spyrogyra
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Post by spyrogyra on Oct 5, 2015 16:47:03 GMT
Has anyone noticed that lately many A an even A+ loans deserve to be classed more like C or even D category? Take the latest example 16268 - low rating throughout the year, barely 4k profit and only 6K in assets ! I got more unencumbered assets in my garage!
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blender
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Post by blender on Oct 5, 2015 17:17:52 GMT
Curious. What puzzles me is a business that has been trading for 39 years in IT and Telecomms (1976?), gets into profit in 2014/15 after a loss, ending the year with £12 in cash (yes twelve pounds), and with a credit score of about 15. More like E than A+.
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Post by ratrace on Oct 5, 2015 17:44:23 GMT
Curious. What puzzles me is a business that has been trading for 39 years in IT and Telecomms (1976?), gets into profit in 2014/15 after a loss, ending the year with £12 in cash (yes twelve pounds), and with a credit score of about 15. More like E than A. This is of the reasons why l do most of my fishing in the D and E bands. lf am going to take on risk, then l want to make sure am getting a rate that reflects that risk. By the way some of the companies in the D band look to me like there good enough to be in B and even in the A band.
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registerme
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Post by registerme on Oct 5, 2015 18:01:09 GMT
One problem with this banding discussion is that we get no sight of the value, or weight assigned to that value, that FC place on any personal guarantee.
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spyrogyra
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Post by spyrogyra on Oct 5, 2015 18:29:17 GMT
And most of the business profiles are limited to few sentences, sometimes in one sentence only. Who is the one who advise them to present themselves in such an appalling way? Imagine a company submitting a loan application at the bank with a presentation consisting of few words only. Plus financial records 8-10 months old.
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Post by GSV3MIaC on Oct 5, 2015 18:38:20 GMT
Ah but banks lend their own money, at their own risk (give or take the odd bailout, and a few shareholders), whereas Feeling Cheerful are happy to lend ours.
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am
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Post by am on Oct 5, 2015 20:47:22 GMT
And most of the business profiles are limited to few sentences, sometimes in one sentence only. Who is the one who advise them to present themselves in such an appalling way? Imagine a company submitting a loan application at the bank with a presentation consisting of few words only. Plus financial records 8-10 months old. There are a number of reasons why I'm more concerned about avoiding defaults than avoiding losses. 1) Loan defaults are stressful events for retail lenders. (I've managed not to take the £30 of losses, and no recoveries as yet, hard, but we've all seen lenders get irate or despondent on the subject here and on the official forum. £300 and I might not be so sanguine.) 2) There's no liquidity in defaulted loans - you can't even get the money out on a hefty premium. 3) I don't particularly want to be in the position, even indirectly, of forcing someone out of their home, or to declare bankruptcy. So all in all, the question I ask is not whether I can squeeze my money out of the guarantor, but whether the business is capable of servicing the loan.
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adrianc
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Post by adrianc on Oct 5, 2015 21:39:13 GMT
One problem with this banding discussion is that we get no sight of the value, or weight assigned to that value, that FC place on any personal guarantee. <hollow laughter> Comment received today on defaulted 6670... "We advise lenders that we have made several attempts to contact the guarantors on this loan since we issued our demand. One of the guarantors has responded to say that she is seeking independent advice on her financial affairs and intends to respond thereafter. No response has been received from the other 2 guarantors. Accordingly, our demand letters issued to guarantors advise the guarantor that the letter is also a letter before action and provide for a response within 21 days, which will lapse on 19 October 2015. After this time and in the absence of any communication from the guarantors, we intend to commence recovery proceedings." PGuarantors seem not to be overly worried about actually living up to their word. Is the Friendly Contract sadly lacking, or what?
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adrianc
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Post by adrianc on Oct 5, 2015 21:40:03 GMT
And most of the business profiles are limited to few sentences, sometimes in one sentence only. Who is the one who advise them to present themselves in such an appalling way? Imagine a company submitting a loan application at the bank with a presentation consisting of few words only. Plus financial records 8-10 months old. Of course they wouldn't - because they wouldn't receive any money. Whereas...
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registerme
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Post by registerme on Oct 5, 2015 21:57:21 GMT
One problem with this banding discussion is that we get no sight of the value, or weight assigned to that value, that FC place on any personal guarantee. <hollow laughter> Comment received today on defaulted 6670... "We advise lenders that we have made several attempts to contact the guarantors on this loan since we issued our demand. One of the guarantors has responded to say that she is seeking independent advice on her financial affairs and intends to respond thereafter. No response has been received from the other 2 guarantors. Accordingly, our demand letters issued to guarantors advise the guarantor that the letter is also a letter before action and provide for a response within 21 days, which will lapse on 19 October 2015. After this time and in the absence of any communication from the guarantors, we intend to commence recovery proceedings." PGuarantors seem not to be overly worried about actually living up to their word. Is the Friendly Contract sadly lacking, or what? No argument adrianc, just commenting on the fact that FC have, on at least one occasion that I am aware of, stated that the quality of the "personal guarantee is a factor in the risk rating" (I may be paraphrasing here). And we don't ever get sight of what makes the PG.......
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arbster
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Post by arbster on Oct 9, 2015 6:51:45 GMT
16341 must have set the record for the slowest £20K A+ to fill, ever. Still 6% to go after 18 hours.
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arbster
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Post by arbster on Oct 9, 2015 8:43:43 GMT
I'll also lay money on 16387 being a rejected WL.
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SteveT
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Post by SteveT on Oct 9, 2015 8:51:49 GMT
I'll also lay money on 16387 being a rejected WL. Little doubt of that given the mid-morning launch and the distinctly whiffy financials.
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adrianc
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Post by adrianc on Oct 9, 2015 9:00:42 GMT
FC have, on at least one occasion that I am aware of, stated that the quality of the "personal guarantee is a factor in the risk rating" (I may be paraphrasing here). And we don't ever get sight of what makes the PG....... This one'll make you chuckle... 49% shareholder, married to the other 51%, is now - apparently - a "non-involved director", so the PG is invalid...  .
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blender
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Post by blender on Oct 9, 2015 9:02:53 GMT
I'll also lay money on 16387 being a rejected WL. How can that be an A risk? Expansion and growth - by which they mean a chance of recovery. In the last filed accounts all the assets were debtors (rather like my FC account), but in the management accounts it looks like debts written off hitting profits and negative net worth. Only Autobid would want it as an A.
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