LinkedFinance - new website

manafana

indeed auto bid is an issue, loan in general for 12 months looks fine, they reported improving financials after nearly going out in 2012.

garrettod

manafana wrote: »

indeed auto bid is an issue, loan in general for 12 months looks fine, they reported improving financials after nearly going out in 2012.

Most of the financial information provided on P2P websites is out of date, so not worth a lot. We should really be getting some management accounts / projections, for it to be meaningful (and particularly, when there's a large sum being borrowed, or other notable business risk being taken).

Also, again on a general note, we really should be getting some sort of info on the people providing the PGs, after all, that's the only security we have on these loans. As a rule of thumb, Banks don't do well on recovering funds via PGs for business loans... I've little reason to believe that P2P networks would do any better and it's something that people don't pay enough attention to when looking at the risk-v-return.

GypsyByName

So I just took my first leap with LinkedFinance. Not really sure what I am at but just a minimal bid, probably do that monthly to see how it fares out.

CeilingFly

garrettod wrote: »

€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.

They are opening in Dundrum, though I suspect that is still 12-15 months away as small planning change (site already has planning for restaurant and bar) and construction needs to be completed.
Retail stores like that are already well into planning for Christmas and will be taking long life stock in from July.

sceach16

Barry Crowe t/a Barry Johns Sausages loan 3200
Payment 27/36 due 4 April has not arrived. Others due today have.

garrettod

GypsyByName wrote: »

So I just took my first leap with LinkedFinance. Not really sure what I am at but just a minimal bid, probably do that monthly to see how it fares out.

Hi,

Welcome to the world of P2P.

Given you are new to this, can I suggest that you take a little time to read this thread, also others for other P2P websites such as Grid Finance, Flender, Mintos (GBP£ exposure here !) etc. You'll no doubt pick up a few tips from past discussions. You might also consider opening accounts with one or two other P2P websites, as that also helps spread your risk, gives you exposure to more potential borrowers etc.

Also, I would suggest that you initially stick to the approach you've taken, of only putting in small amounts, to each loan. Spread your risk across different borrowers, and different business sectors, so you are not overly exposed to one sector such as construction for example.

You might also want to initially stick to 1 year or perhaps 1 & 2 year loans, perhaps also only loans with better Linked Finance ratings (i.e. Grade A & , as while these pay lower interest rates, they are also a little less risky (well, that's the theory anyway )

Best of luck.

GypsyByName

So as I said the other day I have started to do a bit of speculating on Linked Finance. What is the situation with making a bid, loan then closing. What is the timeline that my bid will be accepted? Or is it possible that it wont?

garrettod

GypsyByName wrote: »

....What is the situation with making a bid, loan then closing. What is the timeline that my bid will be accepted? Or is it possible that it wont?

I'm not entirely sure I understand all of your question, but if you've cash in your LF account, you can bid on any live loan. The moment you submit the amount, if it's accepted, then your in. The bidding closes when the loan amount has been reached and everyone who has bid to that point, is in - subject to the borrower then completing the transaction and actually taking up the loan.

In practice, almost all borrowers seem to proceed with the loans once the funds are raised. Timelines vary, but they generally seem to progress quiet quickly (possibly a week, or maybe slightly more ?).

GypsyByName

garrettod wrote: »

I'm not entirely sure I understand all of your question, but if you've cash in your LF account, you can bid on any live loan. The moment you submit the amount, if it's accepted, then your in. The bidding closes when the loan amount has been reached and everyone who has bid to that point, is in - subject to the borrower then completing the transaction and actually taking up the loan.

In practice, almost all borrowers seem to proceed with the loans once the funds are raised. Timelines vary, but they generally seem to progress quiet quickly (possibly a week, or maybe slightly more ?).[/QUOTE

I bid €50. The status is "Live Bid". Bidding is now closed. I guess I am just waiting on the borrower to take up the loan.

sceach16

sceach16 wrote: »

Barry Crowe t/a Barry Johns Sausages loan 3200
Payment 27/36 due 4 April has not arrived. Others due today have.

Arrived today 9 April.

Cute Hoor

Hardly a day goes by now without a 'Dear John' email. The most disappointing element is not having a clue what is happening, I have a number of loans in 'Active Recovery' going back over 2 years, I haven't a clue what this means (apart from the obvious), how long will it take (2, 5, 10,?, years), what practical steps are being taken, LF have been less than helpful (and that is being generous) in providing answers.

