Squirrel Money P2P

[humvee]

I see we have a new launch in the NZ p2p market this week. http://squirrelmoney.co.nz
I thought I would start a seperate thread so we can discuss it. Too soon for me to make much comment other then the sign up process seemed very buggy - but I was signing up using android rather then a windows computer

[Saamee]

I signed up yesterday too. Desktop PC = No issues. They are even offering $50 Account Credit to Investors for Nov 15 sign ups. The main attraction is that they will be offering Secured Loans.

[Harvey Specter]

The main attraction is that they will be offering Secured Loans.
My guess a lot of it will just be offering ther broking business second mortgages. Given the changes in banking rules, it could be very successful.

I need to investigate the guarantee a bit more - from memory, there is a fund set up but if that is used, they start taking an extra cut from investors. So not really a guarantee/insurance, just a buffer.

[unhuman]

Signed up yesterday with no problems.

[humvee]

How long would you like to invest for?

2 YEARSNo two year loans awaiting funding.
Two year lending has an average interest rate of 0.00%.

3 YEARSNo three year loans awaiting funding.
Three year lending has an average interest rate 0.00%.

5 YEARSNo five year loans awaiting funding.
Five year lending has an average interest rate 0.00%.

[humvee]

OUR BORROWER STATS
Average weekly borrower interest rate0.00%
Funds awaiting borrowers$150,000
Borrowers awaiting funding0
Average loan amount$0
Total lending to date$0


Obviously the above figures are not real time - as its the same as yesterday, even after my 1st small deposit cleared in, and Im sure some others prob deposited money yesterday too.

[Kees]

I signed up yesterday as well have a few concerns to sort before I will be investing and I will wait and see how it progresses so any feed back on this
P2P company would be appreciated.
one concern is the high or relatively high input $500 minimum compared to Harmoney and also the 2% yearly take of the balance owing .

[humvee]

also the 2% yearly take of the balance owing .

Note this "0.167% of the loan balance charged monthly (equates to 2% of the loan balance per year)" is charged to to borrower now the lender.
https://www.squirrelmoney.co.nz/fees/
In fact it appears that all Squirrel fees are paid by the borrower not the lender - unlike harmoney

[Saamee]

The 2% / Year fee is confusing.. As from the Website one place suggests Borrower pays however the Investors T & C's says the Investor pays!
77057706

[humvee]

The 2% / Year fee is confusing.. As from the Website one place suggests Borrower pays however the Investors T & C's says the Investor pays!
77057706


I asked Squirrel to clarify - after a couple of emails - here it a reply I think clarifys it

"To clarify, there is only one service platform fee of 2%. If you are investing say 6% - you will get 6% or, slightly under as we need to pay RWT on your behalf. It does not mean you are getting 6% - 2%.


So yes the borrower is paying the additional as we add it to the investment rate prior to presenting the offer to the borrower.


Kind regards,






Charles Chen
Operations Manager"

[AppleCrumble]

Be interesting to see a comparison with harmoney for value/fees,if anyone is interested?

[AppleCrumble]

Can anyone explain the establishment fee of 250/500.does the lender or squirrel get that? Seems a bit steep?Tks

[unhuman]

Squirrel gets that. Its cheaper than Harmoney which has a minimum 300.00 fee for unsecured loans (Harmoney have faced pressure over their fees).

Has anyone seen any loans to invest in yet?

[humvee]

Looks like the site is having problems at the moment. No matter what i do in dashboard i get the eŕror below

"Something went wrong

Something went wrong, best to go back to the page you just came from and try again."

[Saamee]

I withdrew my 1K inital funding on Friday. Fed up of checking in and NO loans to see and pick from. Will give them time to mature before trying again.

[humvee]

Looks like the site is having problems at the moment. No matter what i do in dashboard i get the eŕror below

"Something went wrong

Something went wrong, best to go back to the page you just came from and try again."

Can anyone get past the dashboard? Im still getting "Something went wrong
Something went wrong, best to go back to the page you just came from and try again."

[unhuman]

I am having that problem along with I assume everyone else.

[unhuman]

Going by the stats along the bottom of the borrow section it would appear that at least there is now one borrower looking for a loan.

[Valleytrader]

Hey Saamee, how did you withdraw your funds? I've signed up and transferred some funds into Squirrel but cannot see the function where you can transfer funds back into your bank account. Do you have to contact them and request a transfer of funds?

[AppleCrumble]

Squirrel gets that. Its cheaper than Harmoney which has a minimum 300.00 fee for unsecured loans (Harmoney have faced pressure over their fees).

Has anyone seen any loans to invest in yet?

Is that fee not expensive? I mean what do the banks charge? I thought p2p was meant to be cheaper than banks? Or is it just easier to get the loan loan on p2p? As far as I recall the interest rates are lower with p2p than banks.

[unhuman]

The interest rates and ease of set up are the main attractions for P2P.

Website looks to be fixed now, placed an investment order for a secured loan. Lets see how long it takes to fill.

Does anyone know if there ahs been any marketing by Squirrel?

