LinkedFinance - new website

lcwill · 28-11-2015 11:16pm #1

Any LinkedFinance users out there? Any thoughts on the new website - https://beta.linkedfinance.com/

Definitely a big improvement on the old one, and I like having the extra information on my portfolio upfront - number of loans, average interest rate etc. - and the "recent activity" box showing repayments is a nice touch.

Still not as open with their data as others like Bondora though. Hopefully this will come with time. I am a bit suspicious that of the 48 loans I have made so far not one has had a single late payment.....

Cute Hoor · 29-11-2015 4:21pm

lcwill wrote: »

Any LinkedFinance users out there? Any thoughts on the new website - https://beta.linkedfinance.com/

Definitely a big improvement on the old one, and I like having the extra information on my portfolio upfront - number of loans, average interest rate etc. - and the "recent activity" box showing repayments is a nice touch.

Still not as open with their data as others like Bondora though. Hopefully this will come with time. I am a bit suspicious that of the 48 loans I have made so far not one has had a single late payment.....

New site is an improvement alright although it takes a bit of getting used to.

Don't be suspicious, be thankful, over 150 loans made, 2 late payments (but both made).

lcwill · 29-11-2015 7:24pm

Cute Hoor wrote: »

New site is an improvement alright although it takes a bit of getting used to.

Don't be suspicious, be thankful, over 150 loans made, 2 late payments (but both made).

Glad to hear someone with experience of late payments - how did you find out? does linkedfinance notify you when a payment is late?

Do you know if there have been any cases of actual defaults or bankruptcy of linked finance borrowers? I also use Bondora and they give access to their whole database of information on loan performance. Linkedfinance is more of a black box.

Brussels Sprout · 29-11-2015 11:58pm

lcwill wrote: »

Do you know if there have been any cases of actual defaults or bankruptcy of linked finance borrowers?

A company I loaned money to on the site went into liquidation after only 3 repayments. Linked Finance have said that they're trying to sort out a deal but I haven't received any payments from that account since August.

Cute Hoor · 30-11-2015 1:00am

lcwill wrote: »

Glad to hear someone with experience of late payments - how did you find out? does linkedfinance notify you when a payment is late?

They emailed me about the first one (not sure if it was before or after I had contacted them), no correspondence on the second one and it was only a few days late.

Cute Hoor · 30-11-2015 1:04am

Brussels Sprout wrote: »

A company I loaned money to on the site went into liquidation after only 3 repayments. Linked Finance have said that they're trying to sort out a deal but I haven't received any payments from that account since August.

Unlucky BS, wouldn't like to hear that a business goes into liquidation so soon after being vetted by LF. Some failures of course are unfortunately virtually inevitable over a 3 year loan lifespan. When was this loan completed - looks like I dodged a bullet on it.

Duckett · 30-11-2015 1:38pm

have had a similar experience to Brussels Sprout above - the company was placed into voluntary liquidation - I am not very confident that the PG's will result in any late repayment - remains to be seen!! the borrower is beyond a default as no longer trading ...........

strettie · 01-12-2015 12:43pm

Icwill,
Have to agree the new website is a vast improvement especially on the portfolio side.

I would like to see a lenders forum on the website where we could bring issues to Linkedfinance and allow us to communicate together rather than each investor sending messages individually and to stop general issues taking over business Q&A's and then disappearing from from the site once the loan is finished.

Some examples of this over the last few months were
- businesses being approved for large loans and lenders not being notified the initial loan this is one of a sequence of loans. Peter O'Mahony (founder) made an apology for this and a commitment on how this will be addressed in future on a lendee Q&A which would not nesessarily be seen by all lenders
- initial loan requested decreasing as Linkedfinance become aware loan will not be funded
- would be good to see a listing businesses who have withdrawn loans, seeing an increasing number of these in recent months
- general communication of businesses gone into liquidation

I would be interested in a lenders forum being set up on boards.ie or elsewhere if people think there is a better online forum. I would be interested to hear peoples thoughts
Strettie

strettie · 01-12-2015 12:45pm

Brussels Sprout & Duckett

Which business you lent to went into liquidation?

Strettie

lcwill · 01-12-2015 1:49pm

strettie wrote: »

Icwill,
Have to agree the new website is a vast improvement especially on the portfolio side.

I would like to see a lenders forum on the website where we could bring issues to Linkedfinance and allow us to communicate together rather than each investor sending messages individually and to stop general issues taking over business Q&A's and then disappearing from from the site once the loan is finished.

