LinkedFinance - new website

Doodoo · 14-12-2015 10:41pm

Am I right in saying that the only costs involved as a lender is the linked finance fee and the capital gains tax due. What rates are these charged at?

newacc2015 · 14-12-2015 11:09pm

Nody wrote: »

That only works as long as LF is competitive for the businesses though; how long do you think it will remain so? Banks are currently restrictive due to legislative requirements on core capital in the years to come (basically need to keep more cash in hand) and are currently stocking up but once there do you believe offering a 12% loan will be competitive (keeping in mind this is 12% on today's basically 1% base interest rates, so ~10 percent units above base as a rough estimate)?

What I expect will happen is the companies that can go to the bank/state investment quango will go down that route (better rates, lower repayments and longer terms); the once that can not (or the loans are to small) will keep doing P2P but that's going to decrease the quality of such companies as a whole (banks cherry picking the good companies leaving the rest). The second part I'd worry about is things are pointing in the right direction but what happens in another 2008 style recession? How many companies will simply then have to start giving up (after taking out one or two loans to try to keep the business running before failing; company liability after all)? This is why I'd be wary about thinking of it as a 30 year investment plan; I simply don't see the model having been properly tested in a difficult environment.

Another important element to consider is the rebranded Business Expansion Scheme which is now called Employment Investment Incentive (EII) which companies are able to get more affordable finance and the borrower gets tax credits. The likes of O'Hara Brewery and Green Isle Foods have used it recently. Its more favourable for companies as the finance is a far more reasonable rate

strettie · 15-12-2015 10:41am

DooDoo,

Income through LinkedFinance is subject to income tax at your marginal rate ( 20% or 41% ) plus PRSI (4%) and I think USC within whichever threshold rate applies to you.

You receive no deduction for loan defaults.

Also does anyone know whether you are taxed on the gross interest earned or the net interest after deduction of Linkedfinance's 1.2% fee ?

In the UK from April 2016 lenders will be able to lend just over £15000 through a new ISA scheme and interest will be tax free.

Strettie

benjamin d · 15-12-2015 11:50am

Can anything be read into loans not being accepted days after bidding has closed? There's one at the minute that closed 4 days ago but no bids have been accepted yet.

Level 5 Vegan · 15-12-2015 12:48pm

benjamin d wrote: »

Can anything be read into loans not being accepted days after bidding has closed? There's one at the minute that closed 4 days ago but no bids have been accepted yet.

Not really, I think they have something like two weeks to decide if they want to take the loan or not. I think I've only seen a company reject an offer once or twice.

manonboard · 15-12-2015 4:45pm

benjamin d wrote: »

Can anything be read into loans not being accepted days after bidding has closed? There's one at the minute that closed 4 days ago but no bids have been accepted yet.

The only thing i've read into with that over the last year is that the business in question may be dealing with LF in the background with certain conditions in order to accept the loan.
If a loan has a high average interest rate, it makes sense for the business to perhaps discuss fees etc with LF. It makes no difference to the lender though.

The longer they take, the more likely it is they will not take the loan is also the other thing i've found. Again, usually interested rate related.

4 days is nothing though. That would be pretty standard.

benjamin d · 15-12-2015 4:48pm

manonboard wrote: »

The only thing i've read into with that over the last year is that the business in question may be dealing with LF in the background with certain conditions in order to accept the loan.
If a loan has a high average interest rate, it makes sense for the business to perhaps discuss fees etc with LF. It makes no difference to the lender though.

The longer they take, the more likely it is they will not take the loan is also the other thing i've found. Again, usually interested rate related.

4 days is nothing though. That would be pretty standard.

Yes I did note that the average interest rate was quite high at almost 14% so I suspect that's the reason for the delay.

gvzAxle · 17-12-2015 3:32pm

strettie wrote: »

Income through LinkedFinance is subject to income tax at your marginal rate ( 20% or 41% ) plus PRSI (4%) and I think USC within whichever threshold rate applies to you.

You receive no deduction for loan defaults.

