LinkedFinance - new website

m320325

Squall Leonhart wrote: »

Hi Sceach, I have looked at the blog but it's a bit confusing trying to find things on it, can you link to your question and LF's reply?

if you click on the post called 'Loan Book Report Q1 2016', their comment is at the bottom of that

https://blog.linkedfinance.com/loan-book-report-q1-2016

Squall Leonhart

m320325 wrote: »

if you click on the post called 'Loan Book Report Q1 2016', their comment is at the bottom of that

https://blog.linkedfinance.com/loan-book-report-q1-2016

Found it, thanks! Wasn't worth the look for what I learned

Squall Leonhart

The following just in from Niall Dorrian, new head of LinkedFinance

New LinkedFinance Credit GradesThe plan is that over the coming weeks you will start to see a credit grade accompanying each loan. The grades will be as follows:

Grade and Risk Level

A Lowest

B Low

C Low

D Medium

E High

Y High

Grades 'A' to 'E' reflect how a business has performed during our credit evaluation process. A 'Y' grade indicates a young business - trading less than 2 years - that has passed our credit evaluation process.

As well as giving you more information about how individual loans compare to each other, this system will also allow us to publish estimated bad debt figures for each of the credit grades.

We will measure the levels of non-performing loans on our own loan book and across the wider P2P landscape to provide you with estimates for the levels of bad debt that you can expect to see from businesses under each grade. 

We believe that this system will help you to more effectively manage your risk and make better decisions about the businesses you want to lend to. 

---

We have also just launched 11-month, fixed-rate loans at 8.5%. They are aimed at businesses who would like to spread their annual insurance premiums across 11 monthly repayments.

sceach16

Linked have also included this in the Blog ! It is interesting reading......

Katawalah

Interesting read indeed, thanks Sceach for updating us on this! Unfortunately, I can't post the link, as I am a new user.

My takes on this read :

There were 11 "bad loans" reported in Q1, and there are 12 now, so 1 more in this quarter. .

Even if there are a fair number of new loans (134 so far for 2016), I have lent to less loans compared to 2015, because I have the feeling that they are less attractive this year than last year (interesting businesses to lend to and at attractive rates).

Katawalah

Mila Calm Ax wrote: »

Cartridge Green Q&A highlights some worrying issues. Their previous loan application stated a profit of ~30k for 2015, yet the new application indicates a loss of ~10k for the exact same period. It was put down to their actual costs being higher than they 'thought'. A swing of >10% of their turnover is quite a large margin of error, and demonstrates that many of the financial summaries are guesswork which have not been looked at in depth.

I totally agree with you on this, and thank you for highlighting it to us.

I read their Q/A and balance sheet, and I'm not even sure I would lend to them at 15%, so let alone at 8.5% fixed rate...

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The introduction of risk bands is potentially a move to introduce corresponding fixed interest rates. E.g. a lower fixed interest rate for better graded businesses.

sceach16

Mila Calm Ax wrote: »

The introduction of risk bands is potentially a move to introduce corresponding fixed interest rates. E.g. a lower fixed interest rate for better graded businesses.

Dont forget Linked previously had a (very) silly star system for loans. Most loans were 5* but other posters will tell you it meant SFA. Until they detail the basis for ratings and put their money where their mouth is by guaranteeing low risk loans I would be sceptical. I do take your point that it opens doors but time will tell. I still do not know what a risk free rate should be!

Strettie11

My correspondence & reply with LinkedFinance on Loan Default rate
Alan,
There may an inconsistency in how you are calculating your default rate of 1.16% compared to the way other P2P lenders calculate it. You have taken your loans in default > 120 days and divided by your total loan book.
But other P2p lenders exclude the last 120 days of loans issued as it would be impossible for them to ever fall into the 120 day+ default classification.

Reply to Strettie
Alan Fagan
14/07/2016, 15:12:08
Hi Strettie. Thanks for this. It's a fair point. I will talk to the credit team and look at changing this for future updates.I appreciate the feedback. Alan

sceach16

Did anyone cop this was a 24 month loan when it became live ? I only realised it when Linked sent out the usual marketing email !