I have another one where 1 repayment has been made on a 2 year loan, I suspect your man has legged it with the €20k, not good from a lending institution's point of view.

manafana

Cute Hoor wrote: »

Hardly a day goes by now without a 'Dear John' email. The most disappointing element is not having a clue what is happening, I have a number of loans in 'Active Recovery' going back over 2 years, I haven't a clue what this means (apart from the obvious), how long will it take (2, 5, 10,?, years), what practical steps are being taken, LF have been less than helpful (and that is being generous) in providing answers.

I have another one where 1 repayment has been made on a 2 year loan, I suspect your man has legged it with the €20k, not good from a lending institution's point of view.

out of interest which loan had just one repayment? thats insane

Cute Hoor

manafana wrote: »

out of interest which loan had just one repayment? thats insane

Ready Steady Build, a 20k loan to 'purchase equipment'.

garrettod

Cute Hoor wrote: »

....LF have been less than helpful (and that is being generous) in providing answers.....

Perhaps it's time that several of the lenders from here requested a joint meeting with LF to discuss how the arrears process is being managed, how arrears don't seem to get much coverage on the website (i.e. within the pie chart showing the categories of fund allocation) etc. ?

I see they've recently hired in a new credit guy, to replace their former head of credit. He may be open to some suggestions which could improve the current situation ?

at9qu5vp0wcix7

Has anybody ever lost money on LF? E.g. defaults being greater than interest etc

sceach16

Mila Calm Ax wrote: »

Has anybody ever lost money on LF? E.g. defaults being greater than interest etc

I have not. Unless someone picked a small number of loans very badly, it would be very difficult. Any well spread portfolio should return (say) 10% per annum.

Defaults on loans ( my estimate for me) are at about 5% of my overall portfolio by cash value rather than number of loans. I am 33 months on linked so am ahead.

My big problem with Linked now is the risk /reward balance. when most loans are below 10%, a net return below 5% means any default has a significant impact. I do not have confidence in Linked ratings......they will not stand over them and refuse to give detail on them.

garrettod

sceach16 wrote: »

....Any well spread portfolio should return (say) 10% per annum.

Where are you getting that figure from ?

IMHO, it should be higher, given the higher risk of default in SME lending compared to other categories of lending and thereafter, the fact that the only security that we get are PGs. I'd like to see it more in the 12%-15% range.

sceach16 wrote: »

....My big problem with Linked now is the risk /reward balance. when most loans are below 10%, a net return below 5% means any default has a significant impact. I do not have confidence in Linked ratings......they will not stand over them and refuse to give detail on them.

Agree 100% and have said as much here previously, and also to LF.

Unfortunately, more and more people are getting involved in lending on LF without fully understanding the risks, or how the LF autobid system is driven by their internal ratings (which I think are overly generous).

sceach16

garrettod wrote: »

Where are you getting that figure from ?

IMHO, it should be higher, given the higher risk of default in SME lending compared to other categories of lending and thereafter, the fact that the only security that we get are PGs. I'd like to see it more in the 12%-15% range.



Agree 100% and have said as much here previously, and also to LF.

Unfortunately, more and more people are getting involved in lending on LF without fully understanding the risks, or how the LF autobid system is driven by their internal ratings (which I think are overly generous).

Just picked 10% for illustration (Not a Target). I am not bidding currently so not following rates. Guessed it was a current representative average

GypsyByName

Anybody lent to Egoli Childcare? Dont think they have drawn down the loan yet. Its a week now at this stage.

manonboard

Cute Hoor wrote: »

Hardly a day goes by now without a 'Dear John' email. The most disappointing element is not having a clue what is happening, I have a number of loans in 'Active Recovery' going back over 2 years, I haven't a clue what this means (apart from the obvious), how long will it take (2, 5, 10,?, years), what practical steps are being taken, LF have been less than helpful (and that is being generous) in providing answers.

I have another one where 1 repayment has been made on a 2 year loan, I suspect your man has legged it with the €20k, not good from a lending institution's point of view.

Hello Cute Hoor.
I am surprised by the numbers you've shared over a few posts.

I'd like to ask you, what do you think caused the number of loans to be troublesome to be high in your case? eg: what decision making/behaviors on your part do you think the rest of us could learn from?

I have 46 loans. 1 defaulted, but after the principal was payed back so just a non interest earning loan.

I did most of my loans when we could pick our interest rate. The autobidding im now using on ABC loans.

Any advice you could pass on to us from your difficult loans?