An emphasis on the above, I've noticed a few people here mention CGT, which doesn't apply to interest earned through LinkedFinance.

strettie wrote: »

Also does anyone know whether you are taxed on the gross interest earned or the net interest after deduction of Linkedfinance's 1.2% fee ?

The FAQ on their new site says the following:

add up all interest paid for the period, deduct all fees paid an that will give you the total 'interest paid' for tax purposes

lcwill · 17-12-2015 3:53pm

gvzAxle wrote: »

An emphasis on the above, I've noticed a few people here mention CGT, which doesn't apply to interest earned through LinkedFinance.

The FAQ on their new site says the following:

From what I understand, for people tax resident in Ireland it is supposed to be taxed as income at your marginal rate (not CGT, not DIRT).

I actually live outside Ireland and will declare it as foreign sourced income and pay tax on it in the country I am resident it (which has a Double Tax Treaty with Ireland which allows this).

gvzAxle · 17-12-2015 4:00pm

You mentioned Bondora before, have you any experience with them? Also do you know of other p2p lending sites that are worth looking into?

lcwill · 17-12-2015 8:27pm

gvzAxle wrote: »

You mentioned Bondora before, have you any experience with them? Also do you know of other p2p lending sites that are worth looking into?

I have been using Bondora for about a year, just letting autobid make loans but it started going bad in the summer and now more than a third of my loans are in default. I did some analysis of the data Bondora make publicly available and now pick loans based on some set criteria and it seems to be doing better but I still have a big overhang of bad loans from the time when I was using the autobid (portfolio manager on Bondora). I am waiting to see how things play out over the next year or so before putting any more money in.

I just started using Mintos too - but I am only lending on mortgages, car loans and asset backed business loans where the assets are worth at least 70% of the loans. These seem to be the criteria which result in fewest defaults judging by the data they release but so far it has been hard to find many loans to invest in so I haven't even been able to lend my original E1000 yet and it has been a few weeks. I am only doing E10/loan though and after my Bondora experience I am not going to relax my criteria just to lend the money.

lcwill · 17-12-2015 8:29pm

gvzAxle wrote: »

You mentioned Bondora before, have you any experience with them? Also do you know of other p2p lending sites that are worth looking into?

There are a few well established sites in the UK but rates are low and unless you have some sterling you want to put to work already it is not attractive to change euros when sterling is so strong.

spudwould · 31-12-2015 2:42am

Brussels Sprout wrote: »

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)

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.

Yes but then your money is invested over 4 to 6 yrs and every loan Linked Finance take a rake of 1.2% from the TOTAL lent and not the interest.
As far as I can see you need to get a 14% lending rate to make it worthwhile especially if you factor in defaults.
I have been a member since day 1 back in May 2013 and have had 1 loan default .. which in turn wiped a 1/3 off my interest.
I joined mintos which is the same type of crowd funding but they guarantee your loans on cars and personal loans. I had 2 defaults and all paid back in full after 60 days in default.

manafana · 01-01-2016 1:56pm

saw lots of questions on todays loan bidding, interesting to see people kicking up at last have certainly noticed a few poor loans sneaking into the portfolio of offerings for LF.

Cute Hoor · 01-01-2016 2:27pm

manafana wrote: »

saw lots of questions on todays loan bidding, interesting to see people kicking up at last have certainly noticed a few poor loans sneaking into the portfolio of offerings for LF.

The LF people appear to be on vacation today, they are doing themselves, the borrower and lenders no favours by their delay in responding

manafana · 01-01-2016 3:00pm

Cute Hoor wrote: »

You have to trust the due diligence that LF are carrying out on these businesses to a great extent, how can an ordinary investor properly financially evaluate a business other than by reading the financial summary and asking questions. Evaluating the future of the business is a finger in the air at best, looking at how long a business has been in operation, how well they have survived the recession, the need for the products they are manufacturing/selling etc are probably the most you can do. How can an ordinary punter do a proper evaluation of a butchers in Kilrush?

Any business who looks for a loan from LF are doing so to help their business develop, not repaying that loan will mean they are gone out of business or they will be doing significant reputational damage to their business. LF have a vested interest in ensuring that the businesses they feature can and will repay the loan - any failure of a business to meet repayments will result in reputational damage to LF, multiple failures will put them out of business. And of course every lender wants every business on LF to succeed. So all three stakeholders have a vested interest in this process succeeding.

