have preferred to have a more 'standard' AC loan available over the weekend, and it looks as if they are probably going to get a clear message from lenders on this one. We certainly seem to getting a clear message so far. I realise that it's a long BH weekend, but this auction has been open for over 24 hours now, and has received the princely sum of just over £8k of bids. Not exactly an enthusiastic start, and no doubt because of all the reasons stated in this thread. And I don't expect that AC will find it easy to persuade underwriters to participate with these terms. I'm watching this one from the sidelines.
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Post by thereverendofsurrey on Apr 19, 2014 13:26:53 GMT
I think there is a lot of collective wisdom on this. I am new to AC but am in for 35k. However what sets AC apart has always been fixed, tangible assets for security. This is a hope n pray investment, that requires 19% not 9%. Hopefully it won't fill and AC will learn a lesson here.
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bugs4me
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Post by bugs4me on Apr 19, 2014 15:24:11 GMT
I think there is a lot of collective wisdom on this. I am new to AC but am in for 35k. However what sets AC apart has always been fixed, tangible assets for security. This is a hope n pray investment, that requires 19% not 9%. Hopefully it won't fill and AC will learn a lesson here. AC do seem to be relying upon the simple fact that there is a HNWI behind this. The conclusion has to be why the HNWI has not used their own funds rather than using the AC market. That's of course assuming that those funds are available. Look forward to reading the report if AC decide to publish it regarding the substance behind the individual. Irrespective, I cannot see this one flying without asset security. We will just have to wait and see.
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andy2001
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Post by andy2001 on Apr 19, 2014 15:32:15 GMT
Does AC need to persuade the underwriters? I never got to the stage of getting full details of how underwriting works at AC but it seemed that in return for earning a decent rate on unused money and a yield pick-up on underwritten deals, that AC could deploy the underwriters money as they saw fit. This deal would be a prime example of why I'd never risk being an underwriter. The idea that the bulk of my underwriting funds might be placed into a single deal with no security simply isn't worth the extra 1% or so. Recent TC examples (some from the same sponsor) have shown that PGs are completely useless and lead to a recovery value close to zero. If I was being cynical I could make a case to say this is the ideal time for the sponsor to try to get a poorly securitized deal off at a low yield. Cashback bonus in force and nothing else on the primary market. Of course I'm not that cynical ... and I don't think lenders are that gullible. I'm not an underwriter but I'm sure that's not how it works. For example Auction 79 was first run last year, but got pulled when it failed to fill, and no underwriter could be found. It then made a come back after a discount on the debt with the bank was agreed.
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Post by yorkshireman on Apr 19, 2014 17:56:28 GMT
I think there is a lot of collective wisdom on this. I am new to AC but am in for 35k. However what sets AC apart has always been fixed, tangible assets for security. This is a hope n pray investment, that requires 19% not 9%. Hopefully it won't fill and AC will learn a lesson here. The lesson AC should learn from this is not to take lenders for granted as they appear to be doing with this loan and the p*ss taking drawdown times we are currently suffering.
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mikes1531
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Post by mikes1531 on Apr 20, 2014 0:25:42 GMT
Does AC need to persuade the underwriters? I never got to the stage of getting full details of how underwriting works at AC but it seemed that in return for earning a decent rate on unused money and a yield pick-up on underwritten deals, that AC could deploy the underwriters money as they saw fit. This deal would be a prime example of why I'd never risk being an underwriter. The idea that the bulk of my underwriting funds might be placed into a single deal with no security simply isn't worth the extra 1% or so. I've never asked for details of what being an underwriter would mean, but I've always assumed that the U/Ws did their own duedil before deciding whether or not to get involved in a specific loan. I'd be surprised if the U/Ws turn over all control of their money to AC and let AC decide which auctions they participate in. That's not to say that doesn't happen, but I certainly wouldn't want my money being invested that way. Unless, of course, AC were to guarantee the U/W's returns. But considering the size of the U/W's investments, I wouldn't have thought that AC would be in a position to make such guarantees.
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j
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Post by j on Apr 20, 2014 0:52:45 GMT
2.5 days into the loan & less than 2% filled with no other loans on platform to compete with it tells its own story about the quality of this loan
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Post by Ton ⓉⓞⓃ on Apr 20, 2014 9:35:17 GMT
2.5 days into the loan & less than 2% filled with no other loans on platform to compete with it tells its own story about the quality of this loan Infact it's encouraging money onto the AM. AM total units
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Post by thereverendofsurrey on Apr 21, 2014 16:13:48 GMT
I have just posted a question on the AC site to try and tempt AC to realise they are flogging a dead horse. IMHO I too would appreciate a diversity of loan types, but when they become unsecured, I might as well head down to Ladbrokes given the relatively sparce information provided.
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dorset
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Post by dorset on Apr 21, 2014 16:52:18 GMT
I am achieving diversification through spreading funds across several platforms and I am not looking for AC to provide it for me.
I think that the USP of AC is the secured loan. London Retail is the type of investment I would generally take through Funding Circle. However due to the lack of tangible assets in the business I will be sitting this one out.
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