CeilingFly

GypsyByName wrote: »

Anybody lent to Egoli Childcare? Dont think they have drawn down the loan yet. Its a week now at this stage.

6 days today

GypsyByName

CeilingFly wrote: »

6 days today

Is this the norm? Its my first time experimenting with P2P.

CeilingFly

GypsyByName wrote: »

Is this the norm? Its my first time experimenting with P2P.

yes - paperwork has to be completed, checked and signed off on.

benjamin d

GypsyByName wrote: »

Is this the norm? Its my first time experimenting with P2P.

They can take 2 weeks or longer, but that's rare. It's frustrating because your money is doing nothing for that time.

Cute Hoor

manonboard wrote: »

Hello Cute Hoor.
I am surprised by the numbers you've shared over a few posts.

I'd like to ask you, what do you think caused the number of loans to be troublesome to be high in your case? eg: what decision making/behaviors on your part do you think the rest of us could learn from?

I have 46 loans. 1 defaulted, but after the principal was payed back so just a non interest earning loan.

I did most of my loans when we could pick our interest rate. The autobidding im now using on ABC loans.

Any advice you could pass on to us from your difficult loans?

This is a difficult question you are asking me. I hope I haven't come across too negatively because overall I would be reasonably happy/comfortable with my loans. 25% of my loans have finished with all repayments made (even if a couple of repayments were late). There is only one loan that I have given up on, that's about 0.25% of the loans I have invested in, and I'd have no issue whatsoever about that one, the borrower finished up in a reasonably tough situation. 2% of my overall loans are challenged in LF terms (In Default or Late Repaying), I would probably expect it to be pretty close to that, and in financial terms of course it's well less than the 2%. These are mostly 3 year loans across a wide range of businesses and interest rates, so no particular pattern.

I am not overly comfortable with the autobid system, there are some that I find myself funding that I mighn't be funding if I was making some evaluation myself. So I am now only doing 12 month and some 24 month loans, I will have all my initial investment taken out by year end, so more than happy to continue on re-investing whatever I have left at that stage.

My biggest issue is probably the lack of clarity around LF's follow-up processes, providing timely updates, not understanding what some of their terminology (such as 'Active Recovery') means, and the unexplained (and imo unacceptable) delays in going after defaulting businesses who are still blatantly successfully trading. To be fair, somebody in LF must be reading this forum or else responding to lenders complaints because there has been a flood of updates over the last week or so but they still aren't addressing most of the issues I have.

So happy with the experience, but LF could do better imo.

garrettod

Cute Hoor wrote: »

.... somebody in LF must be reading this forum or else responding to lenders complaints because there has been a flood of updates over the last week or so but they still aren't addressing most of the issues I have.

I was only thinking the same thing myself quite recently.

However, the recent updates that I've seen on arrears have lacked any substance tbh.



If there is someone from LF reading this thread, then please go back and read the last dozen or so pages, taking note of such things as:

• the unease with the autobid system
• the concerns about the LF rating system
• the risk-v-reward for a lot of the loans being offered, the reward is often too low (probably because of overgenerous internal credit ratings, or a belief that the rates need to be on par with the Banks, despite the fact that security and credit quality may not be the same as what a Bank requires)
• the absence of any information about the parties providing the personal guarantees for the loans
• the absence of visibility around the accounts in arrears (such as on the Investment Overview pie chart)
• the absence of visible regular activity and updates on accounts in arrears
• other reasons why investors (aka "lenders") are favoring other P2P platforms over LF
  

.

Scottie99

To date I’ve 202 are repaying, 3 defaulted, 4 late (3 just this month have missed) and 44 finished.
I just wish they’d update the “missed” quicker on our online account (recorded as one ). The only reason I know is because they emailed me.

sceach16

Scottie99 wrote: »

To date I’ve 202 are repaying, 3 defaulted, 4 late (3 just this month have missed) and 44 finished.
I just wish they’d update the “missed” quicker on our online account (recorded as one ). The only reason I know is because they emailed me.

You are doing better than me ! Of 168 loans, 22 finished/repaid early, 11 defaulted, 4 more late and 131 repaying.

Scottie99

sceach16 wrote: »

You are doing better than me ! Of 168 loans, 22 finished/repaid early, 11 defaulted, 4 more late and 131 repaying.

Think I’m averaging around 10.7%, I’m not being particularly aggressive

manonboard

Scottie99 wrote: »

Think I’m averaging around 10.7%, I’m not being particularly aggressive

Interesting how we interpret aggressive so differently

I consider yours quite aggressive.

mine: