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Post by nickrebuildings on Jun 11, 2014 15:16:36 GMT
Hi All,
May was a busy month for us and businesses keep applying for our loans, so I'm posting this up here in order to attract the attention of lenders that are looking to try different platforms to help us meet their demand - of course you can earn market-leading returns for your commitment.
rebuildingsociety is a specialist SME platform that was set up to supply growing businesses with capital and we're doing well - nearly 60 loans done, nearly £3m advanced and all from a standing start (so no commercial property portfolios suddenly made available for retail investors). Our lending criteria is similar to Funding Circle and we're confident our default rates will remain low (between 0.5-3.9%). Crucially, on our platform you are afforded time to undertake proper due diligence and ask questions of the borrower before the loan request fills, which sits really well with some lenders.
Our average gross annual return (all money lent to all businesses) is touching 16%, with 60% of those loans secured. The remaining 40% are on personal guarantees - and they're all loans for less than £50k.
We're running an incentive for new lenders which entitles them to 0.5% cashback on their first £10k invested, so it's a good time to try us out. If you already use us and can refer others, we'll reward you for it too - when they lend £1,000 we'll give you £50 credit.
Regards,
Nick
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Post by jackpease on Jun 12, 2014 6:16:29 GMT
Some previous loans have not got off the ground so would the £50 come on £1000 bid or £1000 bid and £1000 accepted??? If the latter one might need to substantially overshoot to ensure hitting the £1000 thx Jack P
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is
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Post by is on Jun 12, 2014 10:41:04 GMT
I would have been happy to participate substantially (six/seven figures) but have some issues with your market structure:
- the 0.5% sale charge is too high. Abolishing it entirely, like Assetz, would be a major incentive. - you do not take account of accrued interest at sale, meaning daily re-marking of sale prices would be needed - not practical. - plus/minus 5% markup may not be sufficient for high yield loans trading
Liquidity is important to me and I am sure many other higher volume investors, and above points reduce it substantially.
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bg
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Post by bg on Jun 12, 2014 13:18:06 GMT
Got to agree with is above. I would be keen to invest but the fee for selling completely puts me off. For a fledgling site it is too risky to see your capital tied up with no real means to liquidate it.
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Post by xordon on Jun 13, 2014 10:42:59 GMT
For this £315K loan I am a bit surprised to see that not all of the existing lenders have chosen to transfer into this new loan. There should be about £75K of possible transfer funds available to this loan. Perhaps existing lenders require another email poke to let them know about the no risk no loss transfer option. If you opt to transfer your money keeps earning in the existing loan until the new one takes over or stays where it is if new one fails to fill.
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wysiati
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Post by wysiati on Jun 13, 2014 12:59:47 GMT
Got to agree with is above. I would be keen to invest but the fee for selling completely puts me off. For a fledgling site it is too risky to see your capital tied up with no real means to liquidate it. You are trying to conflate separate issues. Reducing a % seller fee is not going to ensure that there are sufficient willing buyers to scoop up whatever loan parts you wish to dump.
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wysiati
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Post by wysiati on Jun 13, 2014 13:07:13 GMT
To add to the above - the increase in the bidding decrement which was 0.10% and is now 1%, hasn't helped either. When the regular bidder/underwriter, who will remain unnamed, comes in and fills the loan at the headline rate, then dumps all their microloans on the Secondary Market at a premium, your only choice to remain in the auction is to bid at 1% less, which leaves investors with little or no option to liquidate their own debt obligation, unless they sell at par, close to par or at a discount, less a 0.50% fee for the privilege. This is arguably far more of a deterrent to many potential (larger) participants than the current % seller fee but the platform appears unwilling to change - is this because it remains so dependent upon a couple of key lenders/flippers who benefit disproportionately from the structure adopted?
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bg
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Post by bg on Jun 13, 2014 14:29:03 GMT
Got to agree with is above. I would be keen to invest but the fee for selling completely puts me off. For a fledgling site it is too risky to see your capital tied up with no real means to liquidate it. You are trying to conflate separate issues. Reducing a % seller fee is not going to ensure that there are sufficient willing buyers to scoop up whatever loan parts you wish to dump. I'm not at all. I didn't say it would ensure anything but I would say taxing something too highly guarantees people won't use it. Is the same reason I haven't invested in TC.
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wysiati
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Post by wysiati on Jun 13, 2014 15:07:19 GMT
You are trying to conflate separate issues. Reducing a % seller fee is not going to ensure that there are sufficient willing buyers to scoop up whatever loan parts you wish to dump. I'm not at all. I didn't say it would ensure anything but I would say taxing something too highly guarantees people won't use it. Is the same reason I haven't invested in TC. You would need to be selling a (single) loan part of >£15k to be better off on TC vs. Rebs in terms of £ seller fees. Many platforms such as Zopa, Ratesetter, FK charge higher % seller/exit fees/penalties so any argument that the Rebs % loan part sale fees are disproportionate to the extent that they are the swing factor for participation would seem somewhat exaggerated. The issue highlighted again by MONEY would appear rather more important in the scheme of things as it supports a framework which is liable to make it much harder for most Rebs users to exit from a position before even thinking about the ability to cover one's costs or even make a net gain on the sale. If you do not have loan parts at the top rate from a given auction and there is a huge block of loan parts starting at a 1% yield advantage then what good is reducing the seller fee from 0.5% to 0% for all participants going to do for your exit plans - not a lot.