Of course all businesses will not succeed and all loans will not be fully repaid, to expect otherwise would be naive in the extreme. Over the last year LF, at a guess, have funded 250 businesses, of those 250 it appears one has failed (if there were more it is likely that one of us would have come across it), and that was after 3 repayments had been made. That is roughly a 0.4% failure rate. I would expect this failure rate to be higher, and it will I suspect over the course of the 3 year loans. Anybody who is lending on LF has to expect a certain level of failure.

I don't see any reason why the failure rate should increase though as the P2P model matures, there are literally thousands of very good businesses out there, good businesses who will need financial support from time to time to develop their business. Once LF continue doing their due diligence on potential businesses then everything should be reasonably OK.

I had a look at the autobid facility and shied away from it, I prefer to have a look at each loan offer on its merits, and decide based on what I see whether or not to invest, also means I am investing at varying rates of return. As you say Icwill, diversifying is the key, investing in a larger number of businesses will make the odd (very odd hopefully) failure easier to bear. Investing roughly the same amount (whether that be €50 or €1000) in each business you invest in will also help average out any failures.

anyone new or wanting to learn read this, all i'd add is some cases it makes sense to invest more, have done some larger investments on products i know or would buy or services I know are booming but they are a small minority really.

spudwould · 01-01-2016 3:46pm

One very worrying aspect of Linked Finance I noted just after joining ... was that all you needed to set up an account was a valid Bank Account number and address and HEY PRESTO you can start lending money!

1. I contacted Linked Finance to find out what would happen to my investments if I passed away.. their reply was that they would not do anything unless I otherwise stated that I wanted my investments passed onto a family member.

2. I would like to know how long would my account have to be idle ie no investments made or no withdrawals drawn down from my account before LF make contact?

3. Or would my investment returns be left in LF account making interest for Linked Finance. As the amount of lenders has increased this is a very real possibility.

manonboard · 01-01-2016 6:59pm

spudwould wrote: »

One very worrying aspect of Linked Finance I noted just after joining ... was that all you needed to set up an account was a valid Bank Account number and address and HEY PRESTO you can start lending money!

1. I contacted Linked Finance to find out what would happen to my investments if I passed away.. their reply was that they would not do anything unless I otherwise stated that I wanted my investments passed onto a family member.

2. I would like to know how long would my account have to be idle ie no investments made or no withdrawals drawn down from my account before LF make contact?

3. Or would my investment returns be left in LF account making interest for Linked Finance. As the amount of lenders has increased this is a very real possibility.

Never Thought of that first one. I will certainly contact LF and give them my wishes.
I tend to update my mother on who to contact if i die every few months. Its a good habit. Its just a sheet with names, contact numbers, and roughly what they do for me and what she can expect.
"Patrick donald, solicitor, He will have a will for you. He also has a few documents for xyz".

spudwould · 03-01-2016 11:53am

manonboard wrote: »

Never Thought of that first one. I will certainly contact LF and give them my wishes.
I tend to update my mother on who to contact if i die every few months. Its a good habit. Its just a sheet with names, contact numbers, and roughly what they do for me and what she can expect.
"Patrick donald, solicitor, He will have a will for you. He also has a few documents for xyz".

I have to start thinking in the same direction .. way too laxadaisy

manafana · 03-01-2016 12:07pm

Wondering on the LF fee its taken per repayment so that means they got a fee for amount months paid back?

They charge 1.2% and 2.5% so there turnover is 3.7% of Loans made what kind of revenue a week they making. The method certainly leads to them been unfussed about what Loans they put up.

sceach16 · 03-01-2016 9:05pm

Wait a few days for response. It has been the festive season. I have a few pointed questions on the site!

TheSheriff · 05-01-2016 10:27pm

This is probably a stupid question but I cant seem to find the answer on the site.

I'm new to linkedfinace, made a bit yesterday of 50e on a lone which was coming to an end, but not fully funded.

