Discussion
Anyone used lend invest? https://www.lendinvest.com
Wandering what peoples opinions are on it, mainly looking from an investment point of view.
Wandering what peoples opinions are on it, mainly looking from an investment point of view.
That might explain the rates.
One of the issues I have with these lending entities is that since 2008 there has been absolutely no shortage of bank debt availability to these types of businesses as banks have sought to still carry out higher risk lending but through independent shop fronts so why would a second line lender want to give away 7% to retail lenders plus all the hideous admin when they can borrow limitlessly from the market at probably under 2% and with almost no admin costs?
I am always wary of B2C models which suddenly go all altruistic and swap the B for a C. In most cases it's down to a compliance arbitrage in that the collective money of retail investors is thick as s
t and the penalties for not returning it are low. Ie the retail money doesn't do any due diligence, it just ploughs in on the back of a pretty website and a big return offer, it also has no understanding of risk so is happy for you to invest their money into ventures which the institutional money would rightly say no to. And finally, as there are no real personal penalties for it all going wrong you can lob their money at whatever you like, take your fees and if it doesn't work out then the FSCS will bail out your customers and the FCA is unlikely to ever cause you any real hassle and you are free to do it again and again.
I just believe that corporate businesses specifically operate to make the most amount of profit for the least amount of effort and when you see a firm unnecessarily giving away 500bp of profit potential there must be a compensation to justify their actions. The first that springs to my mind is that they are writing any old bag of bks business at the wrong commercial rates and just hoovering up buckets of credit liabilities that a corporate lender would never allow them to do?
One of the issues I have with these lending entities is that since 2008 there has been absolutely no shortage of bank debt availability to these types of businesses as banks have sought to still carry out higher risk lending but through independent shop fronts so why would a second line lender want to give away 7% to retail lenders plus all the hideous admin when they can borrow limitlessly from the market at probably under 2% and with almost no admin costs?
I am always wary of B2C models which suddenly go all altruistic and swap the B for a C. In most cases it's down to a compliance arbitrage in that the collective money of retail investors is thick as s
t and the penalties for not returning it are low. Ie the retail money doesn't do any due diligence, it just ploughs in on the back of a pretty website and a big return offer, it also has no understanding of risk so is happy for you to invest their money into ventures which the institutional money would rightly say no to. And finally, as there are no real personal penalties for it all going wrong you can lob their money at whatever you like, take your fees and if it doesn't work out then the FSCS will bail out your customers and the FCA is unlikely to ever cause you any real hassle and you are free to do it again and again. I just believe that corporate businesses specifically operate to make the most amount of profit for the least amount of effort and when you see a firm unnecessarily giving away 500bp of profit potential there must be a compensation to justify their actions. The first that springs to my mind is that they are writing any old bag of b
ks business at the wrong commercial rates and just hoovering up buckets of credit liabilities that a corporate lender would never allow them to do? Gassing Station | Finance | Top of Page | What's New | My Stuff