[humvee]

A newsletter just went out today, there are a few things in in im not so sure are good for investors - it sounds like they are going to artificially force interest rates for investors down - if this happens im out

"When there aren’t enough Investor bids in the Marketplace at a price that will allow a loan to settle we step in and fund the gap. "

"We’re making a small change to the the rates you can bid which will be active by the end of this week. "

"To resolve the issue of large rate fluctuations we're seeing, we're going to set a market clearing rate. Investor bids can only be placed 0.50% above or below this rate. The market clearing rate will increase or decrease gradually depending on the direction of bidding so rates will still move up and down but without getting influenced by outlier bids.

The benefit will be more competitive rates for creditworthy Borrowers (so they take up the loans) and more investment opportunities. The market rate for investors is going to be initially set at 8.00% which is where loans are currently being matched."





The interest rates and ease of set up are the main attractions for P2P.

Website looks to be fixed now, placed an investment order for a secured loan. Lets see how long it takes to fill.

Does anyone know if there ahs been any marketing by Squirrel?

[humvee]

They have changed it already

Minimum rate is 6%, maximum rate is 9%


A newsletter just went out today, there are a few things in in im not so sure are good for investors - it sounds like they are going to artificially force interest rates for investors down - if this happens im out

"When there aren’t enough Investor bids in the Marketplace at a price that will allow a loan to settle we step in and fund the gap. "

"We’re making a small change to the the rates you can bid which will be active by the end of this week. "

"To resolve the issue of large rate fluctuations we're seeing, we're going to set a market clearing rate. Investor bids can only be placed 0.50% above or below this rate. The market clearing rate will increase or decrease gradually depending on the direction of bidding so rates will still move up and down but without getting influenced by outlier bids.

The benefit will be more competitive rates for creditworthy Borrowers (so they take up the loans) and more investment opportunities. The market rate for investors is going to be initially set at 8.00% which is where loans are currently being matched."

[Saamee]

Hey Saamee, how did you withdraw your funds? I've signed up and transferred some funds into Squirrel but cannot see the function where you can transfer funds back into your bank account. Do you have to contact them and request a transfer of funds?

SETTINGS > Click VIEW > On Call Account Tab > WITHDRAW

Rgds Saamee

[humvee]

They have changed it already

Minimum rate is 6%, maximum rate is 9%


Im getting very close to walking away from squirrel.

Not only have they reduced the maximum interest rate for investors from the still advertised 12% to 9% - but when as a result of the reduced rate cannot get investors to in invest they are biding against investers at the lower rate then selling them back to investors at this reduced rate of return - making it look like this is the market is at when its not.

In the process of doing this they are preventing users from using fictionalization, I emailed them to ask why my 9% investment order had not been matched to any of the loans available at 9% on the market place currently. I don't have time to paraphrase so im just going to just copy paste below - they should not object since they seem to make it very clear that they believe that what is going on has been widely published already...... While i accept it has been published suspect alot of investors have not added all the little bits together to see the problems in the full picture.

Me: "HiCould you please check why my other order @9% for 2 years had not matched to either of the 2 x 2 year secured loans shown as available currently.
I then canceled and recreated the order by clicking on one of those 2 loans...... but still it did not appear to match up."

squirrel: "Hi Warwick, apologies there maybe some confusion about taking up those investments which we will put up some text around soon.
Those are investments which you need to fully fund if you are to take them. We can see you still have some other orders waiting to be filled – if you cancelled your orders you should have enough to fully fund that one available for $2k at 9%."

Me: "I thought the point was to be able to split across multiple loans to reduce risk. I was only looking to invest $500 in each loan or to each person.Will i still be able to take $500 of one of those loans when the remainder is filled?"

squirrel:"Hi Warwick I think we have discussed previously that our Loan Shield product actually helps reduce risk anyway so it doesn’t really matter whether all your money is in one loan and the borrower misses a payment or if its split into 5 loans and one borrower misses a repayment. There have been numerous newsletters sent out over the last few weeks to investors as well explaining this.


You have split your investments into $500 into each loan which is fine, as you will end up investing in separate loans however those ‘ready to go’ investments you can see on your dashboard need to be funded fully by a single user in order to be taken.


The loan itself already has been fully funded by Squirrel Money already as we have limited funds and are able to provide some liquidity on the platform, and already broken down into these smaller ‘chunks’. At this stage we cannot split these down further as we are also trying to encourage investors to invest larger amounts rather than smaller as that means their money isn’t sitting around doing nothing in the short term."

[AppleCrumble]

That's interesting. Don't think u want to give 2k to one borrower.would rather split it across multiple borrowers.they say loan shield protects investors but that has its limitations, being only 4%? of the loan book. Seems very different model to harmoney.

[unhuman]

The way I see it, spliting loans is not required as it doesn't matter which investor holds a loan gone bad as everyone else chips in to cover regardless of the size.

eg there is no difference between me having a 10k loan go bad and splitting that orginal loan 5k each with someone else and it going bad. Everyone else still will be covering the loan payments via loan sheild.

It's basically P2P socialism.

[Harvey Specter]

It's basically P2P socialism.That is my understanding of it. Also it is a self insurance scheme so if the fund is fully utilised, they make an additional call of all investors to rebuild the fund.

Returns seem good compared to a bank but Harmoney is providing a high return and the diversification should be beneficial since no insurance. Time will tell.

[JB@Squirrel]

JB here from Squirrel Money - jumping on this tread and happy to discuss any aspects of the platform. I'm busy so any replies by me might be a bit sporadic.

