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Strettie11

sceach16 wrote: »

This loan is 14 days on Linked and not a question answered. Draw your own conclusion!

Was speaking to Galport this evening and he says he posted a question on why JC Products loan was extended without questions being answered. This question was not posted to the forum by LF but was answered privately, basically told it is beyond their control.

But surely refusal to extend the loan would be within their control and force the borrowers hand ?

Strettie11

Just a heads up to anyone involved in funding this loan recently for The Old Stand Bar for a total of €20,000.

Based on an email yesterday from GRID FINANCE the very same Old Stand Bar is seeking €30,000 of funding through them !!!!

darragh0000

What do others think about 'Mink Hand & Foot Spa'? I was wondering why Cross Atlantic Properties Limited are looking for the loan and not 'Mink Hand and Foot Spa Limited'. Does it seem unusual the turnover increased X5 in one year for a 10 year old company

basically does everything look OK with this borrower from looking at the financial info?

darragh0000

When I first started lending on Linkedfinance I saw the table of expected bad debt rates. I just assumed these rates were based on their experience since the company started, I realise now theres no connection.

The 'bad debt' rates almost match fundingcircle in the UK

support.fundingcircle.com/entries/22584498-What-are-the-estimated-bad-debt-rates-and-how-are-they-calculated-

Funding Circle A+ A B C D E
Est. annual bad debt rate 0.6% 1.5% 2.3% 3.3% 5.0% 8.0%

Linkedfinance A B C D E Y
Est. Annual bad debt rate 1.5% 2.3% 3.3% 5.0% 8.0% 8.0%

Dream123

darragh0000 wrote: »

When I first started lending on Linkedfinance I saw the table of expected bad debt rates. I just assumed these rates were based on their experience since the company started, I realise now theres no connection.

The 'bad debt' rates almost match fundingcircle in the UK

support.fundingcircle.com/entries/22584498-What-are-the-estimated-bad-debt-rates-and-how-are-they-calculated-

Funding Circle A+ A B C D E
Est. annual bad debt rate 0.6% 1.5% 2.3% 3.3% 5.0% 8.0%

Linkedfinance A B C D E Y
Est. Annual bad debt rate 1.5% 2.3% 3.3% 5.0% 8.0% 8.0%

Good spot!!

So the 'grading' bad debt rates are most likely copied and have little or no basis in linked finance actual experience!!

I'd be very dubious of using their grading as the basis of any lending decision without proper insight on how they are calculated

Strettie11

darragh0000 wrote: »

What do others think about 'Mink Hand & Foot Spa'? I was wondering why Cross Atlantic Properties Limited are looking for the loan and not 'Mink Hand and Foot Spa Limited'. Does it seem unusual the turnover increased X5 in one year for a 10 year old company

basically does everything look OK with this borrower from looking at the financial info?

Darragh0000,

In relation to the financial statements for Mink I suspect the 2014 accounts do not represent a full year of trading for the spa and is a question that should be asked.

It is also unusual for a salon/ spa to have working capital issues as it is a cash business with a relatively stable level of stock and expenditure. I suspect in this case though based on the high level of interest in the accounts that there are loan repayments putting pressure on cash resources.

Also from the business profile it is unusual for a business this size that the extra funding is being raised from the credit union.

Also there is an inconsistency from 1 of the articles they linked to and the business profile currently stating they have 40 employees versus 47 in March 2015. Also 2 of the articles mentioned expanding to a 3rd premises, what happened these plans ?

Having said that from talking to someone I know in the area this is a very busy well regarded business.

darragh0000

this was due to end at 9pm tonight, so I was hoping my bid would be refunded, as seemed unlikely to reach 90% before then. Just see now they've extended by 1 day... Dont see why Linkedfinance are extending seeing as the owner, Jim Cuttriss, is ignoring lenders questions.

tomwaits48

darragh0000 wrote: »

this was due to end at 9pm tonight, so I was hoping my bid would be refunded, as seemed unlikely to reach 90% before then. Just see now they've extended by 1 day... Dont see why Linkedfinance are extending seeing as the owner, Jim Cuttriss, is ignoring lenders questions.

This is really annoying me, will they hold on to my bid indefinitely? Bad from.

Strettie11

The only objective LF have is getting loans to 90% so they offer loan financing. They have no concerns whether questions are answered or not as seen from reply Galport received from them.