This evening I logged on and the bi has been refunded to my account.

Could someone explain why that is? The borrower didnt accept the lone? Was the rate of interest (14.8%) too high?

Cheers in advance!

sceach16 · 05-01-2016 10:36pm

Yesterdays loan was oversubscribed so a bid of 14.8 was likely rejected. It may have been acceptable when made but others offered a lower rate before the closing time!

lcwill · 05-01-2016 11:01pm

Agreed, there are not many loans where 14.8% would be accepted as most are slightly oversubscribed and you would be eliminated pretty quickly at that rate.

I have avoid trying to get such high interest rates as it will be take a very long time to get your money invested, and when you do it will probably be for a higher risk loan which most people have avoided.

You might also be tempted to bid higher amounts for each loan just to get it invested but then you end up with an undiversified portfolio of high risk loans!

Anyone else noticed that average interest rates do seem to be increasing though? I think people are slowly pushing up the rates they are bidding at.

sceach16 · 05-01-2016 11:08pm

Very concise and very good advice ! Rates do seem to be going up. We, I anyway, are possibly getting a bit greedy.

manafana · 05-01-2016 11:09pm

lcwill wrote: »

Agreed, there are not many loans where 14.8% would be accepted as most are slightly oversubscribed and you would be eliminated pretty quickly at that rate.

I have avoid trying to get such high interest rates as it will be take a very long time to get your money invested, and when you do it will probably be for a higher risk loan which most people have avoided.

You might also be tempted to bid higher amounts for each loan just to get it invested but then you end up with an undiversified portfolio of high risk loans!

Anyone else noticed that average interest rates do seem to be increasing though? I think people are slowly pushing up the rates they are bidding at.

some of companies arn't as good as some of those at start, i certainly find myself bidding less than I did with some of the early start ups that really impressed me, the loans arn't as attractive now with the flood of loans

manafana · 05-01-2016 11:09pm

lcwill wrote: »

Agreed, there are not many loans where 14.8% would be accepted as most are slightly oversubscribed and you would be eliminated pretty quickly at that rate.

I have avoid trying to get such high interest rates as it will be take a very long time to get your money invested, and when you do it will probably be for a higher risk loan which most people have avoided.

You might also be tempted to bid higher amounts for each loan just to get it invested but then you end up with an undiversified portfolio of high risk loans!

Anyone else noticed that average interest rates do seem to be increasing though? I think people are slowly pushing up the rates they are bidding at.

some of companies arn't as good as some of those at start, i certainly find myself bidding less than I did with some of the early start ups that really impressed me, the loans arn't as attractive now with the flood of loans

manonboard · 05-01-2016 11:31pm

manafana wrote: »

some of companies arn't as good as some of those at start, i certainly find myself bidding less than I did with some of the early start ups that really impressed me, the loans arn't as attractive now with the flood of loans

I'd agree with this. I have found less confidence in the current recent live loans.

The borrowers don't seem to want to answer questions as freely as before. Some data seems missing periodically from balance sheets.

I also dont like the companies that seem to be trading 3ish years.. Its barely a footprint in finances. I think they are finding it hard to get better reliable companies.

spudwould · 06-01-2016 1:56pm

manafana wrote: »

anyone new or wanting to learn read this, all i'd add is some cases it makes sense to invest more, have done some larger investments on products i know or would buy or services I know are booming but they are a small minority really.

I wold like to add that "EVO Fitness" also went into default in June of 2015(I gave 2 loans).
It would be interesting to see how many have actually defaulted.

Cute Hoor · 06-01-2016 5:11pm

spudwould wrote: »

I wold like to add that "EVO Fitness" also went into default in June of 2015(I gave 2 loans).
It would be interesting to see how many have actually defaulted.

Unlucky spudwould, were these 2 separate loans, and when were they taken out, it looks like I might have dodged a bullet on this one as well.