The platform is vastly different to Harmoney so appreciate we've still got a bit of a communication job to do explaining how the platform works.

Reserve Fund (Loan Shield)

It seems the Reserve Fund is now understood. Basically we build up provisions in the Reserve Fund for credit losses. Borrowers are still charged a risk-adjusted interest rate and it is the credit risk part of the rate that is passed up to reserves.

It's exactly the same way a bank does it and it maximises the risk-diversification benefit.

It does mean that the underlying loan's credit risk is irrelevant to investors and so you don't need to split up investments. The focus should be simply on rate and term. This is to make investing easy and quick.

We are currently reserving at around 4.00% against expected credit losses of 1.20% and an internal policy threshold of 2.00% so its conservative. Credit losses should be low right now, and nows not really the test. The real test is when the market deteriorates.

Investor Returns

Our returns might not be as good as Harmoney in the short term but they are more predictable.

Our borrowers will be getting better deals and we are staying away from the riskier end of the market. We are focused on high-quality lower risk borrowers and to make it simple for retail investors. If we can attract retail investors it will allow us to deliver lower borrowing costs.

I'll be upfront with you - we're about letting the market find its equilibrium. I think over time that will mean more investors and that will lower yields. What is the market return for a lower risk investment? Currently we are sitting around 8.50% for 5 years (but duration is around 3 years yes) which I think is too high. Over time that may drop to around 7.00% but only the market will decide that.

It is important to note that our platform margin does not penalise investors when borrowers repay early. This can have a significant impact on your return if a loan repays early. Equally if a borrower tops up their loan we do not repay the existing one.

As far as credit risk is concerned with the Reserve Fund there should not be any further call on investors for defaults (and if there was it would be socialised by shaving interest returns.) So our returns are net of defaults.

Setting the Market Rates

We under-estimated you guys at launch and thought the market would settle down quickly. What surprised us was that illiquidity meant the rates jumped around a lot and some investors were simply trying to game the platform at high rates - especially when you consider the underlying risk is low. It impacted on borrowers.

The way it works now is that Investors can only bid 0.50% above or below the market rate. If there is a shortage of funds in the system as there is now then investors can bid at the high end confidently and know their funds will be lent out. If there is a surplus of funds then the reverse is true.

We'll gradually dial up or down the market rate based on what is happening in the platform. We are going to hold the market rates until we have some volume in the platform and then use a 4-week moving average of the settled rates to determine the market rate.

Authentic Peer-to-Peer

We are not taking in any money from banks or investment bankers. Interestingly we could easily lend out over $500k a week at the moment but have dialled the tap back to tie it in to how quickly the investor funds are coming in. No point getting borrowers into the platform if we do not have sufficient funds to lend out.

To this effect we have an internal underwrite that allows us to settle loans quickly and pass them back to the "market" / investors.

We have already built a secondary market that will allow investors to sell their loans back to the platform (at face-value) but this is still to be signed off by the FMA in early 2016.

I'd be really interested in what else you guys would be keen to see?

Feedback welcomed.

[JB@Squirrel]

Hi Humvee,

We know we still have a bit of work to tidy up the bidding process. Its mostly sorted now with some good changes going through this week. We're now focusing on getting more information to investors as they are bidding so they have good visibility of what is available in the platform. This will be up in the next two weeks.

To be clear - we only fund loans in the platform when there is insufficient investor funds and we fund at the highest rate which is the upper end of the market price. We then pass those directly back to the market for investors to buy.

In your case above you were still in this fractioning mindset. You put two separate orders in for $500. If there were two 2 year loan awaiting rates then this would have worked fine. But there wasn't.

We'd already settled this loan at 9.00% and made it available back to the market. When we settle a loan and pass it back it needs to be funded in totality as we can't continue to split a loan in our system once it has settled.

We know we need to continue to improve how we present this to avoid any confusion so any feedback is appreciated.

Cheers, JB

[JB@Squirrel]

The interest rates and ease of set up are the main attractions for P2P.

Website looks to be fixed now, placed an investment order for a secured loan. Lets see how long it takes to fill.

Does anyone know if there ahs been any marketing by Squirrel?

Hi unhuman,

The borrower side is not an issue at all. We can dial that up and down almost at will. We're being careful to roughly match borrower and investor volumes. Borrowers typically need money fast and investors are slow to invest.

[JB@Squirrel]

Is that fee not expensive? I mean what do the banks charge? I thought p2p was meant to be cheaper than banks? Or is it just easier to get the loan loan on p2p? As far as I recall the interest rates are lower with p2p than banks.

Our fee is a flat $250 for unsecured, same as banks.

Compare that to Harmoney who for a B5 grade loan charge 5.00% of the amount borrowed. On a $20,000 loan that would be $1,000. My view is that fees this high are a breach of CCCFA. Time will tell and it is being looked at by ComCom. Either way I think the fees are high, and in fact higher than even finance companies can legally charge.

I think the real benefit of P2P is to be able to look a little bit more outside the box. There are plenty of good borrowers who don't tick all the bank boxes all of the time.

[JB@Squirrel]

I'm back : ) Just had to make it a bit clearer who I am apparently. Anyway put up a small bio so you know a bit more about me.

You'll have to jump back to page 2 to see my earlier posts which have made it back. I won't repeat here.

So for those of you fascinated by our space you have some very different approaches in market and some fun times ahead trying to make sense of it all.

