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    • elephantrosie
    • By elephantrosie 10th Sep 17, 9:54 PM
    • 372 Posts
    • 102 Thanks
    elephantrosie
    jamesd- apart of isa, do you use ltd company to lower your tax on investment earnings? what is your daily job tax level?
    Another night of thankfulness.
    • bigadaj
    • By bigadaj 10th Sep 17, 10:12 PM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    jamesd- apart of isa, do you use ltd company to lower your tax on investment earnings? what is your daily job tax level?
    Originally posted by elephantrosie
    How does the limited company work?
  • jamesd
    jamesd- apart of isa, do you use ltd company to lower your tax on investment earnings? what is your daily job tax level?
    Originally posted by elephantrosie
    No. I have considered it to allow higher pension contributions after retiring. I don't have income tax to pay at higher or top rate because I use high pension contributions and VCT buying to reduce my income tax bill to only a few hundred Pounds a year.
    • elephantrosie
    • By elephantrosie 11th Sep 17, 6:12 PM
    • 372 Posts
    • 102 Thanks
    elephantrosie
    what is VCT?
    Another night of thankfulness.
    • taylornj
    • By taylornj 11th Sep 17, 8:45 PM
    • 171 Posts
    • 86 Thanks
    taylornj
    what is VCT?
    Originally posted by elephantrosie
    https://en.wikipedia.org/wiki/Venture_capital_trust
    • gingercordial
    • By gingercordial 12th Sep 17, 12:24 PM
    • 1,026 Posts
    • 1,012 Thanks
    gingercordial
    I'm new to all this forum thing, so not sure if I'm "in the right place". If I'm not, please advise where I'm best able to get the information I'm looking for.
    I'm looking to invest in a start-up that is raising funds via Crowdcube.
    Has anybody had any experience of this operation?
    Thanks and regards,
    Bob
    <><
    Originally posted by Pentirebob
    I've used Crowdcube several times for investments in shares and corporate mini-bonds. I can confirm the process seems to work well in terms of them taking the investment and issuing share certificates. For my bonds, I have received all interest payments on time plus a tax certificate e-mailed out promptly for each payment. I also received EIS certificates where appropriate although some were faster than others.

    I have not (thankfully) experienced anything going sour yet so I cannot comment on how they would handle that.

    One of my share investments was bought out and again communications were good and the sale proceeds came through in the stated timescale.

    As I'm sure you're aware under normal circumstances there's no ability to get your money back out on demand. There is no secondary market facility on Crowdcube (Seedrs, a similar platform, does have a monthly secondary market though I have not used it). You'd have to wait for the company in question to get bought out or something similar - the documents should include the current owners' plans for an exit strategy but of course these may never come to fruition. There are also not likely to be dividends paid by small start-ups in the first few years or potentially ever, so effectively nil cash return for some time. I've therefore treated my share acquisitions more as a cost of supporting a small business I'd like to see do well (sometimes there are perks such as discounts on the product which offset this, plus the (S)EIS relief) rather than proper "investments". The bonds, however, are giving a decent return and the capital is supposed to be paid back after a set period so there is an exit strategy with those (obviously not FSCS protected so risky).
    • Jordan Stodart
    • By Jordan Stodart 18th Sep 17, 7:55 PM
    • 11 Posts
    • 2 Thanks
    Jordan Stodart
    Has anyone got any thoughts on diversification at a platform level? Have you seen good performance investing across multiple platforms - if so, how many in the portfolio and what has worked well? Thanks!
  • jamesd
    Has anyone got any thoughts on diversification at a platform level? Have you seen good performance investing across multiple platforms - if so, how many in the portfolio and what has worked well?
    Originally posted by Jordan Stodart
    There are a some risks that happen at the platform level, rather than for individual loans:

    1. Platform business failure, which could leave your money invested until the normal end of the loan terms instead of giving you the chance to exist through the secondary market. This could also reduce debt collection effectiveness. The FCA requires runoff plans to be in place and suitably funded but a drop in returns is quite likely.
    2. Fraud against the platform by borrowers. While some degree of fraud attempts is normal, occasionally there have been signs that a platform might have been targeted by criminal groups who discover weaknesses in its checks. An example may have been the Bondora lending in Slovakia, which had an approximately 100% default rate, mostly apparently very early in the loan term.
    3. Fraud within the platform by employees or owners. A common way to steal money from a lending business is to invent fake borrowers and normal banks have had issues with this, as have a range of other lenders, though I don't know of a case in UK P2P.
    4. Entirely or mostly fraudulent platforms. Very unlikely in the UK for any platform which is going through the FCA authorisation process but it's been a huge issue in China. Make sure that any place you look at which claims to be a P2P platform really is a genuine one using the information in the FCA register.

    For fund investing the funds do have protection from much of this sort of risk via the FSCS, though not for the underlying investment performance. P2P doesn't even have that level of FSCS protection, it has none at all. So it's vital to diversify non-trivial amounts of invested money across several platforms to reduce the chance of a big loss due to issues that have affected just one platform.

