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Post by savingstream on Jun 10, 2014 10:46:14 GMT
We are soon to be launching Property Bridging Loan 006 on the platform. It is a loan for c.£2M, secured with a first charge against a Twickenham nursing home valued at £3.3M. The loan is for 12 months and we are deducting 12 months worth of interest from the advance. This creates a number of potential options for SS investors:
Option A) Invest in the loan and receive 12 months interest upfront upon drawdown of the loan. This would be yours to withdraw or reinvest (returning investors a higher yield). The restriction with this investment would be that you would not be allowed to sell the loan part during the 12 month term.
Option B) Invest and receive interest monthly, as standard, with the ability to sell your loan part if required (subject to demand).
Option C) Split the c.£2M loan into 2 x £1M loans on the platform, one offering investment option A) & one offering investment option B) to hopefully cater for both investor choices.
We would be grateful for investor feedback regarding the proposed scenario
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jun 10, 2014 10:54:50 GMT
An interesting proposition. My preference would be to receive the immediate interest - option A. I'm wondering how long it is likely to take until drawdown though.
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star dust
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Post by star dust on Jun 10, 2014 11:03:11 GMT
Actually, I would probably go for a bit of both if option C were offered. If it's not difficult to do, then this would keep the greatest number of investors/ potential investors happy. The only concern would be if the loan fills up too quickly and investors are unable to get any of it! However, I guess as it is so sizable it should be around for a bit before it fills. Would it be possible to offer both, and then if you find one is filling faster than the other switch some over?
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Post by savingstream on Jun 10, 2014 11:14:30 GMT
It has a strict drawdown date of 20th June. We are currently arranging underwriting but are planning on putting the loan live on the platform this afternoon.
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star dust
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Post by star dust on Jun 10, 2014 11:37:37 GMT
It has a strict drawdown date of 20th June. We are currently arranging underwriting but are planning on putting the loan live on the platform this afternoon. Does this mean that if it doesn't drawdown on the 20th June the loan offer will cease?
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j
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Penguins are very misunderstood!
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Post by j on Jun 10, 2014 11:47:41 GMT
We are soon to be launching Property Bridging Loan 006 on the platform. It is a loan for c.£2M, secured with a first charge against a Twickenham nursing home valued at £3.3M. The loan is for 12 months and we are deducting 12 months worth of interest from the advance. This creates a number of potential options for SS investors: Option A) Invest in the loan and receive 12 months interest upfront upon drawdown of the loan. This would be yours to withdraw or reinvest (returning investors a higher yield). The restriction with this investment would be that you would not be allowed to sell the loan part during the 12 month term. Option B) Invest and receive interest monthly, as standard, with the ability to sell your loan part if required (subject to demand). Option C) Split the c.£2M loan into 2 x £1M loans on the platform, one offering investment option A) & one offering investment option B) to hopefully cater for both investor choices. We would be grateful for investor feedback regarding the proposed scenario option C for me
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Post by savingstream on Jun 10, 2014 11:54:14 GMT
It has a strict drawdown date of 20th June. We are currently arranging underwriting but are planning on putting the loan live on the platform this afternoon. Does this mean that if it doesn't drawdown on the 20th June the loan offer will cease? That's not the case no, it's just the date that all parties involved are working towards as it is the date at which current financing (through Clydesdale) is ending.
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Post by webbski9 on Jun 10, 2014 11:58:08 GMT
Option c is attractive to all I would imagine
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Post by pepperpot on Jun 10, 2014 12:09:07 GMT
My gut instinct would be to retain the ability to sell up if needed, but without perusing the security I couldn't say for sure either way. It's big enough for Option C to supply both camps though. Any chance of a nice 0.5% cashback for pre-drawdown bids to help reduce underwriter involvement?  |
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j
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Penguins are very misunderstood!
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Post by j on Jun 10, 2014 12:25:49 GMT
Any chance of a nice 0.5% cashback for pre-drawdown bids to help reduce underwriter involvement? Would second that sentiment
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Post by savingstream on Jun 10, 2014 14:37:45 GMT
This loan is now live on the Saving Stream platform. We have decided to keep the loan as a single tranche (as it would have introduced confusion with varying loan sizes, security and LTV). When you purchase a loan part, you can now select if you wish to earn the interest monthly (and have access to secondary market) or if you want to receive 12 months interest upfront (but not have access to the secondary market). Thank you for your feedback on this point.
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unmadem
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Post by unmadem on Jun 10, 2014 15:36:03 GMT
Hi savingstream, note 2 on the loan says "Loans may be repaid at any point". How does this work with the 12 months interest upfront ?
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Post by savingstream on Jun 10, 2014 16:15:16 GMT
Hi savingstream, note 2 on the loan says "Loans may be repaid at any point". How does this work with the 12 months interest upfront ?
Hi unmadem, note 2 is hard coded to each loan detail page. The borrowers in this instance are tied into a 12 month minimum term loan, hence us deducting the 12 months interest upfront and being able to pay it to investors who choose that option.
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j
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Penguins are very misunderstood!
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Post by j on Jun 10, 2014 17:12:18 GMT
Would second that sentiment Thirded. Either option B or C - as previously mentioned, I would not want to be without the ability to liquidate the debt for 12 months, nor would having the full months interest paid upfront whilst receiving nothing else for 12 months be useful. I'm assuming that if option C were the chosen route to go down, the first charge security for both tranches would rank pari passu? Good to see SS offering 0.5% CB on top as well! Not too sure if this was planned or SS listened to our suggestions but, nice to see either way
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jun 10, 2014 17:16:47 GMT
We are soon to be launching Property Bridging Loan 006 on the platform. It is a loan for c.£2M, secured with a first charge against a Twickenham nursing home valued at £3.3M. The loan is for 12 months and we are deducting 12 months worth of interest from the advance. This creates a number of potential options for SS investors: Option A) Invest in the loan and receive 12 months interest upfront upon drawdown of the loan. This would be yours to withdraw or reinvest (returning investors a higher yield). The restriction with this investment would be that you would not be allowed to sell the loan part during the 12 month term. Option B) Invest and receive interest monthly, as standard, with the ability to sell your loan part if required (subject to demand). Option C) Split the c.£2M loan into 2 x £1M loans on the platform, one offering investment option A) & one offering investment option B) to hopefully cater for both investor choices. We would be grateful for investor feedback regarding the proposed scenario If my calculation is correct & one opts for full interest payment upfront (plus cashback) then invest that immediately @ 12% in another loan once received, then effective interest will be 14%. Would appreciate confirmation or otherwise on my calculation.
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