Harmoney and LendMe are going down the U.S. approach of fractioning / market based approach which typically involves investment banks in the background. Will be interesting to see how LendMe goes without a bank lender behind them initially.

We're going down the U.K. approach of reserving and we're taking it a step further. We are ruling out putting a bank behind the platform. We're confident that people centricity needs to be the driving force behind true disruption. Our approach wont be for those of you who like messing around in spreadsheets for fun but it will appeal to investors wanting it kept easy.

Just remember this sector is in its infancy. As "big" as the sector is, it is tiny in the context of the industry. The consumer finance / high LVR market in NZ is $30 billion. Winners and losers wont be decided for a few years yet.

So how we are different:

1. We are going into this with the intent and goal of not losing 1 cent of investor money - ever. Rate Setter has achieved that in the UK using the same approach that we are taking. Our reputation will hang on our ability to manage the risk within the Reserve Fund and we will publicly disclose everything. That means our interests are aligned with investors and we will rigorously work on credit quality and arrears. In fact as we are seeding the Reserve Fund so we will lose our money first before an investor loses 1 cent. The more lending that is done the more seeding we need to do.

... Interestingly a by-product of this is we have no desire to grow too quickly. We are more interested in operational effectiveness and building scaleable systems and sustainable revenues.

... we will publicly report arrears from day-1 (none yet obviously.) I'm surprised that we have no public disclosure (that I'm aware of) in terms of Harmoney's credit performance. I only see anecdotal evidence from various investor portfolios and some of the loans that are trying to refinance through us at the moment. I'd like to see the industry provide transparency around credit performance and loss rates.

2. Lower borrower fees. Everyone seems to be missing the 5.00% upfront fee (B grade loan) with Harmoney and it looks like LendMe is going down the same path. These are high fees relative to where the bank market is at. If you believe in arbitrage then surely it becomes obvious that the good quality lending gradually flows to the competitive end of the pricing spectrum. In my mind this type of pricing is not sustainable in the long-run if you want to play at the quality end of the market. How does this fit with CCCFA? Guess we'll find out eventually.

3. Systems. You'll be please to know that if a borrower wants a top up we don't need to cancel the existing loan and penalise investors. Top ups are done as new loans - simple. We don't charge a percentage of the amount repaid and do a simple margin. If a loan does repay early we wont ping you with a big charge in fact there's no cost other than the inconvenience of having to reinvest. There's lots of other system differences that will become more obvious next year when we turn up the dial.


What you'll start to see:

We've got a lot more stats and better presentation of those statistics going into the platform over the next two weeks. We want to give more visibility to what's in the system. We recognise that we need to give more clarity around some aspects of the bidding process and the market loans available and bidding. A couple of the things we have to do (like give you the option to invest secured or unsecured) are quirks of the regulations we operate under. In a perfect world we'd be just doing bids and the marketplace loans wouldn't exist separately. We realise this is confusing.

When there is more liquidity in the platform (and we make a couple more IT tweaks) we'll get this nailed down. We want to make investing as easy and seamless as possible.

Next year .... secondary market, interest on the Call Account.

Cheers, JB

[humvee]

Hi Humvee,

We know we still have a bit of work to tidy up the bidding process. Its mostly sorted now with some good changes going through this week. We're now focusing on getting more information to investors as they are bidding so they have good visibility of what is available in the platform. This will be up in the next two weeks.

To be clear - we only fund loans in the platform when there is insufficient investor funds and we fund at the highest rate which is the upper end of the market price. We then pass those directly back to the market for investors to buy.

In your case above you were still in this fractioning mindset. You put two separate orders in for $500. If there were two 2 year loan awaiting rates then this would have worked fine. But there wasn't.

We'd already settled this loan at 9.00% and made it available back to the market. When we settle a loan and pass it back it needs to be funded in totality as we can't continue to split a loan in our system once it has settled.

We know we need to continue to improve how we present this to avoid any confusion so any feedback is appreciated.

Cheers, JB

Hi JB

Good to see you back.

Just wondering why you have locked the maximum interest rate for new orders to 8% when the current average for 2year loans is 8.78% and even the 5 year average which has dropped quite a bit since the 8% cap was put in place is will at 8.08%. Previously you have indicated that bids can be up to o.5% ABOVE average.

Combining this with the details of the loans you are offering back to the market would tend to indicate the maximum should currently be set to between 8.5%-9℅

I would suggest the reason you are short of investors and needing to fund the loans yourself is because you are trying to drag the rates down below what investors are comftable with/expect.

I like you do think that nz p2p interest rates will drop over time but I don't think dragging the market down kicking and screaming is the way to do it. Particularly given by the sounds of it you have plenty of borrowers and not enough investors.

[JB@Squirrel]

Hi Humvee

The $50 payments went through last night so have been honoured to everyone that invested over $1,000 in the platform of which there were a number. I'd have to check whether you're in there. Imagine not but happy to throw you the $50 given you did try as you say.

[JB@Squirrel]

Humvee,

There's no issue with the rate or return. In fact the feedback from investors generally is that the rates are too good to be true. There is over $60 billion of money sitting in retail banks at rates below 3.50%.