    Having started in 2008 I currently use seven P2P platforms for a total amount in or designated for P2P in the £100-200k range, with two of them just having loans left until end of term and no new money going in and a third likely to join them.

    Aggregators like investUP might be interesting but it seems that their charge would take about ten percent of your total returns and not be a tax deductible expense. Maybe a way to explore but I wouldn't really want to be paying one £1-3k+ a year that a 1% charge would imply for me. Maybe play and explore but if the amounts get serious it's time to go direct to the end platforms. So far as i know there's nothing to stop you from finding deals at investUP then investing directly with the underlying platform if it gets to the point where the fee effect would become substantial.
    Last edited by jamesd; 19-09-2017 at 4:57 PM.
    • takesyourchances
    • By takesyourchances 19th Sep 17, 5:52 PM
    • 435 Posts
    • 257 Thanks
    takesyourchances
    Any thought on the new Ablrate loan today and anyone going for it?

    Been reading the P2P forum with regards to the security. Been awaiting new loans on Ablrate.
    • takesyourchances
    • By takesyourchances 19th Sep 17, 6:47 PM
    • 435 Posts
    • 257 Thanks
    takesyourchances
    Also see the supercar loan defaulted on Moneything today, hopefully the recovery process and sale of the asset comes through.
    • taylornj
    • By taylornj 19th Sep 17, 9:54 PM
    • 171 Posts
    • 86 Thanks
    taylornj
    Also see the supercar loan defaulted on Moneything today, hopefully the recovery process and sale of the asset comes through.
    Originally posted by takesyourchances
    There are two super car loans from the same borrower that are moving to the defaulted loans at 14%, and suspended from SM.

    The Birkenhead loans come to end of term tomorrow, and could soon be joining the supercars in the defaulted loans.
    • TheShape
    • By TheShape 19th Sep 17, 10:59 PM
    • 1,108 Posts
    • 862 Thanks
    TheShape
    There are two super car loans from the same borrower that are moving to the defaulted loans at 14%, and suspended from SM.

    The Birkenhead loans come to end of term tomorrow, and could soon be joining the supercars in the defaulted loans.
    Originally posted by taylornj
    And they all join the Lytham St Anne's loan. I think I'm right that Moneything had never had a default until 24/08/17 (although Birkenhead known to be on its way to default). Now, a month later, it will have four.
    • takesyourchances
    • By takesyourchances 20th Sep 17, 1:45 AM
    • 435 Posts
    • 257 Thanks
    takesyourchances
    It has been a bit of a bad run for Moneything recently, hopefully recovery will go well. I have £75 just in |Lytham St, I had £50 added to the one month extention of the super car, I see there is £33 of that in default, £17 odd returned. I did not have any in Birkenhead as sold out of that a while ago and put into something else.

    I will plough on with it, but hopefully MT has a run of better times again and some new quality loans.
    • Jordan Stodart
    • By Jordan Stodart 21st Sep 17, 12:25 PM
    • 11 Posts
    • 2 Thanks
    Jordan Stodart
    There are a some risks that happen at the platform level, rather than for individual loans:

    1. Platform business failure, which could leave your money invested until the normal end of the loan terms instead of giving you the chance to exist through the secondary market. This could also reduce debt collection effectiveness. The FCA requires runoff plans to be in place and suitably funded but a drop in returns is quite likely.
    2. Fraud against the platform by borrowers. While some degree of fraud attempts is normal, occasionally there have been signs that a platform might have been targeted by criminal groups who discover weaknesses in its checks. An example may have been the Bondora lending in Slovakia, which had an approximately 100% default rate, mostly apparently very early in the loan term.
    3. Fraud within the platform by employees or owners. A common way to steal money from a lending business is to invent fake borrowers and normal banks have had issues with this, as have a range of other lenders, though I don't know of a case in UK P2P.
    4. Entirely or mostly fraudulent platforms. Very unlikely in the UK for any platform which is going through the FCA authorisation process but it's been a huge issue in China. Make sure that any place you look at which claims to be a P2P platform really is a genuine one using the information in the FCA register.

    For fund investing the funds do have protection from much of this sort of risk via the FSCS, though not for the underlying investment performance. P2P doesn't even have that level of FSCS protection, it has none at all. So it's vital to diversify non-trivial amounts of invested money across several platforms to reduce the chance of a big loss due to issues that have affected just one platform.

    Having started in 2008 I currently use seven P2P platforms for a total amount in or designated for P2P in the £100-200k range, with two of them just having loans left until end of term and no new money going in and a third likely to join them.

