Financial hook ups.

keep going · 07-07-2014 08:15AM #1

Those of you with money to invest know about the poor returns available with institutions at the monment while banks are increasing their margin on borrowings to rebuild their balance sheets.so why cant people with money and people who need to borrow hook up directly at say 3 per cent andtake security on assets.

Milked out · 07-07-2014 08:19AM

There is something like that crowd funding I think It's called, but they require a return greater than 3%. To be honest it could get very messy the regulator has already come out cautioning on the crowd funding thing afaik

Username John · 07-07-2014 09:06AM

keep going wrote: »

Those of you with money to invest know about the poor returns available with institutions at the monment while banks are increasing their margin on borrowings to rebuild their balance sheets.so why cant people with money and people who need to borrow hook up directly at say 3 per cent andtake security on assets.

Wouldn't see how it would work practically? You'd want a lot more than 3% return.

Imagine if you put in 10k, after a year, you would only get 300 euro return.
And I question the security on assets - lets say someone has a bad year, and they say "can I push the loan out til next year" But you want the 10k back this year - what do you do now? If it goes to law, your 10k wont go far...

I would say if you had money to spend, invest / gamble it on stock, or whatever. But trying to get into the same business as banks, seems like a bad idea to me...

But then, maybe I just don't see the potential

Mad4simmental · 07-07-2014 09:20AM

You can get 2 or 3% in a savings account so whi risk loaning it out to perhaps never see it agen and wind up being the bad guy?

lakill Farm · 07-07-2014 10:05AM

setting an idea up for a few weeks time.

company wants to borrow €35k, by selling 100 shares of €350 each. For the €350 you will get

1 share and you can sell on or gift and will receive 7.5% interest per year. the option is also there to sell it back to the company also for €350

share is secured on a building

Username John · 07-07-2014 10:15AM

lakill Farm wrote: »

setting an idea up for a few weeks time.

company wants to borrow €35k, by selling 100 shares of €350 each. For the €350 you will get

1 share and you can sell on or gift and will receive 7.5% interest per year. the option is also there to sell it back to the company also for €350

share is secured on a building

If it all goes very badly, I assume the investment is gone? (Its not like you are a creditor is it?)

lakill Farm · 07-07-2014 10:19AM

Username John wrote: »

If it all goes very badly, I assume the investment is gone? (Its not like you are a creditor is it?)

the building is there and directors are guaranteeing the investment of €350 per share. so no the investment isnt gone

bogman_bass · 07-07-2014 12:21PM

Mad4simmental wrote: »

You can get 2 or 3% in a savings account so whi risk loaning it out to perhaps never see it agen and wind up being the bad guy?

not these days you wont!

Mad4simmental · 07-07-2014 12:41PM

bogman_bass wrote: »

not these days you wont!

Forget about the "bricks & morter" banks you can freely get that on internet banks. You don't haveto bank in Ireland anymore. I have mony left in Austraila getting %4.2

Oldtree · 07-07-2014 12:46PM

Mad4simmental wrote: »

Forget about the "bricks & morter" banks you can freely get that on internet banks. You don't haveto bank in Ireland anymore. I have mony left in Austraila getting %4.2

Is it in a bank there? Can you give any details please?

Username John · 07-07-2014 12:49PM

Mad4simmental wrote: »

Forget about the "bricks & morter" banks you can freely get that on internet banks. You don't haveto bank in Ireland anymore. I have mony left in Austraila getting %4.2

But are you not playing the currency markets then as well?

Or is it banked in euros, in Australia?

lakill Farm · 07-07-2014 12:54PM

dont forget money earned abroad is subject to irish income tax

Mad4simmental · 07-07-2014 12:59PM

Oldtree wrote: »

Is it in a bank there? Can you give any details please?

Yes, I am with ANZ myself. you can pitch them agents one another and fight for a better deal. Exchange charges have got very good the last few years with company's like courrency fair.

http://m.mozo.com.au/#sa-product-home

http://www.infochoice.com.au/banking/savings-account/online-savings.aspx

Many variables with different accounts as to how much you may have to put into an account per month or how long you can let money sit there. I'm far from an expert in this field but there are far better deals to be got than using the usual AIB & BOI.

Another very good reputable bank,

http://mozo.com.au/savings-accounts/information/p-n-bank/Hi-Saver/4003

Oldtree · 07-07-2014 01:07PM

lakill Farm wrote: »

setting an idea up for a few weeks time.

company wants to borrow €35k, by selling 100 shares of €350 each. For the €350 you will get

1 share and you can sell on or gift and will receive 7.5% interest per year. the option is also there to sell it back to the company also for €350

share is secured on a building

lakill Farm wrote: »

dont forget money earned abroad is subject to irish income tax

As is gross income on shares here, at the higher rate of tax.

Oldtree · 07-07-2014 01:12PM

lakill Farm wrote: »

setting an idea up for a few weeks time.

company wants to borrow €35k, by selling 100 shares of €350 each. For the €350 you will get

1 share and you can sell on or gift and will receive 7.5% interest per year. the option is also there to sell it back to the company also for €350

share is secured on a building

That seems like a high rate of return in the current climate. Is the company unable to borrow money from the bank?

