macq
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Post by macq on Apr 30, 2017 12:31:24 GMT
or your doing DIY this bank holiday weekend & this seems more fun  |
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IFISAcava
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Post by IFISAcava on Apr 30, 2017 14:05:22 GMT
Thanks for raising this point. Just to clarify my understanding... Platform A: Interest = 6%. Fees not explicitly charged to lender. Platform B: Interest = 7%. Additional platform fees said to be 1%. Platform A is better from a purely tax perspective? To confirm whether A was better from a tax perspective, you would need to know the tax treatment of the fees on the specific platform. For example Funding Circle changed all their contracts a couple of years ago to move the fee from the lender to the borrower, meaning that the fee would then be deducted before tax was paid. But Bondmason is an example of a platform where the fees are charged to the lender, and the advice Bondmason received from HMRC is that the fees are paid after tax is deducted. So for an individual paying higher rate tax, the returns after tax in your example would be: Platform A: Interest = 6%. Fees not explicitly charged to lender. Return after 40% tax = 6%*60% = 3.6% Platform B: Interest = 7%. Additional platform fees charged to lender of 1%. Return after 40% tax = (7%*60%) - 1% = 3.2% This problem does not apply if you are investing through an ISA, or through a company, or if you have enough tax exemptions to cover the interest. Didn't realise that. With BM fees increasing to 1.5% for most small to medium sized investors, that is making it much less attractive (for higher rate tax payers) compared e.g. to Growth Street. Thus: GS for a 45% tax payer will return 3.58% (if 6.5% achieved after losses) BM would return 2.9%. Thus you'd end up with 23.3% more interest cash each year from GS than BM assuming both hit the targetted 6.5%. And GS has a PF. And GS takes much less time to get fully invested.
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Greenwood2
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Post by Greenwood2 on Apr 30, 2017 14:46:30 GMT
Except GS rates have just gone down and it may soon become a free market where it will not be hands off.
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Post by khampson on Apr 30, 2017 16:05:35 GMT
Except GS rates have just gone down and it may soon become a free market where it will not be hands off. I did put this question to them regarding free market and they said it would be at least back end of this year, for now GS has a good platform, hopefully when it does change I hope it doesn't turn into ratesetter 2 and rates don't drive down to unreasonable rates has that has happened on ratesetter, who knows we may see better rates but then GS will no longer be a hands off platform and even with a auto bid option it will need close monitoring.
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nick
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Post by nick on Apr 30, 2017 18:24:39 GMT
Marketinvoice which is a invoice invoice discounting platform. No secondary market, but short term 30-90 days lending. Easy to deploy significant amounts rapidly, set and forget.
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rozentas
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Post by rozentas on Apr 30, 2017 18:43:03 GMT
Bridgecrowd can be hands off if you use their auto invest function, but you have to be prepared to have £15000 available to invest, that's three times the usual minimum loan size. You get a 12% return.
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ozaz
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Post by ozaz on Apr 30, 2017 18:44:36 GMT
Marketinvoice which is a invoice invoice discounting platform. No secondary market, but short term 30-90 days lending. Easy to deploy significant amounts rapidly, set and forget. Thanks. I was actually aware of MarketInvoice and am keen to get some exposure to Invoice Financing. Unfortunately its a quite a bit out of my league - £50k minimum investment! I will definitely be trying Investly though, which was mentioned earlier in the thread.
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macq
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Post by macq on Apr 30, 2017 19:07:22 GMT
seems like most of their loans are in Estonia not sure how that may work with your wish for easy exit plans in the future
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ozaz
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Post by ozaz on Apr 30, 2017 19:20:46 GMT
seems like most of their loans are in Estonia not sure how that may work with your wish for easy exit plans in the future They've had about 30 UK invoices in the past 30 days. This is significantly less than the number of Estonian ones (~ 80), but doesn't seem too bad.
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stub8535
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Post by stub8535 on Apr 30, 2017 19:33:48 GMT
Access to invoice financing is an "advantage" of bondmason.
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Greenwood2
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Post by Greenwood2 on Apr 30, 2017 19:59:40 GMT
But there have been defaults on the Invoice Discounting loans which impact lenders due to low possible diversification.
There seem to be downsides on most sites, not surprisingly.
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stub8535
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Post by stub8535 on May 1, 2017 0:53:46 GMT
Hence the double speech marks Greenwood2. Bm have now reduced exposure and, it seems, the number of if loans funded. Like the original poster, and I suspect the majority of retail investors, the £50k minimum excludes them fron the asset class. |
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Post by khampson on May 1, 2017 7:10:03 GMT
Hence the double speech marks Greenwood2. Bm have now reduced exposure and, it seems, the number of if loans funded. Like the original poster, and I suspect the majority of retail investors, the £50k minimum excludes them fron the asset class. The only defaults I had in BondMason was invoice discounting.
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greatmarko
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Post by greatmarko on May 1, 2017 11:47:59 GMT
With Assetz Capital and their "accounts" you need to beware... There is no way to ensure diversification across loans to minimise risks... There is, but you need to "drip feed"... i.e. say you have £1,000 that you want to put into the GEIA; initially just transfer a couple of hundred into the GEIA. Wait a few hours/days for that to be absorbed, then transfer a couple hundred more to GEIA, and repeat until the entire £1,000 amount has been invested in the GEIA. You'll get smaller loan parts (and therefore better diversification/lower risk) than if you put a £1,000 lump sum in in one go. I learnt the hard way, as I recently put a large chunk into the GEIA in one go - almost immediately nearly 70% of which ended up buying a single loan part... so now I "drip feed" the account instead
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mary
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Post by mary on May 1, 2017 12:56:40 GMT
With Assetz Capital and their "accounts" you need to beware... There is no way to ensure diversification across loans to minimise risks... There is, but you need to "drip feed"... i.e. say you have £1,000 that you want to put into the GEIA; initially just transfer a couple of hundred into the GEIA. Wait a few hours/days for that to be absorbed, then transfer a couple hundred more to GEIA, and repeat until the entire £1,000 amount has been invested in the GEIA. You'll get smaller loan parts (and therefore better diversification/lower risk) than if you put a £1,000 lump sum in in one go. I learnt the hard way, as I recently put a large chunk into the GEIA in one go - almost immediately nearly 70% of which ended up buying a single loan part... so now I "drip feed" the account instead Sadly this did not work for me, in the GBBA, I made 6-8 deposits over 3 months. This led to ~3000 transactions (investments, interest and interest investments) over the period, many of less than 1p. Trying to decipher this was not easy, but when I did it seems that each investment and re-investment picked up parts of the same particularly worrying second charge loan that I would normally avoid like the plague, probably because other investors were heading for the exits, until it represented ~20% of my total. Thats when I discovered that it was not possible to place controls on these "accounts" and therefore I decided that the simplicity was not worth the higher risk of accumulating too much of problematic loans and I'm now out of Assetz.
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