    Aggregators like investUP might be interesting but it seems that their charge would take about ten percent of your total returns and not be a tax deductible expense. Maybe a way to explore but I wouldn't really want to be paying one £1-3k+ a year that a 1% charge would imply for me. Maybe play and explore but if the amounts get serious it's time to go direct to the end platforms. So far as i know there's nothing to stop you from finding deals at investUP then investing directly with the underlying platform if it gets to the point where the fee effect would become substantial.
    Originally posted by jamesd
    I think diversification at a platform level to mitigate platform risk - with reasons you list above - is a primary reason. I suppose another would be to spread exposure among markets, for example away from consumer which is being impacted currently in P2P - see, Zopa being affected by external competition in this market and so restructuring its offerings.

    What would a reasonable price be for the type of service that provides a portfolio targeting 10% returns (assumes 1% fee)? Or is it just something you'd use for research before going direct?
    • takesyourchances
    • By takesyourchances 2nd Oct 17, 5:47 PM
    • 435 Posts
    • 257 Thanks
    takesyourchances
    New loan flow seems to be quiet on Moneything and Collateral of late and Ablrate bit quite too.

    I have some idle funds in MT that has been sitting waiting on new loans as I am already invested in others and don't want to add any more to them, I may withdraw this and put it into my S&S ISA and await new loan and add fresh money to them.

    There was a run were it was hard to keep up adding and it seems to have tailored off a bit. I was wondering to myself with recent defaults happening at MT, has that slowed things up a bit with fresh loans....
    • taylornj
    • By taylornj 6th Oct 17, 1:12 PM
    • 171 Posts
    • 86 Thanks
    taylornj
    There are two super car loans from the same borrower that are moving to the defaulted loans at 14%, and suspended from SM.

    The Birkenhead loans come to end of term tomorrow, and could soon be joining the supercars in the defaulted loans.
    Originally posted by taylornj
    Just had MoneyThing e-mail, and two supercar loans have been recovered and all capital interest to be repaid. Looked in and loans now moved from defaulted to completed.

    The update is a bit short, maybe will have more details later.
    • TheShape
    • By TheShape 6th Oct 17, 3:37 PM
    • 1,108 Posts
    • 862 Thanks
    TheShape
    Good to see a satisfactory resolution to the Supercar loans. I'd sold up before the default so unfortunately didn't get the extra default interest.

    I think the borrower has had a number of loans from Moneything so I wonder if they'll borrow again in future or indeed whether Moneything will lend to them again? I suppose it depends upon the reason for the default and precisely what action Moneything needed to take to secure repayment.
  • jamesd
    It was probably mostly just cash flow. Maybe the husband who does the buying expected more sales, handled mostly by wife and employees, so spent a bit too much and the bank account ended up a bit short. If so, not ideal but to be expected from time to time in lending to trading businesses, just like ubiquitous delays in completing property developments.

    I did read recently that there's been a small drop in high end used car prices recently but doubt that was much of a factor, if at all.
  • jamesd
    I see there's some discussion over in the p 2 p i f of the difficulty of doing cooperative due diligence due to the moderation practices there banning giving the names of borrowing firms and linking to public information like Companies House info that both platform and borrower have agreed to publishing there (you have to, to register loan security) and press reports and the like. No surprise that people do it privately but I'd love to see that discussion with names and links happening in public as well as the umpteen ways from PMs through email, phone calls, forums and wherever else where people discuss in private.

    I also see some mods there mentioning being tired of moderating and thinking of resigning and closing that forum, even though it's Proboards' forum, not theirs, and members posting is what matters and it can just move. Being tired of moderating is natural, while talking about closing rather than just passing on to new mods is an unhelpful frightener.

    Don't worry about it. Like all independent forums it lives wherever its active members are, so it'll just end up somewhere else.

    To reduce the possible disruption you might want to suggest to people that if it does get closed we just gather here to share information about the alternatives that get started. That way lots of people will be well prepared to make the transitions as smooth as possible.

    When Motley Fool closed their forum Stooze, of stoozing fame, went and started up a lemonfool replacement. Someone is sure to do the same, likely several someones. Different mods, same discussions, hopefully with policies that don't make it so difficult to learn how to do due diligence and share it and the public information at the core of that so everyone can read it and form their own opinion.
    Last edited by jamesd; 08-10-2017 at 10:37 PM.
    • bigadaj
    • By bigadaj 9th Oct 17, 2:00 AM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    It was probably mostly just cash flow. Maybe the husband who does the buying expected more sales, handled mostly by wife and employees, so spent a bit too much and the bank account ended up a bit short. If so, not ideal but to be expected from time to time in lending to trading businesses, just like ubiquitous delays in completing property developments.

    I did read recently that there's been a small drop in high end used car prices recently but doubt that was much of a factor, if at all.
    Originally posted by jamesd
    As you say a function of the business model though if it was just cash flow couldn't they have negotiated a loan extension at an earlier stage?

    Would have saved reputations a little and probably cost them less money, they are obviously highly geared as part of the business model but this outcome seems to have been worse than it could have been.
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