am
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Post by am on May 18, 2017 14:52:03 GMT
Note the LTV is higher on MT, which goes some way to explaining the rate increase...the additional borrowing probably covering Lendy interest. The additional borrowing is too large to be just covering Lendy interest - that would translate to a 70% APR. Some of the additional borrowing is stated by MT to be to cover demolition costs, so that the borrower can make a start of the project while still negotiating the development finance. My guesstimate is that 1/3rd of the additional borrowing it to cover Lendy interest, giving at 20% APR. On the other hand a quarter of a million demolition costs sounds a bit on the high side.
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am
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Post by am on May 18, 2017 14:55:20 GMT
Note the LTV is higher on MT, which goes some way to explaining the rate increase...the additional borrowing probably covering Lendy interest. There shouldn't be much interest to pay now inasmuch as the remaining term is only -17 days. But there will be a Lendy exit fee to pay -- 2% of the loan? They have to repay to Lendy not only the amount that they got, but also the amount taken out of the loan at the start as retained interest and arrangement fees. In effect the borrower is paying the whole interest as a bullet at the end of the loan.
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mikes1531
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Post by mikes1531 on May 18, 2017 23:45:50 GMT
There shouldn't be much interest to pay now inasmuch as the remaining term is only -17 days. But there will be a Lendy exit fee to pay -- 2% of the loan? They have to repay to Lendy not only the amount that they got, but also the amount taken out of the loan at the start as retained interest and arrangement fees. In effect the borrower is paying the whole interest as a bullet at the end of the loan. Yes, but... The face amount of the loan is what they'd have to pay Lendy to redeem the loan because it already includes the prepaid interest. All they should need to add if they redeem at 0 days remaining is the 2% (?) exit fee. If they repay after the 0 day point they also have to pay some interest, but 17 days' worth wouldn't be that much even if Lendy charge them a 'default' rate for failing to repay within the specified term. EDIT: What's being discussed here is the difference between the size of the new MT loan and the old Lendy loan being redeemed. But if MT also charge interest up front then the amount borrowed there has to be large enough that the amount net of prepaid interest that the borrower receives is sufficient to clear the Lendy debt. Could that explain some of the increase?
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Post by lendinglawyer on May 19, 2017 6:43:31 GMT
mikes1531 yes that's probably why the increase. And also because it's a continuing development with continuing cash needs. Do we know for sure Lendy charges an exit fee? I can understand arrangement and commitment fees but exit fees are egregious. In the funds world fees charged by GPs are subject to extreme regulatory scrutiny. I kind of feel there should be complete transparency on platform's fees, marginal rates etc. If they disclose they might compete whereas at present I suspect there's a de facto cartel in place where they charge basically the same. It's a young industry though so I'm sure that time will come.
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am
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Post by am on May 19, 2017 10:40:44 GMT
They have to repay to Lendy not only the amount that they got, but also the amount taken out of the loan at the start as retained interest and arrangement fees. In effect the borrower is paying the whole interest as a bullet at the end of the loan. Yes, but... The face amount of the loan is what they'd have to pay Lendy to redeem the loan because it already includes the prepaid interest. All they should need to add if they redeem at 0 days remaining is the 2% (?) exit fee. If they repay after the 0 day point they also have to pay some interest, but 17 days' worth wouldn't be that much even if Lendy charge them a 'default' rate for failing to repay within the specified term. EDIT: What's being discussed here is the difference between the size of the new MT loan and the old Lendy loan being redeemed. But if MT also charge interest up front then the amount borrowed there has to be large enough that the amount net of prepaid interest that the borrower receives is sufficient to clear the Lendy debt. Could that explain some of the increase? My thoughts have clarified a little overnight. The money required is £1,250,000 - to repay the original loan from Lendy £ 11,600 - estimated arrears of interest at Lendy £ 50,200 - our interest on the MT loan, including interest on the advance to pay the interest. £ 50,000 - estimated MT fees, etc. £  - any exit fees from Lendy £ - working capital for the SPV (replacing money spent on planning in the last 6 months, and other expenses) £ - funding for demolition Total £1,625,000, unless any of the loan is earmarked for some other unidentified purpose.
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gt94sss2
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Post by gt94sss2 on May 19, 2017 10:58:57 GMT
EDIT: What's being discussed here is the difference between the size of the new MT loan and the old Lendy loan being redeemed. But if MT also charge interest up front then the amount borrowed there has to be large enough that the amount net of prepaid interest that the borrower receives is sufficient to clear the Lendy debt. MT don't generally retain interest upfront.
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twoheads
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Programming
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Post by twoheads on May 19, 2017 15:27:09 GMT
Just repaid (16:25).
EDIT: £1.25m for investors to spend wisely!
EDIT2: Also PBL082 has now been repaid, adding another £845k.
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mikes1531
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Post by mikes1531 on May 19, 2017 21:24:01 GMT
Do we know for sure Lendy charges an exit fee? The short answer is no. But at some point in the past -- possibly as much as a year ago now -- they did post an example of their fee structure here in the forum, and it did include an exit fee which, IIRC, was 2%. (Someone who's better than I at searching the archives probably could find that message and post a link here.) Of course, that was then, and this is now, so there's no way to know whether they've changed their fee policy since that message was posted.
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Post by dan1 on May 19, 2017 21:29:55 GMT
Do we know for sure Lendy charges an exit fee? The short answer is no. But at some point in the past -- possibly as much as a year ago now -- they did post an example of their fee structure here in the forum, and it did include an exit fee which, IIRC, was 2%. (Someone who's better than I at searching the archives probably could find that message and post a link here.) Of course, that was then, and this is now, so there's no way to know whether they've changed their fee policy since that message was posted. Perhaps you were referring to the post by mv? p2pindependentforum.com/thread/2639/convinced?page=1&scrollTo=47776
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mikes1531
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Post by mikes1531 on May 19, 2017 22:08:41 GMT
dan1: That's the one! Thanks for providing the link. And it was longer ago than I had thought -- just about two years to the day.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 19, 2017 23:32:13 GMT
dan1 : That's the one! Thanks for providing the link. And it was longer ago than I had thought -- just about two years to the day. For future reference the link has always been at the top of the updates list, along with some other significant Lendy posts.
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