LinkedFinance - new website

Captainsatnav

garrettod wrote: »

Hi,

6 month loans have popped up, but they have been very few and far between.

Like you, I have very little interest in lending for 3 years regularly on LF. For me, it's because I'm not happy with the risk premium that they offer, or level of security offered for longer term debt. That said, the fact that most of their loans appear to be for 3 years on their website these days, shows that the offer certainly appeals to potential borrowers !

If you are after loan terms shorter than 3 years, then maybe have a look at a couple of the other P2P websites such as Grid, they often have 12-24 month loans on offer.

As for the Loan terms, I doubt LF will give them to you, but would love to know if they do

Crazy modus operandi - If I'm gonna be bound by contractual loan terms I'd like to know what they are!

garrettod

Hi,

Any joy with the request to see the Terms & Conditions, Captain ?

Captainsatnav wrote: »

Crazy modus operandi - If I'm gonna be bound by contractual loan terms I'd like to know what they are!

My bet is that LF would argue that you are bound by the terms and conditions that investors sign up to, when they first join LF, rather than the individual loan terms between each borrower and LF.

Captainsatnav

But there's a direct loan agreement between the borrower and the lender as per q8 here in their FAQs: https://linkedfinance.com/faq

lad6w

Is there any way to find out how many times Linked Finance (via their 3rd party collections agency) have initiated legal action against defaulting borrowers - would be interesting to see a ratio of defaults to legal attempts to enforce security? Does anyone with experience in commercial lending have a feel for what an appropriate ratio would be? I get that not every default is necessarily a candidate for legal proceedings.

garrettod

lad6w wrote: »

Is there any way to find out how many times Linked Finance (via their 3rd party collections agency) have initiated legal action against defaulting borrowers - would be interesting to see a ratio of defaults to legal attempts to enforce security? Does anyone with experience in commercial lending have a feel for what an appropriate ratio would be? I get that not every default is necessarily a candidate for legal proceedings.

Hi,

Best way to try and find out, is ask Lined Finance for the specific information. Don't be shy, as they have an obligation to you.

I would guess that very few cases (if any) have made it to the courtroom as yet. While that's my guess, it's not to say that I think it should be that way. In some instances, borrowers should be taken to court immediately, while in other instances, every effort should be made to try and work with them through legitimate problems.

There is no hard and fast ratio for how many cases that go into arrears should end up in court, it's simply based on the specifics of each individual case. The economy plays a part, changes in legislation over time, specific details relating to each case etc. etc.

Last, but not least, let us not forget that when things go wrong, it's the personal guarantee that we rely on for our security - there is no claim over the specific assets of the business that we have lent to (unless it happened to be a sole trader, and even then most sizeable assets might well be subject to finance agreements, or stock subject to retention of title etc.). This is something that gets almost zero mention from either LF, or people here, strangely enough !

garrettod

Captainsatnav wrote: »

But there's a direct loan agreement between the borrower and the lender as per q8 here in their FAQs: https://linkedfinance.com/faq

Hi,

I take it you are referring to this:

If your bid succeeds, money will be transferred from your Linked Finance lender account to the Linked Finance account of the borrower. When the loan is issued to the borrower, you will hold a loan contract. This entitles you to monthly repayments at the interest rate that accompanied the loan request.

Notwithstanding what it says above, can you really see a scenario where Linked Finance are producing hundreds, or possibly even a couple of thousand, loan contracts between each borrower and all of us ?

Perhaps they produce an appendix, which is read along with the standard loan agreement, and lists each of us as individual lenders, who together, form a lending syndicate or something ?

Also, if LF were producing these individual loan agreements then who signs for us - unless we've given someone at Linked Finance "power of attorney" or similar ? We've clearly consented to giving LF other powers, to enable them to manage loans on our behalf etc.

I suspect that the above section that I've quoted from (Item 8) on their website may be a little misleading, probably as a result of LF attempting to keep explanations simple in their FAQs. Perhaps I'm very wrong, but there's only one way to be sure - ask Linked Finance directly

Captainsatnav

garrettod wrote: »

Hi,

I take it you are referring to this:



Notwithstanding what it says above, can you really see a scenario where Linked Finance are producing hundreds, or possibly even a couple of thousand, loan contracts between each borrower and all of us ?

Perhaps they produce an appendix, which is read along with the standard loan agreement, and lists each of us as individual lenders, who together, form a lending syndicate or something ?

Also, if LF were producing these individual loan agreements then who signs for us - unless we've given someone at Linked Finance "power of attorney" or similar ? We've clearly consented to giving LF other powers, to enable them to manage loans on our behalf etc.

