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Post by Collateral Rep on May 10, 2017 13:45:20 GMT
Afternoon,
We've had a lot of positive feedback regarding the Bolton loan, but it's been suggested that a cashback incentive might be a good idea to help the loan along. We have decided to apply the following incentives to the following loan.
BL00026 Development for Student Accommodation 4 - 14 Great Moor Street, Bolton
For Investments of £0.00 - £4,999.99 – 0.25% Cashback For Investments of £5,000.00 - £9,999.99 – 0.5% Cashback For Investments of £10,000.00 - £24,999.99 – 1.0% Cashback For Investments of £25,000.00 - £49,999.99 – 2.0% Cashback For Investments of £50,000.00 - £99,999.99 – 3.0% Cashback For Investments of £100,000.00 + – 4.0% Cashback
Any funds already received are eligible for the cashback and it doesn’t need to be paid in a single payment. Investors can top up their original investment before drawdown to be eligible for the relevant cash back.
The cash back is payable at drawdown once the loan is fully funded.
Many thanks,
Gordon
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greatmarko
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Post by greatmarko on May 10, 2017 14:09:30 GMT
Would a better approach perhaps have been to increase the % PA to say 13% for all investors?
Not sure how many investors on Collateral's platform are willing to put £100k into a property loan!
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SteveT
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Post by SteveT on May 10, 2017 14:12:24 GMT
Would a better approach perhaps have been to increase the % PA to say 13% for all investors? Not sure how many investors on Collateral's platform are willing to put £100k into a property loan! I doubt it. That sort of cashback structure has long worked well on FS.
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greatmarko
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Post by greatmarko on May 10, 2017 14:14:03 GMT
Would a better approach perhaps have been to increase the % PA to say 13% for all investors? Not sure how many investors on Collateral's platform are willing to put £100k into a property loan! I doubt it. That sort of cashback structure has long worked well on FS. FS have a longer track record of property loans (with generally higher % PA) than Collateral though!
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ben
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Post by ben on May 10, 2017 14:29:29 GMT
I doubt it. That sort of cashback structure has long worked well on FS. FS have a longer track record of property loans (with generally higher % PA) than Collateral though! What percentege of them have actually repaid, rather then just renewed? FS track record on property is pretty poor. They aslo have many properties that have renewed with the loan being bigger, ie including interest and FS fees so the borrower has still never paid a penny back.
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star dust
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Post by star dust on May 10, 2017 14:32:17 GMT
Well as a small scale investor I have to say they have just alienated me. I can understand that Collateral want to attract some investors with deeper pockets so by all means tier the cash-back system and give them more, but to exclude investors at the other end of the spectrum seems very unfortunate.
Why not treat all investors in this loan with some appreciation and provide at least some cash-back for everyone. I’ve been fortunate enough as an early adopter to enjoy cash-back on both MT and Lendy (nee SS) when they were growing their platforms, and my normal per loan limit was no different then to now. They both used a ‘some cash-back for all loan participants’ model, and had that been used here I would have been prepared to perhaps double my stake, but wouldn’t put a penny more in now.
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ric
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Post by ric on May 10, 2017 14:54:51 GMT
this seems an ugly mix between bonus and cashback of FS; very few investors will benefit and SM will be completely illiquid for BH selling just after fully funded date
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Post by Collateral Rep on May 10, 2017 15:40:09 GMT
Evening,
In response to some feedback received, we have added another cashback rate for investments under £5,000.00, meaning all investors in this loan will receive a cashback incentive.
For Investments of £0.00 - £4,999.99 – 0.25% Cashback
Many thanks,
Gordon
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treeman
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Post by treeman on May 10, 2017 15:53:26 GMT
Evening, In response to some feedback received, we have added another cashback rate for investments under £5,000.00, meaning all investors in this loan will receive a cashback incentive. For Investments of £0.00 - £4,999.99 – 0.25% Cashback Many thanks, Gordon Nice one Gordon ! £5k would be a little steep for me just now. Very wise not to forget those who helped you get where you are
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ben
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Post by ben on May 10, 2017 16:41:38 GMT
Will be interesting to see what - if any - incentives are offered on the subsequent tranches. (Approx £4.5M over 9 months is £500k per month if the requirement is linear). £500k loans are hard enough for COL to shift. Nine £500k additional tranches in a loan that lots of existing lenders will have already had their fill, may prove problematic without some kind of incentive. If these additional tranches are incentivised, what chances of selling this loan on the SM? Novel idea how about just buying what you want? rather then worrying about selling it on the SM.