Some examples of this over the last few months were
- businesses being approved for large loans and lenders not being notified the initial loan this is one of a sequence of loans. Peter O'Mahony (founder) made an apology for this and a commitment on how this will be addressed in future on a lendee Q&A which would not nesessarily be seen by all lenders
- initial loan requested decreasing as Linkedfinance become aware loan will not be funded
- would be good to see a listing businesses who have withdrawn loans, seeing an increasing number of these in recent months
- general communication of businesses gone into liquidation

I would be interested in a lenders forum being set up on boards.ie or elsewhere if people think there is a better online forum. I would be interested to hear peoples thoughts
Strettie

I definitely agree that we need a forum somewhere. I was quite surprised there hasn't been more discussion on here before actually - that was the main reason I decided to start this thread. For now I guess boards is this best option. Maybe someone from LF will see this thread and respond.

I have also accidentally lent to the same business twice in 2 different loans, going against my principles of diversification. Both loans are still paying back though so its OK so far.

PaulM1977 · 02-12-2015 4:05pm

Anyone have any experience of Grid Finance? Similar to LinkedFinance as far as I can see.

manonboard · 04-12-2015 3:20am

strettie wrote: »

I would be interested in a lenders forum being set up on boards.ie or elsewhere if people think there is a better online forum. I would be interested to hear peoples thoughts
Strettie

That sounds like a great idea.

I'd feel more comfortable with the linkedfinance platform with more information on how many liquidations, or failed loan repayments have happened. The information can be a bit scarce and it certainly makes me more apprehensive about investing more in the platform.

Other than that, I've had nothing but good experiences so far. Enjoyed it alot.
The new website is a great improvement and i love the extra graphs.

Delighted most of all they fixed that damn pie chart. It was such a glaring obvious design flaw that the chart did not show the principal invested..
Instead it had this "total invested" number which is next to useless for a lender.
If i lend you 100, and you pay me back 12 (10 principal + 2 interest), and i lend out that 12 euro..
I have 102 lent out.. not 112. (uses the returned principal again without deducting from the outstanding loans). I reckon this is the number they use when their site claims "14" million.

Its a big flaw, probably intentional to inflate numbers. My account was off by more than 12% because of that.

The new pie chart clears it right up and i feel much better about it. I know exactly what is out on loan now.

daheff · 04-12-2015 12:43pm

Brussels Sprout wrote: »

A company I loaned money to on the site went into liquidation after only 3 repayments. Linked Finance have said that they're trying to sort out a deal but I haven't received any payments from that account since August.

Out of interest, who was the company that went into liquidation.

I looked at linked finance, and thought it was too good to be true...they had nobody fail to make repayments (or even mention of late payments)...and the headline rates looked attractive....but when you worked them out...you were really only getting a return of around 3-4%...which to me wasn't attractive enough considering the risk.

manonboard · 04-12-2015 6:15pm

daheff wrote: »

Out of interest, who was the company that went into liquidation.

I looked at linked finance, and thought it was too good to be true...they had nobody fail to make repayments (or even mention of late payments)...and the headline rates looked attractive....but when you worked them out...you were really only getting a return of around 3-4%...which to me wasn't attractive enough considering the risk.

How do you think the return is only 3-4%?
I could be grossly miscalculating my returns, but im under the impression im getting 10-12% net?

I usually get a 14% loan rate, minus fee = about 10-12% net return?

gordongekko · 04-12-2015 6:20pm

manonboard wrote: »

How do you think the return is only 3-4%?
I could be grossly miscalculating my returns, but im under the impression im getting 10-12% net?

I usually get a 14% loan rate, minus fee = about 10-12% net return?

Isnt that over the 3 yr term of the loan?

Level 5 Vegan · 04-12-2015 8:54pm

gordongekko wrote: »

Isnt that over the 3 yr term of the loan?

Yes. But the monthly repayment becomes available immediately for you to withdraw or lend out again. So if you keep lending out your repayments every couple of weeks, you can maintain your average %.

If you were letting it pile up for the 3 years or so intending to withdraw it, sure you'll lose out cause you wouldn't be making much in the last 12 months of the loan.

gordongekko · 04-12-2015 9:17pm

Level 5 Vegan wrote: »

Yes. But the monthly repayment becomes available immediately for you to withdraw or lend out again. So if you keep lending out your repayments every couple of weeks, you can maintain your average %.

