twoheads
Member of DD Central
Programming
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Post by twoheads on Aug 24, 2017 15:16:04 GMT
However the loan in question is a PBL so unless it changes into a DFL, that won't be a problem in this particular case. I think we can pre-fund this one with a Peaceful Easy Feeling - but because of the 6 month interest thing I will be bailing out early and won't Take It To The Limit. The 'loan particulars' indicate that Lendy may finance the future development:
Exit strategy
The borrower plans to obtain planning consent to develop the site, and once obtained the borrower will seek to exit through development finance, which we may consider providing.
So, a transmutation from PBL (Probably Be Late) to DFL (Definitely F Late) is quite likely. Whether investors loan parts will roll over, or whether the PBL is repaid and a whole new DFL created from scratch... who can tell... both have happened in Lendy's history.
Our investigative work has certainly not been Wasted Time, nor is this loan The Last Resort of a Desperado (rubbish I know... sorry).
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min
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Post by min on Aug 24, 2017 15:28:58 GMT
The idea of exiting after a few months is all very well, however I was reminded of Lendy new policy that unfilled new tranches take priority in the SM. Some Lendy properties could become Hotel California - "You can stop receiving interest any time you like, but you can never leave." Yes a good point and one that has reduced my interest in DFLs even further and led to me almost wearing out the Sell button. However the loan in question is a PBL so unless it changes into a DFL, that won't be a problem in this particular case. I think we can pre-fund this one with a Peaceful Easy Feeling - but because of the 6 month interest thing I will be bailing out early and won't Take It To The Limit. One to pass on to the 'New Kids in Town'.
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fp
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Post by fp on Aug 24, 2017 18:36:06 GMT
Just thinking out loud....
Observation:
Only 6 months interest retained on a 12 month loan, Interest then accrues until the borrower coffs up..... if he coffs up.
Conclusion:
That would make this a bullet repayment loan.
Observation:
A few of these successfully launched and then we will see loans with no interest retained, and a full bullet loan repayment arrangement.
Conclusion:
You will nee to hold loans from draw down to settlement/recovery due to new set up, only receive a penny in interest if the loan repays in full or is successfully recovered in full.
Observation:
The majority of loans on the platform which are currently accruing interest are unlikely to recoup sufficient capital to repay capital alone, let alone accrued interest and bonus interest.
Conclusion:
I'll probably earn more using auto-bodge on FC
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spyrogyra
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Post by spyrogyra on Aug 24, 2017 21:15:11 GMT
Lendy needs to demonstrate, at least from time to time, that they care (a bit) for the lenders. Hence I have a suggestion - the well known borrower paying the interest for month 7 at the end of month 1, the interest for month 8 - at the end of month 2 and so on. If the loan particulars are agreed already, L can apply this scenario for future loan.
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Post by lendinglawyer on Aug 25, 2017 6:55:30 GMT
Lendy needs to demonstrate, at least from time to time, that they care (a bit) for the lenders. Hence I have a suggestion - the well known borrower paying the interest for month 7 at the end of month 1, the interest for month 8 - at the end of month 2 and so on. If the loan particulars are agreed already, L can apply this scenario for future loan. All very nice in theory but most likely the borrower was in a commercially strong enough position to negotiate away the full holdback so why would they agree this? I'm ok with it but (a) the deviation from the norm should have been clearly called out at the top of the particulars not buried half way down and (b) I am slightly surprised the borrower was able to show lendy a business plan that showed sufficient cash generation in months 7 to 12 to service the interest (I would assume they'd be in a cash burning development phase by then! Maybe they'll use future tranches of the DFL this will no doubt transform into to service the interest in which case it's basically the same).
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spyrogyra
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Post by spyrogyra on Aug 25, 2017 8:31:59 GMT
I don't see how they have a strong position. The well-known name wouldn't count much if planning permission is not granted (though we know they would still have options). What if they decide to dump this project? If they are in a strong position they would not turn to Lendy. I see the position of lenders stronger than the position of the one reaching out with a bowl in hand.
Lenders hold the money, they take the risk, they should be protected by Lendy as that's their obligation to do so.
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dp
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Post by dp on Aug 25, 2017 8:58:43 GMT
Why not just launch the loan with 6 month term - 180 days and after 6 month, every time they cough up a months interest it gets a 30 day extension?
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username
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Post by username on Aug 25, 2017 9:07:07 GMT
If you were cynical you might think this looks like a 6 month loan but without the need to pay the bonus if it goes over.
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Post by GSV3MIaC on Aug 25, 2017 9:07:10 GMT
Why not just launch the loan with 6 month term - 180 days and after 6 month, every time they cough up a months interest it gets a 30 day extension? Presumably because the borrower doesn't believe they have a hope in hell of repaying the capital after 6 months? But I agree, this is currently looking like a 6 month loan with 'guaranteed overrun potential' (not that more bridging loans don't have quite a bit of that anyway).
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spyrogyra
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Post by spyrogyra on Aug 25, 2017 9:24:00 GMT
Nobody believes this is 6 months loan in reality. The recent numerous changes were to the detriment of the lenders. Hence I made the point it would benefit Lendy in the long term if they kept the current model with interest held on account for the whole term. They say they would like to experiment. Well, why not occasionally experiment in favour of the ledners. Imo it would be fair and it would keep the borrowers on their toes if they know they have to pay interest monthy thus keeping interest paid for 6 months in advance.
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GeorgeT
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Post by GeorgeT on Aug 25, 2017 11:34:42 GMT
Why not just launch the loan with 6 month term - 180 days and after 6 month, every time they cough up a months interest it gets a 30 day extension? Because that would damage its liquidity and many investors like me would be reluctant to fund it. A 1 year loan is much more attractive.
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dp
Member of DD Central
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Post by dp on Aug 25, 2017 11:57:48 GMT
Why not just launch the loan with 6 month term - 180 days and after 6 month, every time they cough up a months interest it gets a 30 day extension? Because that would damage its liquidity and many investors like me would be reluctant to fund it. A 1 year loan is much more attractive. Understand your strategy but wholeheartedly disagree with your approach to this one I'm afraid.
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copacetic
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Post by copacetic on Aug 26, 2017 14:28:52 GMT
Googling the property brings up a local paper which suggests it was being marketed at £1.25m in September last year. Must have been a heck of a bidding war.
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Post by df on Aug 26, 2017 16:03:25 GMT
Seriously though... what will the status of this loan become if the borrower does not service the interest for months 7 to 12?
Will Lendy service the interest if the borrower does not? Will it become SBL or IA?
There would be a lot of complaints if a 365 day loan stopped paying interest with 183 days still to run. Is there any simple way to find out which loans don't have interest retained for the whole term? I couldn't find any info on this, atm all loans with positive term have IOA status.
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star dust
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Post by star dust on Aug 26, 2017 18:06:35 GMT
Seriously though... what will the status of this loan become if the borrower does not service the interest for months 7 to 12?
Will Lendy service the interest if the borrower does not? Will it become SBL or IA?
There would be a lot of complaints if a 365 day loan stopped paying interest with 183 days still to run. Is there any simple way to find out which loans don't have interest retained for the whole term? I couldn't find any info on this, atm all loans with positive term have IOA status. I don't think there is any easy way to tell. PBL 177, 178 and 179 with 263 days left and IOA status only had 6 months interest retained at drawdown and the particulars state "During the last six months of the 12 month loan period, the loan interest will actually be paid by the borrower, rather than rolled up into the loan." They are the only ones I recollect recently, the PBL055 and PBL057 are slightly different in that I think interest is being paid quarterly, but the remaining term and IOA reflect this at each payment, although I haven't really been following them.
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