Oldtree · 07-07-2014 01:13PM

lakill Farm wrote: »

the building is there and directors are guaranteeing the investment of €350 per share. so no the investment isnt gone

What if they go bankrupt?

Mad4simmental · 07-07-2014 01:34PM

Username John wrote: »

But are you not playing the currency markets then as well?

Or is it banked in euros, in Australia?

You are playing the currency markets too, but to be honist the euro is as low as ever and is only going to go up IMO. The OZ doller is very strong and is driven by resorses such as iron ore that is being sold for the lowest prices in years.

Befoure the Big Bang a few years ago you would get around $0.85 for one euro.

After the bang it dipped to around $0.62 for your euro.

It now sits around $0.68 for your euro. I think this will pann out to around $0.72 as a good avrege to what the oz doller is worth. In other words the ozzy doller is currently undervalued.

lakill Farm · 07-07-2014 02:10PM

Oldtree wrote: »

What if they go bankrupt?

its test driving future ideas. Directors have invested more than the shareholders.

the investment is in the company and current book value on fixed project is €130k so company could be liquadated and shareholders would not loss out .

Its high percentage however no point investing money at 0.01% like banks
3 banks have offered in excess of €50k each to the company so funding is freely available

Oldtree · 07-07-2014 02:16PM

lakill Farm wrote: »

its test driving future ideas. Directors have invested more than the shareholders.

the investment is in the company and current book value on fixed project is €130k so company could be liquadated and shareholders would not loss out .

Its high percentage however no point investing money at 0.01% like banks
3 banks have offered in excess of €50k each to the company so funding is freely available

Out of interest what % were they offered from the banks?

keep going · 07-07-2014 02:22PM

Mad4simmental wrote: »

You can get 2 or 3% in a savings account so whi risk loaning it out to perhaps never see it agen and wind up being the bad guy?

Where

Mad4simmental · 07-07-2014 02:40PM

keep going wrote: »

Where

See above.

lakill Farm · 07-07-2014 03:11PM

Oldtree wrote: »

Out of interest what % were they offered from the banks?

between 4.9% and 6.5% i think

BTW ; Im not trying to promote this product

Oldtree · 07-07-2014 04:32PM

lakill Farm wrote: »

setting an idea up for a few weeks time.

and will receive 7.5% interest per year.

Oldtree wrote: »

Out of interest what % were they offered from the banks?

lakill Farm wrote: »

between 4.9% and 6.5% i think

Why would they want to pay more money to investors than was on offer from the banks?

lakill Farm wrote: »

setting an idea up for a few weeks time.

lakill Farm wrote: »

Im not trying to promote this product

lakill Farm · 07-07-2014 04:37PM

Oldtree wrote: »

Why would they want to pay more money to investors than was on offer from the banks?

Im an accountant, i am doing it on behalf of a client.

Bit like breaking to the market and offering lower prices for services/goods to offer a new product like this the return has to be higher.

In the future we hope spin off products will be launched on property and investmeants

Oldtree · 07-07-2014 04:38PM

lakill Farm wrote: »

the investment is in the company and current book value on fixed project is €130k so company could be liquadated and shareholders would not loss out .

This is not absolute and would depend on the debts of the company at the time of liquidation, as well as the possibility of assets losing value for whatever reason.

Oldtree · 07-07-2014 04:39PM

lakill Farm wrote: »

In the future we hope spin off products will be launched on property and investmeants

Property is a bit of a sore word in Ireland when it comes to investment.

keep going · 07-07-2014 06:53PM

Oldtree wrote: »

Property is a bit of a sore word in Ireland when it comes to investment.

Not sure about that anymore, by the way my sugestion is in relation to land purchase so it would be on similar terms to banks except the interest would be lower

lakill Farm · 07-07-2014 07:35PM

Total assets €130,000

liabilities nil

shareholder funds €100
shareholder share premium account €34,900

Oldtree wrote: »

This is not absolute and would depend on the debts of the company at the time of liquidation, as well as the possibility of assets losing value for whatever reason.

moy83 · 07-07-2014 07:39PM

Oldtree wrote: »

Property is a bit of a sore word in Ireland when it comes to investment.

I'd say its changing though . I know a few lads that are trying to buy again

Oldtree · 07-07-2014 07:56PM

lakill Farm wrote: »

Total assets €130,000

liabilities nil

shareholder funds €100
shareholder share premium account €34,900

Just so I understand, the company owns a building (freehold) valued at €130,000 and no other assets. It has an idea for a business, and wants to borrow €35K from shareholders to implement the business idea, while offering a guaranteed return to shareholders (rather than borrow from a bank at a lower rate of interest)?? I wish them only success in their adventure.

lakill Farm · 07-07-2014 09:00PM

Oldtree wrote: »

Just so I understand, the company owns a building (freehold) valued at €130,000 and no other assets. It has an idea for a business, and wants to borrow €35K from shareholders to implement the business idea, while offering a guaranteed return to shareholders (rather than borrow from a bank at a lower rate of interest)?? I wish them only success in their adventure.

'

no thats what the 35k is for . to build a €130k freehold asset

Financial hook ups.

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