If you were letting it pile up for the 3 years or so intending to withdraw it, sure you'll lose out cause you wouldn't be making much in the last 12 months of the loan.

I was only answering the question asked.

Level 5 Vegan · 04-12-2015 10:34pm

As was I!

It's a valid point and you're right the % should be taken with a pinch of salt because you're going to have to let your cash pile up for a few months at a time whenever you do choose to begin withdrawing it.

lcwill · 05-12-2015 6:36am

manonboard wrote: »

How do you think the return is only 3-4%?
I could be grossly miscalculating my returns, but im under the impression im getting 10-12% net?

I usually get a 14% loan rate, minus fee = about 10-12% net return?

14% is pretty high, I average about 11.5% but on new loans I am going for 13%.

Cute Hoor · 05-12-2015 3:05pm

I have been signed up to Linked Finance just about a year now and this has been my experience.
I have invested in 160 businesses approx over the course of the year, relatively small amounts (there are some fairly serious investors on the site) in each loan, at interest rates from 6 to 15%.

All repayments have been met, although 2 repayments from the same business have been late.
I have re-invested each repayment (capital + interest) as I have received it.
By re-investing I now have 15.3% more invested than the funding I have provided.
I have received 4.15% interest (that is on the funding I have provided)

I will probably be providing very little extra funding from now on, I will just be re-investing the repayments received, and I should shortly be receiving sufficient daily repayments to fund projects on an ongoing basis.

I have no plans for the moment to either stop investing or to take out any money.
Doing a very rough calculation I should have 65% approx more invested than I've funded by the end of 2016, and 140% approx by the end of 2017. This is allowing of course for the utopian situation of LF staying in business (I see no obvious reason why they wouldn't) and no loan defaulting (an unlikely scenario). Getting access to your money of course is the real difficulty - you will have to wait for 3 years to get it all out.

Generally speaking happy enough how the business is being operated, although there was one situation where a company successfully sought funding (€40k), and were back within a couple of weeks looking for a second tranche. The fact that there was no mention of the second tranche requirement when the first one was being sought smacked of sharp practice to me. The second tranche wasn't funded.

Brussels Sprout · 05-12-2015 5:20pm

daheff wrote: »

Out of interest, who was the company that went into liquidation.

It was a roofing company based in Laois. On the old site they had a rating system for the businesses. I didn't even realise that the companies balance sheets and profit/loss statements were available so I just went by the ratings. Lesson learned.

I still think it's a great idea though and have since added to my funds on there (but I'm far more rigorous and selective now)

daheff wrote: »

...but when you worked them out...you were really only getting a return of around 3-4%...which to me wasn't attractive enough considering the risk.

I initially thought this as well but I wasn't factoring in the fact that every month you get back some of your principal which enables you to reinvest it.

manonboard · 05-12-2015 10:22pm

gordongekko wrote: »

Isnt that over the 3 yr term of the loan?

It's APR so its a per year if im not mistaken on how that works?
Now in year two, the APR is based on the remaining principal, but every month i log back in and relend the returned principal to a new loan. So its effectively a Effective annual growth number, minus the fee of course.

I have 10k in it, im about 8 months in. About 600 interest earned.
Ill hit 1000 euro profit by 12 month i suspect. I would be more but i drip fed my account with funds so it wasnt 10k from the start.

manonboard · 05-12-2015 10:23pm

I do make more in share trading.. quite a bit more.. but i like to try different things and keep my money very diverse in different platforms.

irish_goat · 07-12-2015 11:22am

Is anyone using this with the plan of sticking in long term i.e. 20 years?

daheff · 07-12-2015 11:34am

manonboard wrote: »

How do you think the return is only 3-4%?
I could be grossly miscalculating my returns, but im under the impression im getting 10-12% net?

I usually get a 14% loan rate, minus fee = about 10-12% net return?

The headline rate of 14% is on the full principal. You wont get interest on this full amount every month due to capital repayments. Over the 3 year period your principal is reducing every month (like a mortgage), so the interest received over time is less & less.

Level 5 Vegan wrote: »

Yes. But the monthly repayment becomes available immediately for you to withdraw or lend out again. So if you keep lending out your repayments every couple of weeks, you can maintain your average %.

If you were letting it pile up for the 3 years or so intending to withdraw it, sure you'll lose out cause you wouldn't be making much in the last 12 months of the loan.

