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Post by connectivelending on Mar 24, 2021 20:54:56 GMT
Dear All, We are not actively marketing for new investors while we are in the beta testing phase hence a slower rate of loans being filled. We thank you for your patience while we iron out some coding issues such as the bid restriction issue and we do take on your comments and we are using them to improve our platform. When we use the phrase underwritten it does mean that in the event of default, or maybe no sale at an auction, then the asset will be sold for capital and interest, at a minimum, to another company owned by a director. This can be relied upon. Daniel Grimes understands that you, the investors, are interested in capital and interest paid in a timely manner whereas he is used to owning assets and waiting for maturity and a length of time to achieve a sale. This is his business model and has been for many years. Thank you very much once again and hopefully we can become a better and easier to use platform in the coming months. We have some good work in the pipeline to help make this happen. Kind regards Connective Lending Thanks for maintaining a dialogue here, connectivelending - platform participation is always appreciated. With regard to this - and particularly this part of it - could I float a hypothetical situation by you, pls? If a borrower defaults and the loan goes to auction and sells for below the level required to cover fees associated with the auction plus lender capital plus lender interest, would Connective Lending make up the difference? Forgive the pedantic nature of my approach but, in my opinion, there should be no room for the word "maybe" in formal communications to lenders. This should be a case of: 'If the loan is deemed to be Underwritten then, in the event of default, Connective Lending will return all Capital and Interest to Lenders within XX days of the loan's term date.' No 'ifs, buts or maybes' just a statement of fact in which investors can be confident and by which Connective Lending can be measured. By introducing a 'maybe' Connective Lending's position on Underwritten loans becomes subjective. For example, it might be tempting to keep listing at auction (incurring increased fees) until it does sell. Cynical conspiracy theorists might even conject that, in the absence of a commitment to make good on any shortfall, it would be in the interests of the " company owned by a director" to monitor the auction, place the winning bid and potentially save a few quid by buying it on the cheap! Hi iRobot , Danny here. I got nudged to come on and answer your question . Great question and an important one. Forgive my direct and probably verbose language. What we, and I, mean is as follows : we would not sell an item at auction for less than it's bottom estimate when we know it is worth that amount, or more, if given time to find the right buyer/road to a sensible sale. We have to treat the borrower fairly so in some cases the distance approach of selling in an auction is good practice however if it does not sell at that auction one of my companies, that deals in these items, will then step in and buy the asset for the capital and interest accrued to that point. I am more than happy to wait for a sale and not sell something too cheaply, and in doing so allowing the borrower and investors to both be released from obligation and receive their yield. There will not be underwrites available on all loans because if an item is not within my expertise then we will look to auction and trade sales. So to answer the question there will not be auction after auction on underwritten loans to drive down yield. There will be one auction and if the item does not sell we will buy and keep for a better day. I am confident on all valuations that we underwrite. A good example is a certain diamond ring which was funded recently. The bottom auction estimate is typically low for a stone that even at the cheapest online diamond dealer is at least double the low auction estimate. Bluenile.com. My companies would be able to sell that, given time, for at least £15000 so we are more than happy to offer to buy for a figure that is more than the capital and interest owed but less than the low estimate. These items do not sell all day everyday so any experienced dealer knows it could be months before the right person comes along and when that happens they get a good deal and we make a profit. Apologies for the long reply. Thank you Danny Grimes
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Post by df on Mar 26, 2021 19:49:39 GMT
Interest on Coins loan has increased.
"On Tuesday we launched our gold Britannia Coins loan which has now been fully funded. The loan is 1 of 2 loans with the second loan launching for funding shortly. In anticipation that the next loan will be at a higher interest rate, we wish to ensure lenders who have funded the current gold Britannia coins are fairly treated..."