So that looks like 3 failures now, and I expect to have one over the next week or so. This is an interesting one as there is a Directors Guarantee associated with it so it will be interesting to see how that pans out.

manonboard · 06-01-2016 6:20pm

Just sent a request to withdraw some funds i want else where. Ill let people know how long it takes.
1 day so far.

manafana · 07-01-2016 4:01pm

Cute Hoor wrote: »

Unlucky spudwould, were these 2 separate loans, and when were they taken out, it looks like I might have dodged a bullet on this one as well.

So that looks like 3 failures now, and I expect to have one over the next week or so. This is an interesting one as there is a Directors Guarantee associated with it so it will be interesting to see how that pans out.

lets see if guarantees hold up pretty easy to go bankrupt and hide assets somewhere else

manonboard · 07-01-2016 5:13pm

spudwould wrote: »

I wold like to add that "EVO Fitness" also went into default in June of 2015(I gave 2 loans).
It would be interesting to see how many have actually defaulted.

Do you get mails about this or have to check it yourself?

gordongekko · 07-01-2016 9:35pm

spudwould wrote: »

I wold like to add that "EVO Fitness" also went into default in June of 2015(I gave 2 loans).
It would be interesting to see how many have actually defaulted.

I was caught with them as well. I remember hearing about them on Joe Duffy and straight away thinking sh1t that's that money gone.

spudwould · 08-01-2016 1:23am

manonboard wrote: »

Do you get mails about this or have to check it yourself?

The linked finance team send a mail advising on the default and that they will follow up with the directors guarantee.
Then I received a mail every month when they defaulted on their payment date.
I was contacted by the LF team at the beginning of Dec to advise that the director did make a payment but as it was not a big enough payment to meet a months repayments on the loan to all lenders it would "lay" in their account until they receive another payment.
I would it rather "Lay" in my own account :P

spudwould · 08-01-2016 1:24am

manafana wrote: »

lets see if guarantees hold up pretty easy to go bankrupt and hide assets somewhere else

The linked finance team sent a mail advising of the default and that they will follow up with the directors guarantee.
Then I received a mail every month when they defaulted on their payment date.
I was contacted by the LF team at the beginning of Dec to advise that the director did make a payment but as it was not a big enough payment to meet a months repayments on the loan to all lenders it would "lay" in their account until they receive another payment.
I would it rather "Lay" in my own account

sceach16 · 10-01-2016 11:20pm

I complained to linked finance about the the default 8 % rate which appears on all loans. This is difficult to delete and can result in people posting bids at that rate (8%) rather than the intended rate.

Tonight, I got stuck with a bid at 8% which I did not intend. I have emailed linked finance to cancel it. I will keep ye posted on the outcome.

If I do not get a satisfactory outcome,. I will keeep ye advised on my complaints to the Central Bank and the various consumer protection authorities.

m320325 · 11-01-2016 2:30am

sceach16 wrote: »

I complained to linked finance about the the default 8 % rate which appears on all loans. This is difficult to delete and can result in people posting bids at that rate (8%) rather than the intended rate.

Tonight, I got stuck with a bid at 8% which I did not intend. I have emailed linked finance to cancel it. I will keep ye posted on the outcome.

If I do not get a satisfactory outcome,. I will keeep ye advised on my complaints to the Central Bank and the various consumer protection authorities.

I emailed James in Linkedfinance about this problem on 27-Nov-2015 for the same reason as you.

Quote from my email:
"if both fields are autofilled (€50 and 8%) then maybe have a 'confirmation' box to tick before clicking bid now or after clicking 'bid now' maybe ask are you sure you want to continue. My reason is its very easy to accidently place a bid of €50 at 8%"

But it appears nothing was done about it yet.

manafana · 11-01-2016 11:58am

Have boards or anyone being open to a LF section or another thread to discuss open Loans?

Todays loan doesn't look a bad one, that area of business is picking up, and a directors guarantee is always a little help to investors should things go wrong.

manonboard · 11-01-2016 2:34pm

manonboard wrote: »

Just sent a request to withdraw some funds i want else where. Ill let people know how long it takes.
1 day so far.

5 days now. Funds still in the LF account, so nothing happened yet.

I just sent them a second email. (first email had identification and bill included).

