P2P: Ablrate

taylornj

jamesd wrote: »

A bit of a drought of loans at many places this time of year so mentioning the current three available at Ablrate may be of interest:

1. property development loan paying 16% with two layers of protection, one the property, another a different company that introduced the loan. Also interesting that this is an improved offer from the original proposal based on lender feedback.
2. lending to a firm that finances cars for car dealers paying 12%.
3. lending to a firm that holds leases, secured on teh lease payments mainly, paying 12%

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The new developers have been getting lots of useful changes in place.

Legals continue on the defaulted loan - court judgement received and the borrowing company is subject to a winding up order and likely move to make the directors personally liable.

Aware of the three loans, had my problems with Ablrate resolved. Not their fault my ISP switched on spam filtering, can't understand why only Ablrate started being filtered out, and lots of spam was being allowed through. Turned off the setting and now getting the e-mails.

There are some other loans around, MoneyThing supplied a list for over the the rest of the month. Some from SavingsStream in the pipe line, I am now having to reject and set pre-funding to zero quite often.

I will be adding other platforms, it's takes a little time to get used to each. Then build up a spread of loans. Ablrate has been a little slower and still in the stages of building up the number of loans.

bigadaj

Lending limits on Moneything are now a bit silly though, four loans currently being listed none of which having an initial limit over £50.

ruperts

Attractive rates indeed but they must be pretty risky loans otherwise why would they accept such high interest in an age of ultra cheap credit?

jamesd

bigadaj wrote: »

Lending limits on Moneything are now a bit silly though, four loans currently being listed none of which having an initial limit over £50.

That's because they are renewals of existing loans. With renewals existing holders get a box to tick to say "reinvest my money in the replacement loan" and then get that allocation ahead of others. So the bid limit is based on what MoneyThing expect will be available and not already taken by existing holders. This is to make it easier to keep money invested.

Ablrate has also occasionally done bid limits when size/demand seemed to warrant it, though usually the size of loans and number of investors on the platform makes it unnecessary at the moment.

jamesd

ruperts wrote: »

Attractive rates indeed but they must be pretty risky loans otherwise why would they accept such high interest in an age of ultra cheap credit?

Depends on the market that the ultimate borrower can borrow from.

The 16% loan was essentially rejected by possible lenders on one platform at around 11% and also at Ablrate at 12% for the initial amount desired. That prompted an alternative plan with another lender providing much of the originally desired amount and a higher interest rate offered via Ablrate that doesn't change the overall rate for the borrower. Costs for property development finance aren't your typical mortgage rates and can easily be a few percent a month.

The 12% car dealer stocking finance loan again is based on the credit available to the borrower and the profitable interest rate margin between the rate it charges smallish car dealers for credit and the rate it's paying to borrow the money it's lending. They have introduced a lower interest rate tier for dealers with better (longer etc.) credit profiles though that doesn't affect the loan rate via Ablrate.

The least deal is similar, the profit margin between revenue from leases and cost of borrowing.

All of those can make sense from a business profit point of view vs the other forms of financing available.

There's definitely risk and like shares and most share funds the overall category is "high risk". Which is pretty much normal for many types of investment, not words to be inherently scared of provided you understand why the risk is at that level. For share funds it's because a 40% capital drop over a few days is entirely possible. Different risks in P2P than that one but still takes some understanding of what they are for each loan.

I've got £10-20k combined over each of the three loans I mentioned or a previous version of the same thing. Which doesn't mean that you should, just that I think some is worth having within my own overall mixture and risk tolerance.

bigadaj

jamesd wrote: »

That's because they are renewals of existing loans. With renewals existing holders get a box to tick to say "reinvest my money in the replacement loan" and then get that allocation ahead of others. So the bid limit is based on what MoneyThing expect will be available and not already taken by existing holders. This is to make it easier to keep money invested.

Ablrate has also occasionally done bid limits when size/demand seemed to warrant it, though usually the size of loans and number of investors on the platform makes it unnecessary at the moment.

Yes, but they have also been doing it on new loans as well.

I understand the principle and agree, but with such low limits it is barely worth bothering, I can understand limits in say the low hundreds to aid diversification and ensure that a few individuals don't take large percentages of the allocation (such as yourself).

It is just the fact that lending £20-50 would take years to build any decent position.

jamesd

Those limits do provide social good to those who have smaller amounts to invest and I quite like that social benefit vs those who have accumulated more.

The "secret" to getting invested more heavily at MoneyThing and to a lesser degree at Ablrate (more for diversification there) is the secondary market. To illustrate, most of this growth was by secondary market at MoneyThing:

month 1: 100%
month 2: 114%
month 3: 141%
month 4: 202%
month 5: 223%

The jump starting in month 3 was when I started doing more frequent secondary market checks. Not hugely frequent, a few times a day well spread out, just not mostly ignoring it. During month 5 I also sold around 50% of the initial value from month 1 having got up to circa 280%. The amounts here are in the few tens of k range. I could probably have invested 50-100k a month if I'd wanted to and was willing to accept the high concentration I'd have had in AE* loans.

Another time for those with more money to get invested is the moment 24 hours since initial loan opening has passed. That's when the cap is removed and you can buy as much as you want - if you can move fast enough to beat the others trying it.

Ablrate is currently a good deal easier a place to get the odd couple of hundred thousand invested fairly quickly, though with limited initial diversification. Quite big bids on the currently open loans then there's a fair amount that comes up on the secondary market to diversify across loans. Can look to sell some of the initial new loan buying later as secondary market and other new offers show up. If there's a need to give that selling a nudge a tiny discount can often do the trick - 99.999% of par say. Though 100% of par will usually move fairly rapidly in amounts up to maybe 1-20k a week depending on loan and demand at the time.

jamesd

FYI at MoneyThing a new AE* loan is going live tomorrow with a £600 initial bid limit and also a property development loan with no bid limit in part because it's the 6th of the instalments being sought as the construction progresses and many people already have all that they want of it. This tends to be the time when a broader range of things than usual can show up on the secondary market.

At Ablrate the lease loan is now full but the other two are still available at 92% and 32% filled so far. Still quite a lot of secondary market availability for a fair range of loans also.

TheShape

Continuing to cautiously investigate p2p this week by opening an account with Ablrate. An initial investment of £100 in the Modular Buildings loan.

Trying to fully understand the secondary market as there are some small portions of loans available and I'm interested in investing further small amounts but wish to diversify across loans.

TheShape

First investment via the secondary market today. Just £50 (cost slightly more as paid>100%). Easy to see what's on offer and fund quickly via Debit Card.