The issue is generally apathy - no urgency and education. It will take a while for investors to grasp the Reserve Fund. The obvious inference at this stage is that $100k of reserves is not enough to cover the perceived risk. This will change over time as the reserves grow and we report around the level of arrears. At what level of Reserves do investors perceptions change - $500k? $1m? The point is, it is a number.

There is no shortage of funds for 2 years. In fact we have over supply at that term. No borrowers there as most are going for 5 years and the average loan size is quite high. The 9% money that went out at 2 years was an outlier so misleading. Its why we had to charge the bidding process towards a moving average so we don't get wild swings in rates driven by small rouge bids whilst the platform is still young.

The rate a borrower gets is dictated by the highest accepted bid rate. All investors in a loan get the same rate. For a $10k loan if $8,000 of funding was offered up at 7.50% and $2k was offered up at 8.50% then all investors get the 8.50%. In other words all investors get the benefit of the highest accepted rate.

We don't allow different rates to exist on the same loan as this would get incredibly messy later on. The benefit is that we take a margin rather than a percentage of the repayment (which is computationally much harder to do) but investors don't get pinged on early repayments. Big issue for investors that most don't even realise happens on other platforms. It also means we can introduce a secondary market more easily.

We are a platform. Our ethos is to create a people-centric platform that is safe and genuinely fair. The changes we are making to how the market rate is set was to eliminate excessive gaming when there is a lack of liquidity. That wont be for everyone on this forum where arbitrage is a sport. Over time, and reasonably quickly, it will deliver consistent reliable returns.

[humvee]

Hi Humvee

The $50 payments went through last night so have been honoured to everyone that invested over $1,000 in the platform of which there were a number. I'd have to check whether you're in there. Imagine not but happy to throw you the $50 given you did try as you say.

Thanks - the $50 went through over night

[JB@Squirrel]

A ShareTrader emailed me directly asking about the Reserving and how much of the Borrower Payment goes up to the Reserve Fun, so will briefly cover-off here.

Roughly 3.50% of the rate (26% of gross interest) is paid from the borrower up to the Reserve Fund. Expected losses are dependent on risk grade but running at around 1.20% so we are reserving well above expected credit losses.

For the first year we are maintaining the Fund at 4.00% to ensure it builds up to a respectable balance. If we get to $30m of lending then that will be $1.2m of reserves. Any losses in the first year we effectively take the hit on as we maintain it at 4.00%. After that the borrower contributions and low default rates will continue to grow the reserves on or around the 4.00% mark and that's the level we're targeting to keep reserves at. During periods of high growth particularly early on it might dip below this level and we'll also get some seasonal spikes with short-term arrears.

If the Reserve Fund was depleted (obviously not expected) then we can solcialise any further losses by shaving the investor interest rate on all loans and diverting that up to the Reserve Fund.

If we built up too much Reserves (exceed 4.00%) then we can lower the borrower credit spread. I'm inclined not to do that for a while as we want to be conservative leading into a possible marketing correction sometime in the next 2-3 years.

[winner69]

The way I see it, spliting loans is not required as it doesn't matter which investor holds a loan gone bad as everyone else chips in to cover regardless of the size.

eg there is no difference between me having a 10k loan go bad and splitting that orginal loan 5k each with someone else and it going bad. Everyone else still will be covering the loan payments via loan sheild.

It's basically P2P socialism.

Love that P2P socialism comment

Capitalists would not be too impressed

I have the feeling that corporates are hijacking P2P and that it has now a long away from the original concept of what P2P lending.was meant to stand for.

[whitt]

I would like to deposit $100 a fortnight regularly into my squirrel account.
Is this possible as it mentioned minimum $500.

Also if I did these regular deposits how would I use the funds? Can I order and invest small amounts or would I need to wait and invest larger?

[JB@Squirrel]

I would like to deposit $100 a fortnight regularly into my squirrel account.
Is this possible as it mentioned minimum $500.

Also if I did these regular deposits how would I use the funds? Can I order and invest small amounts or would I need to wait and invest larger?

Hi Whitt,

Our platform wont work that well for you just now. You don't earn interest when the money isn't invested and we have a minimum of $500 for term investments. Better to keep it in a bank Call Account and then transfer over larger amounts when you can.

We're going to launch a few things early to mid next year.

The first is we are going to put interest on money that is in bids put not yet invested. Investors should get some sort of return from the moment they commit funding and not have to wait until we lend it out.

The second is that we will launch a Call Product for regular savers and those needing quicker access to their funds. Once we get this product sorted we can allow smaller transactions into it (like your suggestion.)

Third is that we are introducing a Secondary Market. This is built and we are just waiting on getting an approval from the FMA next year and can then launch it. With the way we allow Investors to sell back to the platform we don't want millions on tiny loans clogging up the system hence have a $500 minimum.

[AppleCrumble]

I have an investment order 500$ sitting there at 9%.it seems I have to lower this to 8% to get it invested? When squirrel say 500$ min investment what do they mean exactly? Can I only provide 100% of the loan for 1 borrower,then the min investment will be whatever the min loan a browser wants?

Have I got that right?

Interesting re p2p socialism. If there is no defaults squirrel will do very well. If there is a lot of defaults,or it gets to a certain point,squirrel will start reducing the investors rate of return.don't think i'm a fan, but each to their own.

[JB@Squirrel]

Hi AppleCrumble.

