LinkedFinance - new website

sceach16

A few posts on linked blog(including some of mine)

Strettie11

Microfinance Ireland announced this weekend that their rate is dropping to 7.8% from 1st July, asked LinkedFinance will this impact their rates question and answer below


Alan,

The 3 year fixed rate of 8.8% seems to be directly linked to the Microfinance Ireland rate as you co fund some loans with them. Microfinance Ireland announced this weekend that their rate is dropping to 7.8% from 1st July. Will this also be the case for LinkedFinance fixed rate loans ?

Reply to Strettie
Alan Fagan
20/06/2016, 11:32:13
Hi Strettie, thanks for your question. We do not have any plans to change the 8.8% rate on 3-year fixed rate loans in the immediate future. Regards, Alan

at9qu5vp0wcix7

Rare opportunity for a good rate tonight on the Ashford Collection. Was previously up as a fixed rate loan, but changed due to lack of progress.

sceach16

Mila Calm Ax wrote: »

Rare opportunity for a good rate tonight on the Ashford Collection. Was previously up as a fixed rate loan, but changed due to lack of progress.

Thats what worries me about fixed rate loans. :mad: Linked tell us they are good enough for 8.... so why is the borrower looking at 13.47 now and aparently willing to take it? Ended up at 13.34 average....4.54 points or 52% above 8.8!

Strettie11

Agreed Seach16. All we have to go on is 1 balance sheet 2 P&L's and a business profile and in my case a visit to the shop.

LF need to detail what else they have from this business to make the fixed loan decision? It is interesting to see alot of the multi year fixed rates now struggling to get funds.

tomwaits48

a 3 year 8.8% loan is closing tonight and only half funded. I hope it fails and LF take note.

at9qu5vp0wcix7

tomwaits48 wrote: »

a 3 year 8.8% loan is closing tonight and only half funded. I hope it fails and LF take note.

It will be elongated or converted to an auction style, there is precedence.

sceach16

tomwaits48 wrote: »

a 3 year 8.8% loan is closing tonight and only half funded. I hope it fails and LF take note.

Mila Calm Ax wrote: »

It will be elongated or converted to an auction style, there is precedence.

This has been extended/reinvented twice already. The first bid was on 2 June, another on 3 June. Next bids were 7 June. Late last week the closing date was extended til today making it a 21 day loan. You may well be correct that it resurfaces in some shape or form.

A general comment. We all need to remember that there is a guy behind this loan (genuinely) trying to run a business.

Strettie11

So if we took Howleys Family butchers loan as an example what would encourage you to invest in this loan
- shorter loan period
- a higher fixed rate
- a balance sheet for Sept 2015
- an non cash incentive
- a credit score from Linked Finance
Or something else

To start the ball rolling a more current balance sheet so I could compare creditor numbers plus a 10% fixed rate and I would fund

sceach16

Strettie11 wrote: »

So if we took Howleys Family butchers loan as an example what would encourage you to invest in this loan
- shorter loan period
- a higher fixed rate
- a balance sheet for Sept 2015
- an non cash incentive
- a credit score from Linked Finance
Or something else

To start the ball rolling a more current balance sheet so I could compare creditor numbers plus a 10% fixed rate and I would fund

Three comments.
1)10% less 1.2% is 8.8% less 50% USC/Tax is 4.4% less any losses which are nondeductible. Linked figures show 3% (by number) not meeting payments. On an even spread of such loans, net return could be 1.4%. Outcome could be better or worse.
2) The most important thing for a premium rate (to borrowers) is justification-details of credit rating and criteria for it.
3) A term of 3 years carries a greater risk than 1 year loans. I would put the premium at closer to 3%

m320325

Theres a 3 year fixed rate loan for 'Caherbeg Free Range Pork Limited' but it doesn't have the red line on the main photo '3 Year fixed rate', not sure why. It seems like it has a chance of getting fully funded, in 4 days they've received 7,750 out of 25,000 (31%), it I exclude the 25,000 bid from MFI.

m320325

Strettie11 wrote: »

So if we took Howleys Family butchers loan as an example what would encourage you to invest in this loan
- shorter loan period
- a higher fixed rate
- a balance sheet for Sept 2015
- an non cash incentive
- a credit score from Linked Finance
Or something else

To start the ball rolling a more current balance sheet so I could compare creditor numbers plus a 10% fixed rate and I would fund

I think those are all good points and I saw your suggestions on the linkedfinance blog, I completely agree with everything you suggested


https://blog.linkedfinance.com/fixed-rate-loans-are-first-rate-loans

- any heading on balance sheet with "Other" in the description should be broken down as part of initial profile. If LF is doing its credit checking they already have this infomation, if lender does not want to provide state on profile to avoid Q's being asked

- Where balance sheet metrics are worse than certain levels there should be an explanation given on profile by borrower.: stock greater than 100 days, debtors greater than 80 days....