As per article Duckett posted a couple of weeks ago they are hoping they will soon not have to deal with us at all

"The company is also seeking to secure up to €150 million in liquidity commitments, which it would lend out over the next two years. This money is likely to come from institutions or pension funds and would diversify its funding base away from the retail investors."

sceach16

Strettie11 wrote: »

The only objective LF have is getting loans to 90% so they offer loan financing. They have no concerns whether questions are answered or not as seen from reply Galport received from them.

As per article Duckett posted a couple of weeks ago they are hoping they will soon not have to deal with us at all

"The company is also seeking to secure up to €150 million in liquidity commitments, which it would lend out over the next two years. This money is likely to come from institutions or pension funds and would diversify its funding base away from the retail investors."

Pension Funds operate under strict rules. They are heavily regulated and governed by trustees. I doubt if many would place funds with Linked directly and as for placing funds in loans that the terms and the duration and the amount are uncertain and variable at the whim of someone somewhere.....I doubt it.

Other institutions could well include the tooth fairy but most will be regulated and are unlikely to touch Linked with the proverbial!

Dream123

sceach16 wrote: »

Pension Funds operate under strict rules. They are heavily regulated and governed by trustees. I doubt if many would place funds with Linked directly and as for placing funds in loans that the terms and the duration and the amount are uncertain and variable at the whim of someone somewhere.....I doubt it.

Other institutions could well include the tooth fairy but most will be regulated and are unlikely to touch Linked with the proverbial!

I would assume any such press releases and puff piece fillers for the papers give a very rosey optimistic one sided view.

I couldn't see many major investors being interested in a company that has only lent €11m in 3 years! Recent stats probably indicate they are doing c.500k-1m a month now... But that's still miles off the volumes there various press releases mention (€250m over 3 years lending target... That's about about €7m a month, €150m liquidity fund).

I like crowd funding, its a good investment and a bit of a hobby (I clearly am a nerd!) but I don't see the scope for the kind of volume they are projecting, bank lending is way cheaper for the average SME typically 5%-8% rates, so I guess what we see on LF are those who can't access bank lending or a minority who just like the idea of something alternative even if it is more expensive and slower than other ways of accessing SME loans ... Hardly the basis of a large scale lending operation? The Irish market probably isn't big enough

Strettie11

Yes I think the number LF quoted in the press release is high but I think you are going to be surprised how P2P will be funded going forward moving away from small lenders such as ourselves.

Just look at how funding of P2p has changed in the UK over the last 18 months diversifying their funding base :

- partnerships with smaller banks to fund loans, Metro bank partnership with Zopa in UK
- private wealth funds providing funding for loans through P2P
- Funding circle raised £165 million though an income fund thry created which is listed on UK stock exchange offering between 8-9% return. Currently they have loaned out 100 million of that fund through their platform on loans that were never offered to retail lenders
- Self-invested personal pensions are now allowed to invest in P2p loans in the UK
- Santander have agreement to direct lenders they have rejected to Funding circle
- funding circle are lending funds from 11 county councils and 2 universities in the UK

Consider the size of the market P2P is chasing in Ireland
first half 2016 annualised SME new credit 2.7 billion
plus on top of this 300 million rejected for credit
micro business rejection rate is around 18% which are not necessarily bad business just do not have history or assets for banks to be confident to loan to.

When comparing bank loan rates a lot of loan rates are higher than those quoted for non AA loans and many SME's fund short term credit on overdrafts which are high interest rate and very high bank fees and charges

I have had 2 SME's when we calculated total cost of overdraft v LF mid grade short term funding the P2P came out cheaper, was a surprise to me.

Will be interesting

sceach16

darragh0000 wrote: »

this was due to end at 9pm tonight, so I was hoping my bid would be refunded, as seemed unlikely to reach 90% before then. Just see now they've extended by 1 day... Dont see why Linkedfinance are extending seeing as the owner, Jim Cuttriss, is ignoring lenders questions.

Missed the end .....did they make 90% after many extensions....?

darragh0000

sceach16 wrote: »

Missed the end .....did they make 90% after many extensions....?

87.5%

darragh0000

JC Products:

Increased to 97.2% today as loan amount was reduced From 40k to 36k, even though bidding ended 9pm last night

Linkedfinance.com/loan/3732

Philbert

Sorry for being thick (really).

Can anyone tell me what interest can be gained on a €100 loan at 10.7% over 24 months? If you could please also show how the LinkedFinance fee is accounted for that would be super.

(But please don't confuse the issue with Income tax).

I have looked at a previous similar response, several online interest calculators, and even cast my mind back to commerce studies in early secondary school but i keep getting different results.