Yes you may need to change your order to be within the market rates. At 5 year you can go up to 9% but 2 year is currently max 8%. There is currently a $30k loan awaiting funding at 5 years that you could bid 9.00% against.

In terms of the Reserve Fund and P2P Socialism:

First point is Squirrel does not financially benefit from the reserve fund. The Reserves never go back to Squirrel (other than the funds we have tipped in to seed the initial reserves.) The Reserves are held in Trust for investors.

Second point is that if the Reserves were fully depleted then we replenish the Reserves by temporarily reducing the interest paid to investors. In essence this means that any excessive losses are socialised/borne across all lenders. This means investors don't need to be concerned with specific loan selection or even security and that investors are getting the full diversification benefit across the entire lending book. This is a protection mechanism for investors and purely for the benefit of investors. It is a very efficient way of reducing risk.

Cheers, JB

[AppleCrumble]

Tks JB,

I will look at cancelling my order and see if I can get in on the 5 year loan.

What happens the money going towards the reserve fund when the reserve fund reaches 4% of the loan book? I was of the thinking it went to squirrel.

[JB@Squirrel]

Tks JB,

I will look at cancelling my order and see if I can get in on the 5 year loan.

What happens the money going towards the reserve fund when the reserve fund reaches 4% of the loan book? I was of the thinking it went to squirrel.

So, we've seeded the Reserve Fund with some initial money to get it started and we'll continue to top up the reserves to maintain it at 4.00% for the first year. We think we'll need to tip in around $400k. In the meanwhile obviously part of the borrower interest will be getting diverted to the reserve fund and continuing to build it up.

After the first year, and only if reserves allow it, we can pull our seed money back out. (But only our seed money and only to the extent that reserves are over 4.00%.) Personally I don't think we'll be getting it out for a while as the growth rate in the book will mean we'll struggle to get over 4.00% after the first year.

If, at some point in the future, we get to over 4.00% reserves then we'll just keep building it up. The more reserves for investor protection, the better! I don't imagine us ever getting to a point where we say that we have too much reserves.

If we find that we are reserving too much then we'll tweak down the credit premium charged to borrowers and slightly lower the rate we reserve at.

At no time does Squirrel ever have any rights over the Reserve Fund. If Squirrel Money was wound down then any residual reserves after all investors have been paid will be paid to charity which is currently Starship.

[Lewylewylewy]

I'm starting to like the idea of Squirrel over Harmoney.

I've had some big returns from Harmoney (over 10% after tax), but I've got a number of issues with it... The interface is a bit rubbish - I have no idea whats going on with my investments. They don't talk to you. Loans get paid back into their holding account and it's not worth my while to check this every day to see if there's anything to withdraw or reinvest - and I don't get interest on this amount. Finally, I have no way to automatically reinvest.

If Squirrel could make it so that I could have an allocated percentage of money repaid to me, to be automatically reinvested in vetted loans and a percentage automatically paid back into my bank account, this would mean I could use Squirrel to get an income. With the income protection, it would mean that I could tip money into it for a self perpetuating retirement fund giving a return that is above inflation (after tax) with low risk. Automatic reinvestment would also be a good feature to encourage investors and allow Squirrel management to pull reports that could be used to do business forecasting, etc.

You are part of the way there by planning to pay interest on unallocated money. Do the rest and I'll throw a quick $100k into the system as a quick starter with more to come if it plays out nicely.

[unhuman]

Have stopped investing capital into Harmoney. Am getting good returns but the work required plus the risk is too much for me. I will continue to reinvst the interest, but all of my P2P capital will be invested in Squirrel next year.

Should be a lot easier / less stressful.

Edit: just had my first write off with Harmoney, they never made a payment. Reaffirms my plans above.

[JB@Squirrel]

Thanks Lewy,

Like your thinking above and will incorporate it in our next change window for early next year. It fits with our plan to create great retirement/income products.

[JB@Squirrel]

Thanks Lewy,

Really like your ideas and we'll incorporate them into our next change window in March. Fits nicely with our goal of creating world-class retirement/income products.

[Lewylewylewy]

Thanks Lewy,

Really like your ideas and we'll incorporate them into our next change window in March. Fits nicely with our goal of creating world-class retirement/income products.

Cool, do you have a subscription to email me when changes are implemented?

also, how's the secondary market work in Squirrel? I imagine that if you are investing in loans and there's a loan that's been reliably paid off for months, that would be more attractive... But if you have repayment protection, it wouldn't matter so much. Is the advantage for investors that the loan periods are shorter on the secondary market or have I misunderstood what that's about?

[Colgar]

I'm starting to like the idea of Squirrel over Harmoney.

I've had some big returns from Harmoney (over 10% after tax), but I've got a number of issues with it... The interface is a bit rubbish - I have no idea whats going on with my investments.

Bit late to the discussion but I tried joining and couldn't get the verification process to work. Tried about 4 different times with the license and webcam but no dice.

Haven't tried again since.

[Lewylewylewy]

Bit late to the discussion but I tried joining and couldn't get the verification process to work. Tried about 4 different times with the license and webcam but no dice.

Haven't tried again since.

Use a different browser - that's what I had to do :(

[JB@Squirrel]

Cool, do you have a subscription to email me when changes are implemented?

also, how's the secondary market work in Squirrel? I imagine that if you are investing in loans and there's a loan that's been reliably paid off for months, that would be more attractive... But if you have repayment protection, it wouldn't matter so much. Is the advantage for investors that the loan periods are shorter on the secondary market or have I misunderstood what that's about?