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peteuk
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Post by peteuk on May 10, 2017 19:14:39 GMT
Somebody mentioned previously FS is generally a higher % 13 on average big difference collateral take the interest payments out of the loan and pay it out monthly as they say it wont change the ltv over time, where asFS loan your money to any tom dick or harry who promises to pay it back with interest sometime in the future, maybe if they feel like it. Carry on collateral you are doing a good job. I am moving more out of FS over to you
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SteveT
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Post by SteveT on May 11, 2017 8:12:05 GMT
On reflection, despite the attraction of 0.5% or even 1% Cashback, I've decided not to increase the original sum I staked in this loan. If BH's can bank their 3%/4% Cashback and immediately start feeding parts back onto the SM without penalty then it's permanently going to be awash with availability. And that's before consideration of future tranches! FS prevent this by only crediting their "bonus interest" on holdings that are kept to term, so BH's give up their bonus if/when they offload parts. I strongly suspect that anything staked into this loan effectively will become locked-in for the full term.
Further thought: One way to address this could be to give priority in the SM selling queue to parts that were awarded lower Cashback rates, so 0.25%CB parts would rank ahead of 0.5%CB parts and so on. This would be a variation on Lendy's approach whereby "underwriter parts" are ranked behind "retail lender parts" in the SM queues.
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stevio
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Post by stevio on May 11, 2017 9:27:59 GMT
On reflection, despite the attraction of 0.5% or even 1% Cashback, I've decided not to increase the original sum I staked in this loan. If BH's can bank their 3%/4% Cashback and immediately start feeding parts back onto the SM without penalty then it's permanently going to be awash with availability. And that's before consideration of future tranches! FS prevent this by only crediting their "bonus interest" on holdings that are kept to term, so BH's give up their bonus if/when they offload parts. I strongly suspect that anything staked into this loan effectively will become locked-in for the full term. Further thought: One way to address this could be to give priority in the SM selling queue to parts that were awarded lower Cashback rates, so 0.25%CB parts would rank ahead of 0.5%CB parts and so on. This would be a variation on Lendy's approach whereby "underwriter parts" are ranked behind "retail lender parts" in the SM queues. Why should smaller investors get a benefit over larger investors? Surely CO should be equally fair to all types of investors? CO have been fair and offered an incentive to all investors. They have tiered this to attract larger investors, again fair as they are a business and their business is to fill loans. I can't imagine they would want to upset the larger investors they have just attracted!
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SteveT
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Post by SteveT on May 11, 2017 9:42:42 GMT
Why should smaller investors get a benefit over larger investors? Surely CO should be equally fair to all types of investors? By that token then, why isn't the cashback offer "equally fair to all types of investor"? Many platforms use underwriters to fill large loans, for which they typically earn higher returns but face lower liquidity if/when they want to sell later. My suggestion would be no different. A structure where someone with deep pockets can bank £4000 cashback by parking £100k in the loan, then immediately list much of it for sale without penalty and block the SM for every other small Collateral lender, has some pretty obvious flaws...
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greatmarko
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Post by greatmarko on May 11, 2017 9:44:19 GMT
...If BH's can bank their 3%/4% Cashback and immediately start feeding parts back onto the SM without penalty then it's permanently going to be awash with availability. And that's before consideration of future tranches! FS prevent this by only crediting their "bonus interest" on holdings that are kept to term, so BH's give up their bonus if/when they offload parts.... Why should smaller investors get a benefit over larger investors? Surely CO should be equally fair to all types of investors? Exactly! Which is why CO should have just offered an increased %PA rate on this loan for all investors, rather than offering different levels of cashback, payable when the loan draws down. Making this say a 13% PA loan would be fair to ALL investors and wouldn't mean it all gets dumped on the SM as soon as it draws down!
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