Brussels Sprout wrote: »

I initially thought this as well but I wasn't factoring in the fact that every month you get back some of your principal which enables you to reinvest it.

Even if you intend on reinvesting monthly...can you be sure that you will always find enough 'quality' investments?

Now dont get me wrong, I'm not saying that there isnt a place for P2P lending, but I think people are getting dragged in by headline rates that arent quite what people think they are.

taking a worked example (and please somebody point out if i'm wrong):

Interest rate 12%
Loan amount 1000
Term 36 months

I work out that the monthly repayment is approx 33.21 EUR (principal & int). This then means that a total of 195.75 EUR interest is received over the life of the loan.
Quick cal means at 19.5% overall return, but per annum its more like 6.5% (dirty calc). Then once you pay your CGT tax its more like 4.35% (appreciate you have to pay tax on any gains)

Personally, for the risk involved I'd expect a better return

Cute Hoor · 07-12-2015 2:23pm

daheff wrote: »

taking a worked example (and please somebody point out if i'm wrong):

Interest rate 12%
Loan amount 1000
Term 36 months

I work out that the monthly repayment is approx 33.21 EUR (principal & int). This then means that a total of 195.75 EUR interest is received over the life of the loan.
Quick cal means at 19.5% overall return, but per annum its more like 6.5% (dirty calc). Then once you pay your CGT tax its more like 4.35% (appreciate you have to pay tax on any gains)

You are pretty much spot on here daheff, although I don't have a specific example of 12% to back up your estimate. The closest I can give is 12.2%, where the interest repayable on €1k over the 36 months would be €199.20, however when you take out LF's cut it brings it down to €179.50

manonboard · 07-12-2015 2:26pm

irish_goat wrote: »

Is anyone using this with the plan of sticking in long term i.e. 20 years?

I could only say i am in it until it no longer becomes profitable and safe to an extent offered by other options. If the rate fell, or the risks go up (due to bad businesses being approved), I'd stop lending and just remove my principal as its returned to me.
I guess i'd treat any option like that.

daheff wrote: »

Even if you intend on reinvesting monthly...can you be sure that you will always find enough 'quality' investments?
--
Personally, for the risk involved I'd expect a better return

So far, certainly not even a blink not finding quality investments. Of course, the market could get saturated and lower it, but if that turns out to be the case, I'd just move my money to somewhere else.

Luckily i've had no miss payments in the year i've been in it, with about 50+ loans on my books.

Cute Hoor · 07-12-2015 2:30pm

irish_goat wrote: »

Is anyone using this with the plan of sticking in long term i.e. 20 years?

I haven't thought about any particular lifespan for this, don't need this money at the moment so happy enough to leave it in there, earning a few bob and hopefully helping out a few businesses along the way. It would be silly of course not anticipating future financial needs and positioning yourself to get your money back in a reasonably timely manner as those needs arise.

Nody · 07-12-2015 3:35pm

manonboard wrote: »

I could only say i am in it until it no longer becomes profitable and safe to an extent offered by other options. If the rate fell, or the risks go up (due to bad businesses being approved), I'd stop lending and just remove my principal as its returned to me.
I guess i'd treat any option like that.

Be more concerned about the part you can't see; TrustBuddy is likely to turn into a more common occurrence over time (not talking about Linked Finance specifically but P2P lending in general). In essence TB used the money people got returned to do their own lending (it's only paper value as long as no one asks for it after all) and then started to use it to cover up losses made on their own lending rendering it a ponzi scheme.

manonboard · 07-12-2015 3:41pm

Nody wrote: »

Be more concerned about the part you can't see; TrustBuddy is likely to turn into a more common occurrence over time (not talking about Linked Finance specifically but P2P lending in general). In essence TB used the money people got returned to do their own lending (it's only paper value as long as no one asks for it after all) and then started to use it to cover up losses made on their own lending rendering it a ponzi scheme.

Appreciate the link and info, ill do my best to keep an eye on it. Cheers for highlighting the risk

lcwill · 08-12-2015 1:24pm

Just received notice of my first non-payment, a borrower has gone into liquidation. One of the Directors personally guaranteed the loan though so let's see what happens.

About 75% of the loan is still outstanding - I only make minimum loans (e50) so only e37 at risk but that is a fairly sizeable chunk of the interest I have received so far, and I understand we cannot write losses off against tax.

I have made 50 loans of e50 but maybe not diversified enough yet.

LinkedFinance - new website

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