WE've already built the Secondary Market. Its just a matter of getting it licensed next year. The purpose of the Secondary Market is to allow investors to invest in longer-term loans (5 YEARS) knowing there is ability to liquidate their investments if they need to.

Essentially an investor can click "Sell my Loan" and we then automatically put the loan back into the market clearing mechanism to be resold. Providing the loan can be matched (rate, amount, term) then it will be cleared out and funds returned to the investor. We intend to go a step further and put some of our capital into a liquidity mechanism that can be used to immediately payout investors in certain emergency circumstances.

Its all designed to help give Investors more flexibility and to address the natural term mis-match that will occur in our business.

[Mickey]

Even with the explanation in an earlier post from the Ops Manager - I'm still finding the 2% fee rather ambiguous. I've just checked the Terms and Conditions on the site and it states the following:

"Service Fee means the fee payable by the Investor and deducted from interest payments made by the Borrower under the Loan Agreement equal to 2% of the outstanding Loan balance per annum as amended from time to time;"

This clearly states that the Investor is responsible for paying a fee. If this is not the case (as per above) - then the T's and C's need to be amended as I'm not prepared to sign up to Squirrel while it is worded this way.

I see that JB is a visitor to this site and so perhaps an authoritative statement from Squirrel could be provided here regarding this.

[JB@Squirrel]

Hi Mickey

I know this is a bit of a pain on the wording and something we've debated and continue to debate with our lawyers.

As for Authoritative statement here goes ...

The Borrower interest rate is determined by taking the investor rate plus a risk premium (specific to the riskiness of the loan that is paid into the reserve fund) and our platform margin of 2.00% per annum.

The 2.00% margin along with a risk levy are deducted from the gross borrower repayment each month and the balance paid to the investor. Both are a % of the loan outstanding and deducted prior to paying the investor.

The rate an investor signs up for when they invest is the interest rate they receive. There are no deductions from this. Currently this is sitting between 8.00% and 9.00%.

We have a number of improvements we're putting around this over the next month to simplify our bidding processes and I'll look to further tidy this disclosure up at the same time.

Hope this clarifies.

Cheers, JB

[Mickey]

Hi Mickey

I know this is a bit of a pain on the wording and something we've debated and continue to debate with our lawyers.

As for Authoritative statement here goes ...

The Borrower interest rate is determined by taking the investor rate plus a risk premium (specific to the riskiness of the loan that is paid into the reserve fund) and our platform margin of 2.00% per annum.

The 2.00% margin along with a risk levy are deducted from the gross borrower repayment each month and the balance paid to the investor. Both are a % of the loan outstanding and deducted prior to paying the investor.

The rate an investor signs up for when they invest is the interest rate they receive. There are no deductions from this. Currently this is sitting between 8.00% and 9.00%.

We have a number of improvements we're putting around this over the next month to simplify our bidding processes and I'll look to further tidy this disclosure up at the same time.

Hope this clarifies.

Cheers, JB

Thanks JB - appreciate you taking the time to respond

[humvee]

This Was Just sent out in the Squirrel News letter today

https://www.squirrelmoney.co.nz/market-place/



This here is old - but I had not found it before today


https://www.squirrelmoney.co.nz/credit-risk-report-month-1/

its interesting to see that only 10.5% of their loans are secured

[JB@Squirrel]

Hi Humvee,

The secured loans are now up to 17% of the book. 90% of the book are A or B grade. Also 44% of the borrowers own their own home even if we haven't taken security. (We only take security if the loan is over $30k.) And there are currently no arrears on the book (as at today) which although a young book is good after Christmas. We'll post another Credit update to the web site shortly.

[JB@Squirrel]

Feedback Please

We've got a few changes we are wanting to put through in March that I want to check with you guys.

1. We're going to pay interest on the Call account. Funds are sitting inside a Trust so will only attract bank type interest rates. We're thinking 3% on balances up to $100,000. That way you get bank type interest even when your funds aren't invested.

2. The ability to set up a regular/automatic withdrawal. It will only be a simple one - for example you can set up to withdrawal $600 per month. It will go through provided there is sufficient funds in your Call Account. That way investors can set up their investments to provide regular income.

3. More information on what is in the pipeline. We're conscious there's not enough visibility of the loans coming through and what's going to be available as well as what other bids are sitting in the system. We're going to provide a lot more information so investors can better target loans coming through and get a better sense of how quickly they can invest.

4. Limited secondary market. You'll be able to sell a loan back to the platform at face-value provided we can match it with an investor happy with the remaining term and rate. This is already built but we are waiting on the FMA to approve. Would this be a big deal if we get it over the line?

Next Up

What other features would be useful / valuable for you?

[humvee]

Feedback Please

We've got a few changes we are wanting to put through in March that I want to check with you guys.

1. We're going to pay interest on the Call account. Funds are sitting inside a Trust so will only attract bank type interest rates. We're thinking 3% on balances up to $100,000. That way you get bank type interest even when your funds aren't invested.

2. The ability to set up a regular/automatic withdrawal. It will only be a simple one - for example you can set up to withdrawal $600 per month. It will go through provided there is sufficient funds in your Call Account. That way investors can set up their investments to provide regular income.