Thanks!

sceach16

darragh0000 wrote: »

JC Products:

Increased to 97.2% today as loan amount was reduced From 40k to 36k, even though bidding ended 9pm last night

Linkedfinance.com/loan/3732

At this stage,I have lost all confidence in Linked. The terms of loans do not appear to have any status and can be changed at any stage. The rating system is incomprehensible.....loans for loss making companies / negative net assets are high risk !

Dream123

Strettie11 wrote: »

Yes I think the number LF quoted in the press release is high but I think you are going to be surprised how P2P will be funded going forward moving away from small lenders such as ourselves.

Just look at how funding of P2p has changed in the UK over the last 18 months diversifying their funding base :

- partnerships with smaller banks to fund loans, Metro bank partnership with Zopa in UK
- private wealth funds providing funding for loans through P2P
- Funding circle raised £165 million though an income fund thry created which is listed on UK stock exchange offering between 8-9% return. Currently they have loaned out 100 million of that fund through their platform on loans that were never offered to retail lenders
- Self-invested personal pensions are now allowed to invest in P2p loans in the UK
- Santander have agreement to direct lenders they have rejected to Funding circle
- funding circle are lending funds from 11 county councils and 2 universities in the UK

Consider the size of the market P2P is chasing in Ireland
first half 2016 annualised SME new credit 2.7 billion
plus on top of this 300 million rejected for credit
micro business rejection rate is around 18% which are not necessarily bad business just do not have history or assets for banks to be confident to loan to.

When comparing bank loan rates a lot of loan rates are higher than those quoted for non AA loans and many SME's fund short term credit on overdrafts which are high interest rate and very high bank fees and charges

I have had 2 SME's when we calculated total cost of overdraft v LF mid grade short term funding the P2P came out cheaper, was a surprise to me.

Will be interesting

Some good points there, alternative lending has made big strides. I guess really I don't see LF to be the ones to take it to the next level. This may well be quoted back to me in a couple of years!!!

sceach16

Q3 loan book update not yet published.

Strettie11

they heard you sceach16 loan book report is up

ShoulderChip

Philbert wrote: »

Sorry for being thick (really).

Can anyone tell me what interest can be gained on a 100 loan at 10.7% over 24 months? If you could please also show how the LinkedFinance fee is accounted for that would be super.

(But please don't confuse the issue with Income tax).

I have looked at a previous similar response, several online interest calculators, and even cast my mind back to commerce studies in early secondary school but i keep getting different results.

Thanks!

Hi, attached the answer

Strettie11

ShoulderChip,

Attached repayment schedule for €100, 3 year, 10.7% loan.

sceach16

Strettie11 wrote: »

they heard you sceach16 loan book report is up

Rough calculation....4% of loans over a year old are headed west. U need 9% interest rate to break even.......

spudwould

sceach16 wrote: »

Rough calculation....4% of loans over a year old are headed west. U need 9% interest rate to break even.......

So if I lend to Murphys Ice Cream @ 9.6% over 36 months ... I am scraping through the break even point?

After LF take their 2% this works out at @ 2.53% annual?
If so this is madness and lenders on LF are off their rockers!

Now saying that .. I am bad at math.

tomwaits48

Reduction in dirt tax good news at least for us

sceach16

tomwaits48 wrote: »

Reduction in dirt tax good news at least for us

I think we pay income tax ...not dirt....so no joy!

sceach16

spudwould wrote: »

So if I lend to Murphys Ice Cream @ 9.6% over 36 months ... I am scraping through the break even point?

After LF take their 2% this works out at @ 2.53% annual?
If so this is madness and lenders on LF are off their rockers!

Now saying that .. I am bad at math.

9.6 % less Linked 1%is 8.6 less 50% Tax/Usc is 4.3% less provision for bad loan ....dependent on your view of Murphys. Linked say1.5% for A loans. So that would put it at 2.8% return for most taxpayers. Not a great return but not the worst. Murphy's have a great product...nicer in Dingle than anywhere else (IMO)...so decision is yours!

BUT always remember to diversify.....no more than a low% of your lending in any loan.

darragh0000

My bid on JC products was returned, received email:

"The borrower has decided not to proceed with this loan.
Loan failed to hit minimum subscription percentage of 90%"

Loan currently displayed as 97.2%

darragh0000

Strettie11,
Is it possible to share your spreadsheet with other lenders? It would be very useful

Strettie11

Yes I will share just need to make it easy to use for all loan periods