I suspect that the above section that I've quoted from (Item 8) on their website may be a little misleading, probably as a result of LF attempting to keep explanations simple in their FAQs. Perhaps I'm very wrong, but there's only one way to be sure - ask Linked Finance directly

It's clearly a template set of Ts and Cs - I just wanted to see them that's all. Anyway, I'm not gonna get rich off LF I only have a few hundred loaned out so I don't really care anymore.

garrettod

Captainsatnav wrote: »

....I only have a few hundred loaned out so I don't really care anymore.

You should always care, it's your hard earned money after all

...but I know what you mean.

coa000

Update:

coa000 wrote: »

Missed payments this week:

Glynn Organic Farm - Payment 30 of 36 missed - RECEIVED PAYMENT 30 of 36

Mossfield Organic Farm - Payment 3 of 24 missed - Grade C - RECEIVED PAYMENT 3 of 24

Boston Access - Payment 9 of 12 missed - Grade B

coa000

Leech Paper
Grade D
Missed repayment 3 of 12 on 10/March/2018

benjamin d

coa000 wrote: »

Leech Paper
Grade D
Missed repayment 3 of 12 on 10/March/2018

Payment made this morning.

Connemara sea cruises sent a message with a very considerate explanation of their missed payment today. It really put me at ease over their payments. It should be standard for all loans that there's a timely and adequate explanation.

There was no message for leech paper until they made the payment this morning and it's standard to not be told a thing about missed payments.

lad6w

benjamin d wrote: »

coa000 wrote: »

Leech Paper
Grade D
Missed repayment 3 of 12 on 10/March/2018

Payment made this morning.

Connemara sea cruises sent a message with a very considerate explanation of their missed payment today. It really put me at ease over their payments. It should be standard for all loans that there's a timely and adequate explanation.

There was no message for leech paper until they made the payment this morning and it's standard to not be told a thing about missed payments.

benjamin d wrote: »

coa000 wrote: »

Leech Paper
Grade D
Missed repayment 3 of 12 on 10/March/2018

Payment made this morning.

Connemara sea cruises sent a message with a very considerate explanation of their missed payment today. It really put me at ease over their payments. It should be standard for all loans that there's a timely and adequate explanation.

There was no message for leech paper until they made the payment this morning and it's standard to not be told a thing about missed payments.

I agree. The message from Connemara Sea Cruises was very detailed and informative. It is the only such message I ever remember receiving. I think this is down the the specific borrower rather than Linked - would be great to be wrong and that this is a sign of more active and informative communication from the platform on missed payments and troubled loans.

benjamin d

lad6w wrote: »

I agree. The message from Connemara Sea Cruises was very detailed and informative. It is the only such message I ever remember receiving. I think this is down the the specific borrower rather than Linked - would be great to be wrong and that this is a sign of more active and informative communication from the platform on missed payments and troubled loans.

I would put my house on it having been the company's own doing rather than Linked Finance's.

HSK Ltd's first loan has been categorised as "in default" now, presumably automatically after they passed 4 months in arrears. There was no update from LF on that, so I only noticed their repayment status in the Lent tab.

garrettod

benjamin d wrote: »

....HSK Ltd's first loan has been categorised as "in default" now, presumably automatically after they passed 4 months in arrears. There was no update from LF on that, so I only noticed their repayment status in the Lent tab.

Did you contact Linked Finance about this (lack of communication) ?

... things will never get better, unless we demand better

benjamin d

garrettod wrote: »

Did you contact Linked Finance about this (lack of communication) ?

... things will never get better, unless we demand better

You're dead right. I've contacted them before about things and should again about this. They won't care as long as their system is successful with minimal effort.

garrettod

benjamin d wrote: »

You're dead right. I've contacted them before about things and should again about this. They won't care as long as their system is successful with minimal effort.

Hi,

I think they will care, if enough of their lenders complain regularly. Without us, they have no money to lend !

We all need to keep putting pressure on LF to look after our interests better, not just leave it to someone else (that's not directed at you btw, we re all as guilty as each other on occasion ).

sceach16

JK engineering supplies (2458) due 7/03
Clarke t/a O'Reillys footwear (3082) due14/03

Not the first time on these but they are trying.

sceach16

Footgolf Cork (3875)

Payment due 22/03 has not arrived. Other payments duetoday have.

CeilingFly

I was once a borrower on LF and now am a small lender.

I would share concerns as their checks and balances would not be the most stringent and they'd almost coach you into how to present your company. That said, they did check figures and asked questions and it was almost like the banks of old - give a good story, present yourself well and you'll score a higher rating. Whereas the banks in most instances simply look at historic figures and give little credibility to any "hope" value. (a relatively new online store is very much on the 'hope' value)

On the repayment side, I was of the thought that if I had difficulty in paying, I'd prioritise LF over the bank and suppliers as with LF you'd be defaulting on circa 300 lenders and it would be difficult to go back for more.