- cash flow statements prior and forecast to reduce concerns on cash deficits. I think 1 fixed rate loan has been in conjunction with Microfinance Ireland @ 8.8 %. To apply for the Microfinance portion of the loan the business had to provide 3 years forecast cash flows and Profit & Loss accounts yet we as lenders are expected to provide funding at the same rate with none of this information !!!!!!!

- what are the personal quarantees given on the loan, these need to be detailed

- a tighter debt recovery timeline on fixed rate loans. lenders are giving up any bad debt premium on the basis that LF have done their homework in setting the loan rate

- directors drawings/salaries taken from the business . I know this would be confidential info but even if they provided the info within bands .

- 2 balance sheets need to be provided whether this is a management one or the last 2 filed with CRO

- aged debtors analysis

spudwould

sceach16 wrote: »

Thats what worries me about fixed rate loans. :mad: Linked tell us they are good enough for 8.... so why is the borrower looking at 13.47 now and aparently willing to take it? Ended up at 13.34 average....4.54 points or 52% above 8.8!

That is exactly why I did not bid on this loan. It was screaming that the company were depending on this loan!
No matter what the % rate was I was staying well clear!

spudwould

Also looking at the live loan book there are 16 live loans, which of course is great, but 9 are "Fixed Rate" loans.

So 60% of loans are at a fixed Rate 3 over 1 year, 5 over 2 years & 1 over 3 years.
As I see it Linked Finance is getting away from "Crowd Funding" .. all I see are companies that are offering ME the chance of giving THEM a loan at THEIR terms and conditions!
To me this is not crown funding .. it is the usual bull****.
If you want a loan .. "Ask me" and I may give it to you but on MY terms and conditions.
One condition is a good and most RECENT up-to-date Management accounts. I see one that is 21 months old! YES 21 months FFS!

sceach16

sceach16 wrote: »

Thats what worries me about fixed rate loans. :mad: Linked tell us they are good enough for 8.... so why is the borrower looking at 13.47 now and aparently willing to take it? Ended up at 13.34 average....4.54 points or 52% above 8.8!

spudwould wrote: »

That is exactly why I did not bid on this loan. It was screaming that the company were depending on this loan!
No matter what the % rate was I was staying well clear!

Now U tell us!:eek:

scheister

Howleys fixed rate loan only 42.7% funded in the end.

sceach16

nobody bid between 8 and 10 tonight! :):rolleyes::o:mad::(:eek::cool::P:confused::pac::D;)

scheister

With the fixed rate loans. Do they stay outstanding till the time is up or can they be accepted once they are fully funded.
Just wondering as this is the first time i have bid on a fixed rate loan

sceach16

scheister wrote: »

With the fixed rate loans. Do they stay outstanding till the time is up or can they be accepted once they are fully funded.
Just wondering as this is the first time i have bid on a fixed rate loan

They are generally closed and moved to previous successful loans. Since no one else can bid, there is little logic in leaving them on site.

sceach16

sceach16 wrote: »

I think a 3 yr fixed loan due to mature in a few days has disappeared. Please advise Linked Finance if you find it. Otherwise their statistics and puffing about successful loans may not be accurate. This was another that
"When you see a fixed-rate loan, however, you know that not only has the business met our normal criteria, but it has also exceeded a range of additional requirements relating to balance sheet, repayment capacity, turnover and credit history metrics.

Many of our high-interest lenders might balk at the 8.8% interest available on 3-year, fixed-rate loans but we feel that based on the strength of the businesses that qualify for these loans, this is a fair rate of return that refelcts the lower level of risk associated with these stronger businesses."

Lenders didn't think so !:eek::eek::eek:

This loan metamorphed into a 2 year loan but disappeared again!! This is very careless losing loans like this! It is also bringing the site, .ie Linked,a risk of reputational damage. Loans appearing/disappearing/being lengthened/ term changed do not give comfort to me and I suspect other lenders and borrowers. This is a credibility issue .