Squall Leonhart

sceach16 wrote:

Did anyone cop this was a 24 month loan when it became live ? I only realised it when Linked sent out the usual marketing email !

No, didn't cop that. I like it though, 24mth open bid loans are good! Unfortunately a 10,000 loan usually offers a very low rate.

Azza89

Has anyone ever seen a loan where actual collateral has been put up? I see a few with Directors Guarantee but i would assume that is worth the paper its written on or would I be mistaken?

sceach16

Azza89 wrote: »

Has anyone ever seen a loan where actual collateral has been put up? I see a few with Directors Guarantee but i would assume that is worth the paper its written on or would I be mistaken?

I have not seen any collateral in my 12 months lending. I work on the basis that the loans are effectively unsecured and come last in the Q.

sceach16

Asked a question on day loan launched. Asked again today since no response!

"Several days later, why are you borrowing 10 k with 150k in cash? Is there any resemblance between the balance sheet on the dite and the balance sheet of the limited company?"

spudwould

Yet another bad loan .. Dog Eat Dog have stopped trading.
This loan brings my bad loans up to 8% of my total loan book.
So with my 2% to LF on my TOTAL loans and then the 48% income tax, 7% USC .. and factor in bad loans .. the site has become so much more less attractive.

3 1/2 yrs later they decide to add in RISK RATINGS ... TOO LATE if you ask me .. I am an investor and should have been provided all information that is pertinent to make a decision to invest!
That is it for me .. "I am out" .. taking all returns and investing into Mintos ... guaranteed loans are the way forward!

spudwould

I have requested this info from LF:

Hi can you tell me the status of the loan with *** *******.
This loan is now over 365 days in default ... what are the next steps?
When does a loan become a bad debt?

sceach16

"Several days later, why are you borrowing 10 k with 150k in cash? Is there any resemblance between the balance sheet on the dite and the balance sheet of the limited company?"[/QUOTE]

Response was

"BALANCE SHEET IS NOT OF O'CALLAGHAN'S DELI AND CAFE LTD, COMPANY HAS NO BORROWINGS AND IS PURELY FOR CASH FLOW REASONS, REGARDS PAT."

spudwould

sceach16 wrote: »

"Several days later, why are you borrowing 10 k with 150k in cash? Is there any resemblance between the balance sheet on the dite and the balance sheet of the limited company?"

Response was

"BALANCE SHEET IS NOT OF O'CALLAGHAN'S DELI AND CAFE LTD, COMPANY HAS NO BORROWINGS AND IS PURELY FOR CASH FLOW REASONS, REGARDS PAT."

[/QUOTE]

What is the point of the supplied "Balance sheet" ???? :eek:

Squall Leonhart

sceach16 wrote: »

Response was

"BALANCE SHEET IS NOT OF O'CALLAGHAN'S DELI AND CAFE LTD, COMPANY HAS NO BORROWINGS AND IS PURELY FOR CASH FLOW REASONS, REGARDS PAT."

spudwould wrote: »

What is the point of the supplied "Balance sheet" ????

That is worrying indeed... are they saying that LF supplied information doesn't pertain to their company at all??

Grecco

The best way to make money out of LF is to set up a company, provide some great story and borrow as much as you can, lure in a load of zombie investors and then don't pay it back.

Nody

Grecco wrote: »

The best way to make money out of LF is to set up a company, provide some great story and borrow as much as you can, lure in a load of zombie investors and then don't pay it back.

Waste of time due to the costs of setting up the company etc. compared to running a kickstarter of some form instead (less work and less visibility on the finance side of things). You can easily get 5x+ the value and only need to produce a catchy youtube video and some BS ideas.

sceach16

Grecco wrote: »

The best way to make money out of LF is to set up a company, provide some great story and borrow as much as you can, lure in a load of zombie investors and then don't pay it back.

Nody wrote: »

Waste of time due to the costs of setting up the company etc. compared to running a kickstarter of some form instead (less work and less visibility on the finance side of things). You can easily get 5x+ the value and only need to produce a catchy youtube video and some BS ideas.