'A' 8.0% to 10.0% 'B' 11.0% to 12.0% 'C' 13.0% to 14.0%
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nyneil
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Post by nyneil on Mar 30, 2021 10:51:16 GMT
connectivelending I know the latest gold coin offering is underwritten, which makes the question academic, but it looks like the total repayable (loan + charges) exceeds the value of the asset. Value = 9920; loan = 8500; charges = 1530; total repayable =10,030. Isn't this 101% LTV, rather than 85%?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 30, 2021 11:27:12 GMT
connectivelending I know the latest gold coin offering is underwritten, which makes the question academic, but it looks like the total repayable (loan + charges) exceeds the value of the asset. Value = 9920; loan = 8500; charges = 1530; total repayable =10,030. Isn't this 101% LTV, rather than 85%? No, because LTV doesnt take into account the cost of servicing the loan unless the interest is advanced as part of the loan (ala Lendy) which it isnt. Bit cheeky they dont highlight that the repayment exceeds the valuation. The last one was only £10 less than the valuation as well. Worth bearing in mind that for lenders to recover what is due to them is within the valuation, 8500 + 470 interest is £8970 so 90%, so 10% (£950) to cover anything CL are entitled to ahead of lenders
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jonno
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nil satis nisi optimum
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Post by jonno on Mar 30, 2021 12:14:13 GMT
Just thinking out loud (dangerous, I know), but if a loan is underwritten as per above, what's the point of offering different "risk based" tranches and why wouldn't everybody want the highest return?
I'm sure someone will shoot me down so go ahead (unless it's just about platform "trust"?)
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nyneil
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Post by nyneil on Mar 30, 2021 13:00:40 GMT
Just thinking out loud (dangerous, I know), but if a loan is underwritten as per above, what's the point of offering different "risk based" tranches and why wouldn't everybody want the highest return? I'm sure someone will shoot me down so go ahead (unless it's just about platform "trust"?) IMO it's just an early marketing strategy to get the ball rolling. I wouldn't be surprised if someone 'close' to CL, actually owns the coins - could be wrong, of course. The platform is really at pilot stage, so it could all be a bit of 'testing' strategy, to help iron out the wrinkles before a bigger push to new investors.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 30, 2021 15:06:12 GMT
Not hanging around this time. Amazing what rate bump does.
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toffeeboy
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Post by toffeeboy on Mar 30, 2021 15:22:00 GMT
Well that limit was ridiculous, I was slightly late to the party. I got on three after the investment opened and all of tranches A and B were gone. Someone was able to take almost 12% of the loan with a time stamp of 15:59 so before investment was supposed to open. This could potentially have been all of tranche C so not sure what the point of the 24 hour limit is. The whole loan could be taken by 9 people, I know that they are low on lenders at the moment but can connectivelending please explain to me the point of your lending limits.
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Post by connectivelending on Mar 30, 2021 16:20:53 GMT
Just thinking out loud (dangerous, I know), but if a loan is underwritten as per above, what's the point of offering different "risk based" tranches and why wouldn't everybody want the highest return? I'm sure someone will shoot me down so go ahead (unless it's just about platform "trust"?) IMO it's just an early marketing strategy to get the ball rolling. I wouldn't be surprised if someone 'close' to CL, actually owns the coins - could be wrong, of course. The platform is really at pilot stage, so it could all be a bit of 'testing' strategy, to help iron out the wrinkles before a bigger push to new investors. Dear jonno and nyneil , We realise that with underwritten loans there is less risk to lenders however our tranche approach is to allow lenders to choose their suitable risk appetite. Even where underwriting is provided a lender may still desire a lower tranche ltv as part of a de-risk investment portfolio. Our multiple tranche option provides lenders the flexibility to participate in the same loan with others but at a risk level to suit them which single tranches don't offer. All of our borrowers are genuine borrowers. With our experience in asset value and disposal we intend to offer underwriting where possible. It is a marketing policy, you could say, though it is borne from the desire to build trust in our decision making and in the fact that the asset is genuinely underwritten for capital and interest. A previous poster did the maths so to agree the platform has the equity to absorb a lower disposal value which could be viewed as a cost of marketing. Kind regards Connective Lending
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Post by Badly Drawn Stickman on Mar 30, 2021 17:51:34 GMT
Well that limit was ridiculous, I was slightly late to the party. I got on three after the investment opened and all of tranches A and B were gone. Someone was able to take almost 12% of the loan with a time stamp of 15:59 so before investment was supposed to open. This could potentially have been all of tranche C so not sure what the point of the 24 hour limit is. The whole loan could be taken by 9 people, I know that they are low on lenders at the moment but can connectivelending please explain to me the point of your lending limits. I managed to get what I intended to get (well below the limit) despite it seeming to be 'shooting fish in a barrel', mainly because I see it as a long game (in a variety of ways). However..... Clearly sensible bid limits need to be something connectivelending give a bit of thought to, I accept it is always a fine balance but suspect I am not alone in having no desire to have crazed bidding sessions at set time of day. I would think these early days are a good time to try and get the model right going forward. I have not analysed the bidding but a quick glance shows a good few maximums so presumably unless there are only nine investors currently some will be unhappy.