On the positive side, it can allow for expenditure in areas where the banks are cagey about - we wanted to do a complete makeover of our online operation. We understood that it would take 3-4 years for the economies of scale to arrive. that was understood by LF, but not by the banks. (happy to say we were right and we no longer require any borrowings)

I have 5k in LF now, but less than 3k invested. I like a mix of established A rated business, but will also put amounts into start-ups understanding that some may fail, but once they do their best, I'd accept the loss. Probably a little on the altruistic side, but i was there not so long ago and it was a big help.

Two areas I'd like LF to look at

Short term stocking loans for Christmas season for retailers - banks to very well on this. Loans given in say August, interest only for 4months and full repayment on 31st Dec.

Start-up loans that will have a failure rate, but with a lower personal guarantee of say 50% of outstanding debt - priced appropriately (15%) and target some investors who like to use LF to help a new business start and know its a far higher risk. A bit like Microfinance Ireland.

manafana

CeilingFly wrote: »

I was once a borrower on LF and now am a small lender.

I would share concerns as their checks and balances would not be the most stringent and they'd almost coach you into how to present your company. That said, they did check figures and asked questions and it was almost like the banks of old - give a good story, present yourself well and you'll score a higher rating. Whereas the banks in most instances simply look at historic figures and give little credibility to any "hope" value. (a relatively new online store is very much on the 'hope' value)

On the repayment side, I was of the thought that if I had difficulty in paying, I'd prioritise LF over the bank and suppliers as with LF you'd be defaulting on circa 300 lenders and it would be difficult to go back for more.

On the positive side, it can allow for expenditure in areas where the banks are cagey about - we wanted to do a complete makeover of our online operation. We understood that it would take 3-4 years for the economies of scale to arrive. that was understood by LF, but not by the banks. (happy to say we were right and we no longer require any borrowings)

I have 5k in LF now, but less than 3k invested. I like a mix of established A rated business, but will also put amounts into start-ups understanding that some may fail, but once they do their best, I'd accept the loss. Probably a little on the altruistic side, but i was there not so long ago and it was a big help.

Two areas I'd like LF to look at

Short term stocking loans for Christmas season for retailers - banks to very well on this. Loans given in say August, interest only for 4months and full repayment on 31st Dec.

Start-up loans that will have a failure rate, but with a lower personal guarantee of say 50% of outstanding debt - priced appropriately (15%) and target some investors who like to use LF to help a new business start and know its a far higher risk. A bit like Microfinance Ireland.

thanks for posting, i think most agree that LF lost alot of its charm when it went to fixed rate bidding and putting up loans live with no peer review period. In old format users could put in high rate ask a question and then come back and decide to invest at lower rates.

Borrowers who used the Q&A well tended to get rates lower than currently seen in the market, I see some of the 50k loans funded in seconds, and think how in old format they could reduce the interest rate with bit of interaction with lenders.

at9qu5vp0wcix7

CeilingFly wrote: »

I was once a borrower on LF and now am a small lender.

I would share concerns as their checks and balances would not be the most stringent and they'd almost coach you into how to present your company. That said, they did check figures and asked questions and it was almost like the banks of old - give a good story, present yourself well and you'll score a higher rating. Whereas the banks in most instances simply look at historic figures and give little credibility to any "hope" value. (a relatively new online store is very much on the 'hope' value)

On the repayment side, I was of the thought that if I had difficulty in paying, I'd prioritise LF over the bank and suppliers as with LF you'd be defaulting on circa 300 lenders and it would be difficult to go back for more.

On the positive side, it can allow for expenditure in areas where the banks are cagey about - we wanted to do a complete makeover of our online operation. We understood that it would take 3-4 years for the economies of scale to arrive. that was understood by LF, but not by the banks. (happy to say we were right and we no longer require any borrowings)

I have 5k in LF now, but less than 3k invested. I like a mix of established A rated business, but will also put amounts into start-ups understanding that some may fail, but once they do their best, I'd accept the loss. Probably a little on the altruistic side, but i was there not so long ago and it was a big help.

Two areas I'd like LF to look at

Short term stocking loans for Christmas season for retailers - banks to very well on this. Loans given in say August, interest only for 4months and full repayment on 31st Dec.

Start-up loans that will have a failure rate, but with a lower personal guarantee of say 50% of outstanding debt - priced appropriately (15%) and target some investors who like to use LF to help a new business start and know its a far higher risk. A bit like Microfinance Ireland.