PanAC

Hi All. After over 2 years in Linked, I have only just discovered this thread. And I thought I was all alone with my increasing frustration of the way things are developing. They were great back in April '14 when I started and most lenders had some interest in being part of a real loan market for small businesses. Within the last year, I've noticed there are not enough lenders in the market, at least not enough to sustain a real functioning market. So part of Linked's attempt to solve that problem - Fixed Rate offerings! What a poor solution!
The old LF may not have been perfect, but they were brave to create what they did - it's system had a large element of feedback and self-regulation. The more lenders; the lower the rate became. In general, the borrowers ended up with a loan rate that reflected the community's view of the risk involved. Well many lenders have opted out of these fixed rate loans, so the borrowers end up with nothing, like last night's poor joke. I believe the borrowers are poorly advised by Linked. If LF continue to push the fixed rates, they might find lenders going elsewhere. OMO and I would love to know if any other lenders see it differently. LF was a breath of fresh air when it started, is it only my imagination that it is loosing its way?

spudwould

PanAC wrote: »

Hi All. After over 2 years in Linked, I have only just discovered this thread. And I thought I was all alone with my increasing frustration of the way things are developing. They were great back in April '14 when I started and most lenders had some interest in being part of a real loan market for small businesses. Within the last year, I've noticed there are not enough lenders in the market, at least not enough to sustain a real functioning market. So part of Linked's attempt to solve that problem - Fixed Rate offerings! What a poor solution!
The old LF may not have been perfect, but they were brave to create what they did - it's system had a large element of feedback and self-regulation. The more lenders; the lower the rate became. In general, the borrowers ended up with a loan rate that reflected the community's view of the risk involved. Well many lenders have opted out of these fixed rate loans, so the borrowers end up with nothing, like last night's poor joke. I believe the borrowers are poorly advised by Linked. If LF continue to push the fixed rates, they might find lenders going elsewhere. OMO and I would love to know if any other lenders see it differently. LF was a breath of fresh air when it started, is it only my imagination that it is loosing its way?

Like yourself I am a long time member of LF .. 3yrs 3mnts and I can safely say your observations are correct(But that is just my view)!
When LF started I bid once monthly rising to 3 to 4 times a month as I only gave loans that I thought were sustainable. As I have opted to stay away from Fixed Rate loans I am finding it increasingly harder to invest into companies!
But on the other-hand ... it is working a treat for the companies that have opted for the bidding market, as a lot of lenders will not lend to Fixed Rate loans, they are putting their resources into the bidding market which has seen the rates plummeting on these loans.
So at least someone is winning

m320325

I've noticed 2 changes on the website tonight:

- The bidder list/question tabs were hidden immediately after the loan ended tonight

- If you go to 'My Account' and 'Lent', the business names have now all become links so you can view the Business Profile and Financial Summary of old loans.

PanAC

m320325 wrote: »

I've noticed 2 changes on the website tonight:

- The bidder list/question tabs were hidden immediately after the loan ended tonight

Just looking at my few records of the recent past auctions - there is a growing number of lenders piling in in the last few minutes -
Last 60 seconds €4,420 added
Last 10 minutes €12,970 added
Last 30 minutes €15,120 added
That was for a €30,000 loan. In other words, over half of the loan amount was bid in the last 30 minutes before closing. These numbers are growing exponentially since LF have opened their new site format. Now it seems they have run back to the bad old days and hide the information as soon as the auction closes. Conor & co have a duty to maintain a balance between the needs of borrowers and lenders. Perhaps by restricting the information available to lenders he hopes to increase the number of lenders in his system! I hope he has a Plan B

One of the processes people can use to reduce the level of risk in a situation to to access more pertinent information. By removing some of that information, you might increase the level of risk beyond to the point where you decide to walk away

Strettie11

Has NGR Indian Imports loan disappeared again or is it just me

m320325

Strettie11 wrote: »

Has NGR Indian Imports loan disappeared again or is it just me

Yes they emailed me yesterday saying my bid was returned 'The borrower has decided not to proceed with this loan.'

Strettie11

Thanks m320325, another fixed rate loan that failed twice

PanAC

Now if they get another 100 failures like NRG, they might start questioning the intelligence of Fixed Rate loans.

PanAC

Hi All - Does anyone have any experience of using Bondora? I'm wondering if it is worth a dabble as an alternative to LF? Their website "looks" legit, I've instigated a test transfer of a few euro to them, but, before I venture further, I wonder has anyone any advice? Thanks.

at9qu5vp0wcix7

PanAC wrote: »

Hi All - Does anyone have any experience of using Bondora? I'm wondering if it is worth a dabble as an alternative to LF? Their website "looks" legit, I've instigated a test transfer of a few euro to them, but, before I venture further, I wonder has anyone any advice? Thanks.

Haven't used it personally, but it appears to be higher yield + higher risk compared with other P2P platforms.