Will keep yas updated.

sceach16 · 11-01-2016 3:47pm

sceach16 wrote: »

I complained to linked finance about the the default 8 % rate which appears on all loans. This is difficult to delete and can result in people posting bids at that rate (8%) rather than the intended rate.

Tonight, I got stuck with a bid at 8% which I did not intend. I have emailed linked finance to cancel it. I will keep ye posted on the outcome.

If I do not get a satisfactory outcome,. I will keeep ye advised on my complaints to the Central Bank and the various consumer protection authorities.

I got a fast response and the bid cancelled! credit to James in Linked Finance

manonboard · 11-01-2016 6:48pm

manonboard wrote: »

5 days now. Funds still in the LF account, so nothing happened yet.

I just sent them a second email. (first email had identification and bill included).

Will keep yas updated.

Got a quick polite email from Sarah in LF who helped transfer the funds to my account today. It was my first transfer so happy to see it go through.

lcwill · 11-01-2016 7:03pm

manonboard wrote: »

Got a quick polite email from Sarah in LF who helped transfer the funds to my account today. It was my first transfer so happy to see it go through.

I have been wondering how it would work when it came to getting money out and was planning to make a withdrawal just to make sure it was possible.

Good to hear you were able to do so successfully so I won't need to try it myself now.

Just waiting for them to open a secondary market now to provide a bit more liquidity.....

Tar.Aldarion · 11-01-2016 7:27pm

They charge you on every day but two during the year to withdraw?

manonboard · 11-01-2016 9:20pm

Tar.Aldarion wrote: »

They charge you on every day but two during the year to withdraw?

Email says since its my first withdrawal, they can do it right away (i believe they meant no charge).
The new FAQ on their new beta site does not list Gale days and has updated info:

Copying for aid:
You can make four withdrawals from your account per year without incurring a fee, any additional withdrawals will incur a €10 charge. All withdrawal requests should be emailed to help@linkedfinance.com

ShoulderChip · 14-01-2016 7:42pm

lcwill wrote: »

I have been wondering how it would work when it came to getting money out and was planning to make a withdrawal just to make sure it was possible.

Good to hear you were able to do so successfully so I won't need to try it myself now.

Just waiting for them to open a secondary market now to provide a bit more liquidity.....

has there been any word of a secondary market?
Surely they should head that way, all the (succesful) UK based larger platforms have.

Cute Hoor · 14-01-2016 8:05pm

Email received from LF regarding a loan with a Director's Guarantee and where the last 2 repayments have now been missed.

On January 12th you were due to receive a payment from XXXXX XXXXXX. Unfortunately we have been unable to acquire funds from XX XXXXXX.

XX XXXXXX has informed us that her business is in the process of being wound up. We are currently in discussions with our legal partners about the retrieval of funds from XX XXXXXX on foot of the personal guarantee she has signed.

We will contact you again on or before 12th February with an update. In the meantime should you require any further information please get in touch.

newacc2015 · 15-01-2016 3:18am

If a business is wound up with linked finance. After revenue. Are you next in line with the after the banks with liquidation? As in you will be third in line for payment?

manafana · 15-01-2016 9:14am

newacc2015 wrote: »

If a business is wound up with linked finance. After revenue. Are you next in line with the after the banks with liquidation? As in you will be third in line for payment?

thats never been clarified, I worked in these area for little while but never read it as such since we arn't financial body as such that is regulated interesting to find out, I'm more concerned to these guarantees being chased.

Extra note these withdrawal limitations is that for them to make some small interest on held funds on overnight markets etc.

spudwould · 15-01-2016 11:32pm

Cute Hoor wrote: »

Email received from LF regarding a loan with a Director's Guarantee and where the last 2 repayments have now been missed.

On January 12th you were due to receive a payment from XXXXX XXXXXX. Unfortunately we have been unable to acquire funds from XX XXXXXX.

XX XXXXXX has informed us that her business is in the process of being wound up. We are currently in discussions with our legal partners about the retrieval of funds from XX XXXXXX on foot of the personal guarantee she has signed.

We will contact you again on or before 12th February with an update. In the meantime should you require any further information please get in touch.

How long was this loan live before defaulting?

LinkedFinance - new website

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