I am a year on the site and one of the sarkier contributors to this forum BUT, as I posted previously, I have done well on Linked. My average gross return is 13.7 less 1.2 to Linked leaving 12.5 before tax/usc. My net return is 6.25% so far. I am lucky in that I have had no bad loans.....yet.

Squall Leonhart

sceach16 wrote: »

I am a year on the site and one of the sarkier contributors to this forum BUT, as I posted previously, I have done well on Linked. My average gross return is 13.7 less 1.2 to Linked leaving 12.5 before tax/usc. My net return is 6.25% so far. I am lucky in that I have had no bad loans.....yet.

+1

According to the figure in the myaccount panel, my average loan is @ 12.8%, so 11.6% after linked's fee, haven't done the maths, but assume it's about half that net. So, 5.8% or so. Assuming no loan defaults (which to date none of mine have), I'm happy it's a decent return, better than you'll get most other places.

sceach16

Take a look at the Q/A. This crowd borrowed last August. The financial info for this loan is hugely different. There is 750K goodwill relating to 2014 which did not appear in the balance sheet provided in 2015.

spudwould

Drimnagh Motors (Loan closing today) in reply to a Q from "colours"

Q: Do you have a service department and if so, what revenue does it generate?
by Colours (placed 0 bids for €0.00 on this loan)

A: Hello and thanks for the question. As I was saying in the profile, the mainstay of the business is in sales. We do some crash repairs/body work but sales are by far the biggest part of turnover. Thanks, Karl

This reply suggests that they have a panel beating dept. and also have a photo of a panel beater working on a car.
This Panel garage has nothing to do with Drimnagh Motors and is owned by a completely different person.

Do LF not screen the Q's and especially the reply's that are offered? As surely LF know that they have no Panel Dept.!"

m320325

spudwould wrote: »

Drimnagh Motors (Loan closing today) in reply to a Q from "colours"

Q: Do you have a service department and if so, what revenue does it generate?
by Colours (placed 0 bids for €0.00 on this loan)

A: Hello and thanks for the question. As I was saying in the profile, the mainstay of the business is in sales. We do some crash repairs/body work but sales are by far the biggest part of turnover. Thanks, Karl

This reply suggests that they have a panel beating dept. and also have a photo of a panel beater working on a car.
This Panel garage has nothing to do with Drimnagh Motors and is owned by a completely different person.

Do LF not screen the Q's and especially the reply's that are offered? As surely LF know that they have no Panel Dept.!"

Their website also says the same, see this video, do you know the name of the panel beating garage?

https://youtu.be/VpUIjeOXVoA?t=32

http://www.drimnaghmotors.com/

spudwould

m320325 wrote: »

Their website also says the same, see this video, do you know the name of the panel beating garage?

https://youtu.be/VpUIjeOXVoA?t=32

http://www.drimnaghmotors.com/

I do .. maybe they use the garage for all their work and they can call it that!

spudwould

m320325 wrote: »

Their website also says the same, see this video, do you know the name of the panel beating garage?

https://youtu.be/VpUIjeOXVoA?t=32

http://www.drimnaghmotors.com/

http://www.carbody.ie/

spudwould

m320325 wrote: »

Their website also says the same, see this video, do you know the name of the panel beating garage?

https://youtu.be/VpUIjeOXVoA?t=32

http://www.drimnaghmotors.com/

There may be a contract with both .. that I have to find out .. .always thought they were totally different entities .. now only 99.99% sure

Either way Paul Landers is a top class panel beater and I have personally seen his work which is outstanding.

This issue gave me cause for concern and hence the reason for not investing .. even at a high rate.

sceach16

"if you are a company, you must be registered with Companies Registration Office (the "CRO"), you must have filed accounts at the CRO for at least the two consecutive years immediately preceding your application to be a Borrower and at least 50% of your directors must be permanent residents of Ireland;"

this is from Linked website!!!! this company is less than 12 months old!