Thanks for that insight. I am happy to hear that your business is going well!

garrettod

CeilingFly wrote: »

....
Start-up loans that will have a failure rate, but with a lower personal guarantee of say 50% of outstanding debt - priced appropriately (15%) and target some investors who like to use LF to help a new business start and know its a far higher risk. A bit like Microfinance Ireland.

Hi,

While I appreciate and was interested in much of what you had to say above, I must pull you up on this one... there's no way in hell that 15% is an appropriate rate for a start up, particularly with a lower PG level than the amount of debt that is advanced.

The Microfinance Ireland example is a good one. Do you know what level of arrears and loan default levels they have ? I am not currently up to speed, but on one occasion in the past, I believe they were near 50% arrears on their loan book. Also, I don't think that they fund start ups, with only part of the loan secured by a PG and nothing else, do they ?

Start ups by their nature have a very high risk, so the reward should reflect that risk. As a rule, that's why start ups tend to be financed by equity, rather than debt, as the potential return for an equity holder is much higher than it is for a lender.

IMHO, Linked Finance, and the other P2P platforms should not be providing loan finance for start ups (whatever about equity investments as a possible new area to get into and even then, I don't think they are suited for this), as the rate they would need to charge would be too high and probably over burden a small start up business, from a financial perspective. Investors on the other hand, would be rewarded at a later point with potential dividends, or increase on the value of their shares, but won't be putting monthly pressure on cashflows to service debt repayments.

garrettod

manafana wrote: »

thanks for posting, i think most agree that LF lost alot of its charm when it went to fixed rate bidding and putting up loans live with no peer review period. In old format users could put in high rate ask a question and then come back and decide to invest at lower rates.

Borrowers who used the Q&A well tended to get rates lower than currently seen in the market, I see some of the 50k loans funded in seconds, and think how in old format they could reduce the interest rate with bit of interaction with lenders.

You will find much of that over on Grid Finance, it's one of the reasons that I favour Grid over LF and have mentioned it previously.

IMHO, LF are pricing too many of their loans too low, to reflect their true risk level.

The auto-bid system on LF is what's driving most of the loans to be filled so quickly and quite frankly, it's a bit dangerous imho - as it's used by a lot of people who are desperate to "get in on the action" and get lending, but who don't seem to appreciate that it's driven by the LF risk weighting system, which may not be as good as they think it is. For me, the auto-bid system has it's uses, but only for high grade, short term loans, where the risk of default is somewhat reduced.

Merowig

Was surprised to see that Fallon & Byrne had last week a loan on LF. Too bad it already got filled up.

golfman

Merowig wrote: »

Was surprised to see that Fallon & Byrne had last week a loan on LF. Too bad it already got filled up.

I'm in that loan and it looks like they'll be back for more.... "To support this period of growth, Fallon & Byrne would like to raise a total credit facility of €250,000. The first tranche is a 12-month loan of €90,000 with plans to return to the platform in the weeks ahead for the balance."

Merowig

Thanks!

garrettod

Merowig wrote: »

Was surprised to see that Fallon & Byrne had last week a loan on LF. ....

Why, because they are almost a "household name" around Dublin ?

.... I can't recall the details, but I think the business or it's promoters have had one or two issues in the not too distant past (no doubt you'll quickly find details on google), so their traditional bankers may not be as supportive as they might hope.

Also, lets not forget, P2P usually requires a lot less onerous conditions and security than the main banks - a key reason for the need for higher interest rates than the Banks charge, but not necessarily something LF appear to understand.

whampiri

Hsk have made a repayment. 5 months later but it's a move in the right direction. Hope they're out of whatever financial difficulties they were in.

manafana

golfman wrote: »

I'm in that loan and it looks like they'll be back for more.... "To support this period of growth, Fallon & Byrne would like to raise a total credit facility of €250,000. The first tranche is a 12-month loan of €90,000 with plans to return to the platform in the weeks ahead for the balance."

note all last few % of their 2nd loan up now, looks suitable

garrettod

manafana wrote: »

note all last few % of their 2nd loan up now, looks suitable

€70k raised in 41 mins !!!

.. that's probably because of the auto bids though, and if people haven't opted out of the repeat bids, then some people with auto bids may find that they've now lent more into Fallon & Byrne than they wanted to.

I'd love a little more breakdown on what they are spending the total amount on, as €250k seems a lot to be spending on improvements of existing outlets, that have only been opened in recent years. If I were to guess, I'd say much of the cash is going on opening another outlet somewhere.

Ultimately, a 12 month loan to a cash generating business probably isn't the worst risk to take.