Funding Circle slow selling

davidwatts

New selling tool being introduced.

http://resources.fundingcircle.com/accessing-your-funds-through-funding-circle/

chamelion

davidwatts wrote: »

New selling tool being introduced.

http://resources.fundingcircle.com/accessing-your-funds-through-funding-circle/

to sum up:
- it could take longer to sell loan parts entirely
- but you recover money more gradually
- and for this you're charged 1.25%"transfer payment" for which apparently the buyer benefits. how exactly this works is black box.

overall, not impressed. the old secondary market was quick and effective - it's ever since they've black boxed the whole thing that things have gone downhill.

i'm already in process of drawing down funds - still 4 months into my sales process. but i'd rather sacrifice interest to find something a bit more stable and future proof - i see FC ending in not a very positive way.

hahnchen

This should be a good change, I'm pleasantly surprised that Funding Circle aren't taking a cut of the sale fee.


The problem was that Funding Circle kept prioritising new loans over old ones. Now there is an added incentive to take some of the older stuff.

Ash_Pole

I've been in the sales queue since early June, pretty unlikely I'm going to get sold before the new system kicks in and all that waiting has been for nothing.

At the very least they should waive the selling fee for existing queuers.

FC is in a mess. When the cash from the float runs out I can't see it surviving.

chamelion

Ash_Pole wrote: »

I've been in the sales queue since early June, pretty unlikely I'm going to get sold before the new system kicks in and all that waiting has been for nothing.

At the very least they should waive the selling fee for existing queuers.

FC is in a mess. When the cash from the float runs out I can't see it surviving.

Precisely why I'm trying to cash out and leave. But with a 4 month++ window before I can retrieve everything I'm genuinely concerned I won't see a lot of my deposit back.

jamei305

How is FC coping with so many businesses ceasing to trade?

mageilken

FundingCircle have paused the secondary market for loan sales https://www.fundingcircle.com/blog/2020/04/update-on-the-secondary-market/

torrence

I think P2P platforms are having to limit lenders to only withdrawing interest and loan parts repaid. Reselling loans on the secondary market has been stopped because I think there are no buyers. 

There has been a rush to cash out, and like a run on a bank, the liquidity has dried up.

Lenders best hope now is that the P2P platforms have good credit risk models and that most loans are asset backed with security because the bad debt rate is going to be high.

Any P2P that gets through this crisis without lenders suffering losses will be stronger and will benefit as an attractive option with the low yield of other investments. But if lenders lose money, they are finished.

So with what is at stake, I am sure Ratesetter, Funding Circle, and Assetz Capital will do everything possible to protect lenders from losses.