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Greenwood2
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Post by Greenwood2 on Mar 30, 2021 19:30:36 GMT
Well that limit was ridiculous, I was slightly late to the party. I got on three after the investment opened and all of tranches A and B were gone. Someone was able to take almost 12% of the loan with a time stamp of 15:59 so before investment was supposed to open. This could potentially have been all of tranche C so not sure what the point of the 24 hour limit is. The whole loan could be taken by 9 people, I know that they are low on lenders at the moment but can connectivelending please explain to me the point of your lending limits. I managed to get what I intended to get (well below the limit) despite it seeming to be 'shooting fish in a barrel', mainly because I see it as a long game (in a variety of ways). However..... Clearly sensible bid limits need to be something connectivelending give a bit of thought to, I accept it is always a fine balance but suspect I am not alone in having no desire to have crazed bidding sessions at set time of day. I would think these early days are a good time to try and get the model right going forward. I have not analysed the bidding but a quick glance shows a good few maximums so presumably unless there are only nine investors currently some will be unhappy. Didn't get any emails so no idea what happened. I guess I missed out!
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Post by Ace on Mar 30, 2021 19:34:54 GMT
I managed to get what I intended to get (well below the limit) despite it seeming to be 'shooting fish in a barrel', mainly because I see it as a long game (in a variety of ways). However..... Clearly sensible bid limits need to be something connectivelending give a bit of thought to, I accept it is always a fine balance but suspect I am not alone in having no desire to have crazed bidding sessions at set time of day. I would think these early days are a good time to try and get the model right going forward. I have not analysed the bidding but a quick glance shows a good few maximums so presumably unless there are only nine investors currently some will be unhappy. Didn't get any emails so no idea what happened. I guess I missed out! There's still some tranche A available.
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Greenwood2
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Post by Greenwood2 on Mar 30, 2021 19:38:59 GMT
Didn't get any emails so no idea what happened. I guess I missed out! There's still some tranche A available. But is it worth transferring funds now? Can't be bothered to risk transferring and it's all gone.
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Post by Badly Drawn Stickman on Mar 30, 2021 20:13:36 GMT
Didn't get any emails so no idea what happened. I guess I missed out! There's still some tranche A available. So there is, I based my assumption it was fully filled on others posts. Teach me believe what I read on a forum and not check myself.
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Post by df on Mar 30, 2021 21:03:40 GMT
Well that limit was ridiculous, I was slightly late to the party. I got on three after the investment opened and all of tranches A and B were gone.
Someone was able to take almost 12% of the loan with a time stamp of 15:59 so before investment was supposed to open. This could potentially have been all of tranche C so not sure what the point of the 24 hour limit is. The whole loan could be taken by 9 people, I know that they are low on lenders at the moment but can connectivelending please explain to me the point of your lending limits. The limit could be based on assumption that most investors already had what they wanted from this borrower in previous loan. I didn't go for it for this very reason, but was surprised it was filling so quick. I think it's ok to play with limits and learn from it at soft launch stage.
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