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bg
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Post by bg on Jun 13, 2014 15:22:53 GMT
It's not an exaggeration, it's a fact. I will not be investing in Rebs or TC while the current charges apply. I am happy sticking with AC, SS (which have zero fees) and FC which has 25bp. I'm sure the other points are good issues but it's not something even going to consider while the fees apply. If the fees are removed then I will consider the platform.
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wysiati
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Post by wysiati on Jun 13, 2014 17:07:58 GMT
It's not an exaggeration, it's a fact. I will not be investing in Rebs or TC while the current charges apply. I am happy sticking with AC, SS (which have zero fees) and FC which has 25bp. I'm sure the other points are good issues but it's not something even going to consider while the fees apply. If the fees are removed then I will consider the platform. Well on FC you are paying a 1% pa administration fee (which does not apply on Rebs) so unless you are just constantly flipping this would be outweighing the 25bp lower loan part sale fee on FC vs. Rebs, so your actions undermine your own point about fees.
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markr
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Post by markr on Jun 13, 2014 20:20:44 GMT
Another thing to consider is that the rates available at ReBS are currently several percent higher than FC, so not investing on the grounds that they charge higher exit fees seems to be cutting your nose off to spite your face, unless you believe the risk is considerably higher at ReBS than FC (which would be a different argument). And anyone might as well stick £10k in at the moment, since getting it out again would cost nothing except giving them their cashback back (assuming they address MONEY's point about miscalculation).
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Post by nickrebuildings on Jun 20, 2014 11:45:06 GMT
Hi MONEY - we're applying a fix today that will retrospectively correct any discrepancies in lender incentives. A few loans with incentives could not be processed previously. is - thanks for your feedback. We've discussed your points and plan to implement accrued interest in the future, we recognise that it is easier to calculate your position. The mark-up might be prohibitive at some stage, but at the moment those lenders that want to exit a position generally can. It is an open market and there are not many loans traded with a 5% premium as it presents poor value to buyers. bg - we do need a lender fee of some sort to contribute towards costs, so we decided to go with this rather than a flat management fee of 1%. That way, lenders can control the amount they pay in fees by the amount of secondary market trading they are doing. In combination with a +/- 5% premium, we felt there was ample scope to mitigate the cost of a sale. The average premium commanded is between 2-2.5%, so people are not losing money here. MONEY - we would like to be in a position where we can reinstate the 0.10% increment, but we need a greater volume of lenders first. If we tried it now, all our loans would be 13.99%, 16.99% and 19.99%! To maintain a supply of borrowers we must be able to demonstrate that the most popular loans are funded at lower rates (which they generally are) through competitive bidding. Thanks everyone for their input here - we're watching and trying to take your feedback on board. We'll never please everyone, but if it makes sense to lenders, borrowers and us, we'll make changes. Nick
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Post by nickrebuildings on Jun 25, 2014 10:22:44 GMT
MONEY I think there are a couple of aspects of our marketplace where conceptions are misplaced, liquidity being one of them. If someone tries to place a lot of loans on the market at 5%, they are likely to be undercut or left unsold - even at 1% point down on the primary market, you can still command a 3.75% premium on the secondary market because you'll be better value. That's better than anywhere else in the p2p market. I know sales at par or discounts are very rare, so I don't think many people lose money through this process. If you look at the volumes for sale on the secondary market you can see it is generally fractions of the original loan amount. I personally believe a lot of people invest for the term, rather than for flipping purposes. Which might explain the popularity of loans with smaller terms (24, 36 months etc). We would rather see competitive bidding than reduce the % ceilings - as you say some loans are perceived to be better quality than others even within the same risk rating, so it makes sense to let the crowd decide the rate and this way people will lend according to the risk they see, not just at the top rate. We've always wanted to play a minimal role in this aspect, which is why we have never done a fixed rate auction. Saying all this, when we start to see the vast majority of loans reaching 100% before the end of their initial auction periods, it will be time for the 0.10% increment to be introduced. We want to make it as easy as possible to lend and divest, but it's a tough sell to potential borrowers if we can't demonstrate a level of competition and the possibility of a lower rate for good businesses. We've been encouraged by the recent performance of a couple of loans, so it's likely to be discussed in the next month.
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shimself
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Post by shimself on Nov 19, 2014 19:45:45 GMT
re accrued interest when selling microloans - will this happen and especially will it happen for the TCAU version?
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