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Post by gravitykillz on Jul 19, 2019 8:40:52 GMT
I was just wondering what measures loanpad has taken to avoid the negative economic climate that may occur during or after brexit?
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Jul 19, 2019 9:09:06 GMT
I was just wondering what measures loanpad has taken to avoid the negative economic climate that may occur during or after brexit? Are Loanpad particularly vulnerable to brexit in some way (in comparison to other P2P platforms)?
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Post by gravitykillz on Jul 19, 2019 10:15:29 GMT
I was just wondering what measures loanpad has taken to avoid the negative economic climate that may occur during or after brexit? Are Loanpad particularly vulnerable to brexit in some way (in comparison to other P2P platforms)? All p2p firms are vulnerable to the possibilities of economic decline. House prices may fall further than expected p2p lenders may panic and start withdrawing,other p2p lenders may go into insolvency and cause further panic and withdrawals. I just want reassurance that p2p have at least made plans for a possible no deal brexit. I mean it's been almost 3 years since the vote.
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Post by Loanpad on Jul 19, 2019 11:45:05 GMT
Are Loanpad particularly vulnerable to brexit in some way (in comparison to other P2P platforms)? All p2p firms are vulnerable to the possibilities of economic decline. House prices may fall further than expected p2p lenders may panic and start withdrawing,other p2p lenders may go into insolvency and cause further panic and withdrawals. I just want reassurance that p2p have at least made plans for a possible no deal brexit. I mean it's been almost 3 years since the vote. Hi gravitykillzThanks for the question. We are of course very conscious of the impacts Brexit may have which is of course uncertain at this time. Going by the Bank of England worst case scenario, there could be a drop in house prices of 35%. Whilst we do not expect the worst case scenario to materialise, if it did we believe we are prepared for that – for a number of reasons. This includes factors such as the loans we advance are all below 50% loan to value, we use present day values on all lending decisions, we share loans with a lending partner that has seen through a number of recessions over the last 40 years and we diversify all investors daily to minimise the impact of any defaults should they occur. Loanpad was built with the aim of providing a stable income in any foreseeable economic climate. We cannot guarantee that of course and it is important that all risk factors are considered – the main ones are set out here www.loanpad.com/#risk-notice and elsewhere on our website.
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zlb
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Post by zlb on Jul 19, 2019 17:17:14 GMT
All p2p firms are vulnerable to the possibilities of economic decline. House prices may fall further than expected p2p lenders may panic and start withdrawing,other p2p lenders may go into insolvency and cause further panic and withdrawals. I just want reassurance that p2p have at least made plans for a possible no deal brexit. I mean it's been almost 3 years since the vote. Hi gravitykillzThanks for the question. We are of course very conscious of the impacts Brexit may have which is of course uncertain at this time. Going by the Bank of England worst case scenario, there could be a drop in house prices of 35%. Whilst we do not expect the worst case scenario to materialise, if it did we believe we are prepared for that – for a number of reasons. This includes factors such as the loans we advance are all below 50% loan to value, we use present day values on all lending decisions, we share loans with a lending partner that has seen through a number of recessions over the last 40 years and we diversify all investors daily to minimise the impact of any defaults should they occur. Loanpad was built with the aim of providing a stable income in any foreseeable economic climate. We cannot guarantee that of course and it is important that all risk factors are considered – the main ones are set out here www.loanpad.com/#risk-notice and elsewhere on our website. Thank you. How many defaults can your model handle before cracks start to appear, either in your institutional partner withdrawing, or your platform being unsustainable?
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Post by gravitykillz on Jul 19, 2019 18:08:20 GMT
Hi gravitykillzThanks for the question. We are of course very conscious of the impacts Brexit may have which is of course uncertain at this time. Going by the Bank of England worst case scenario, there could be a drop in house prices of 35%. Whilst we do not expect the worst case scenario to materialise, if it did we believe we are prepared for that – for a number of reasons. This includes factors such as the loans we advance are all below 50% loan to value, we use present day values on all lending decisions, we share loans with a lending partner that has seen through a number of recessions over the last 40 years and we diversify all investors daily to minimise the impact of any defaults should they occur. Loanpad was built with the aim of providing a stable income in any foreseeable economic climate. We cannot guarantee that of course and it is important that all risk factors are considered – the main ones are set out here www.loanpad.com/#risk-notice and elsewhere on our website. Thank you. How many defaults can your model handle before cracks start to appear, either in your institutional partner withdrawing, or your platform being unsustainable? Interesting question. I would feel more comfortable if they had a large provision fund to cover the instability of the first few months of a possible no deal brexit.
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Post by Loanpad on Jul 22, 2019 11:55:52 GMT
Hi gravitykillz Thanks for the question. We are of course very conscious of the impacts Brexit may have which is of course uncertain at this time. Going by the Bank of England worst case scenario, there could be a drop in house prices of 35%. Whilst we do not expect the worst case scenario to materialise, if it did we believe we are prepared for that – for a number of reasons. This includes factors such as the loans we advance are all below 50% loan to value, we use present day values on all lending decisions, we share loans with a lending partner that has seen through a number of recessions over the last 40 years and we diversify all investors daily to minimise the impact of any defaults should they occur. Loanpad was built with the aim of providing a stable income in any foreseeable economic climate. We cannot guarantee that of course and it is important that all risk factors are considered – the main ones are set out here www.loanpad.com/#risk-notice and elsewhere on our website. Thank you. How many defaults can your model handle before cracks start to appear, either in your institutional partner withdrawing, or your platform being unsustainable? Hi zlb we can’t speculate over what level of defaults/losses would make our product unsustainable or unattractive as it is very subjective, we can simply do our best to maintain zero losses.
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Post by Loanpad on Jul 22, 2019 12:03:11 GMT
Thank you. How many defaults can your model handle before cracks start to appear, either in your institutional partner withdrawing, or your platform being unsustainable? Interesting question. I would feel more comfortable if they had a large provision fund to cover the instability of the first few months of a possible no deal brexit. Hi gravitykillz we do not operate a provision fund for a number of reasons. There is an article about this which you can see here blog.loanpad.com/protecting-investors/ The loans on the platform currently amount to ~ £10m, of which Loanpad investors have funded ~ £3m (on a priority/senior basis), and the lending partner has funded over £7m (on a first loss/junior basis). This is similar to having a PF covering 70% of the loanbook, although this is an average and differs loan by loan. In the longer term we anticipate this will reduce to ~ 50%. Additionally, unlike a PF this protection isn’t discretionary or potentially at risk if the platform fails.
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