3. More information on what is in the pipeline. We're conscious there's not enough visibility of the loans coming through and what's going to be available as well as what other bids are sitting in the system. We're going to provide a lot more information so investors can better target loans coming through and get a better sense of how quickly they can invest.

4. Limited secondary market. You'll be able to sell a loan back to the platform at face-value provided we can match it with an investor happy with the remaining term and rate. This is already built but we are waiting on the FMA to approve. Would this be a big deal if we get it over the line?

Next Up

What other features would be useful / valuable for you?

1) Can you confirm if you do this that money that is tied up in orders waiting to be filled will also earn interest? if so this will help.

Although I would still like you to consider implementing my earlier suggestion to you(via email). The issue is orders partially for 2 and 3 years can take along time to be filled while waiting for this to happen the money is sitting idle what makes it worse if you investing across all loan terms you need to have orders in place for all 3 terms and 3X as much money idle.

What I would like to do is if say I have $1000 in my call account I would like to be able to place 3 orders for $1000 - once the 1st order is filled(or allocated/pending) the other 2 orders go on hold and I get an email so I could potentially deposit more money activating the orders again

Eg if I have $1000 in my call account I might place orders for the following

$1000@8% for 2 years
and
$1000@8.5% for 3 years
and
$1000@9% for 5 years

I realize there is a risk I could miss out on a loan if 2 loans meeting my requirement become available at once causing one of my orders to go on hold but that is a risk i will take - The current problem is returns is being dragged down by idle money tied up in orders - at times Ive had twice as much money tied up in orders as I actually had in investments - right now its still at around 50%. even at 50% this turns a 9% return into a 6% return so is quite a drag on the return

2) this is a good idea - but not something i will use in the foreseeable future

3) Yes - Squirrel Money does offer the least information about the loans of all 4 P2P platforms in NZ

4) I might use this feature and it would be good to know its an option. I might more likely be buyer rather then seller


For me by far the the biggest improvement would be what I have suggested for #1

[humvee]

Hi Humvee,

The secured loans are now up to 17% of the book. 90% of the book are A or B grade. Also 44% of the borrowers own their own home even if we haven't taken security. (We only take security if the loan is over $30k.) And there are currently no arrears on the book (as at today) which although a young book is good after Christmas. We'll post another Credit update to the web site shortly.

Thanks JB
Thats good to hear - ill look forward to the next update

[humvee]

I just decided to run some numbers (and noticed there is no option to export transactions) to see how bad the idle money drag is

My current Average interest rate invested at shows as 8.93%

If I dont count the one off bonus $50 as part of my return my actual return before tax so far is just 1.32% pa
If I do include the bonus $50 as part of the return then this climbs to 7.27% pa

I have always had less then $500 in my call account - the money has been tied up in orders

Either way it shows the idle money drag is huge, interest on this would help, but being able to have less idle money would be even better.

[unhuman]

Feedback Please

We've got a few changes we are wanting to put through in March that I want to check with you guys.

1. We're going to pay interest on the Call account. Funds are sitting inside a Trust so will only attract bank type interest rates. We're thinking 3% on balances up to $100,000. That way you get bank type interest even when your funds aren't invested.

2. The ability to set up a regular/automatic withdrawal. It will only be a simple one - for example you can set up to withdrawal $600 per month. It will go through provided there is sufficient funds in your Call Account. That way investors can set up their investments to provide regular income.

3. More information on what is in the pipeline. We're conscious there's not enough visibility of the loans coming through and what's going to be available as well as what other bids are sitting in the system. We're going to provide a lot more information so investors can better target loans coming through and get a better sense of how quickly they can invest.

4. Limited secondary market. You'll be able to sell a loan back to the platform at face-value provided we can match it with an investor happy with the remaining term and rate. This is already built but we are waiting on the FMA to approve. Would this be a big deal if we get it over the line?

Next Up

What other features would be useful / valuable for you?

Currently happy with the service.

The above updates all sound excellent.

3% in a call account sounds quite generous, barely get that in a bonus saver cash PIE on current rates.

If the secondary market ever gets approved then I would be willing to invest much more than I currently am thanks to liquidity concerns on 5 year loans.

[JB@Squirrel]

I just decided to run some numbers (and noticed there is no option to export transactions) to see how bad the idle money drag is

My current Average interest rate invested at shows as 8.93%

If I dont count the one off bonus $50 as part of my return my actual return before tax so far is just 1.32% pa
If I do include the bonus $50 as part of the return then this climbs to 7.27% pa

I have always had less then $500 in my call account - the money has been tied up in orders

Either way it shows the idle money drag is huge, interest on this would help, but being able to have less idle money would be even better.

Thanks for the feedback.

The way you are investing is causing the issue and drag for you - i.e. $500 bids. The issue is two-fold and we know how to fix them.

First issue is that we don't give visibility to loans going through the approval process (so you can't see what's coming and target that effectively.)

Second issue is that we are jumping in too quickly to fill loans (underwrite) if there are not enough active bids in the platform. When we do that we have been doing that in $2,500 increments which means that none of those would be available to you. (Note that we bid at the highest rate. Once we take part of a loan, then an investor needs to be bidding $2,500 to take it off us.) We set it at $2,500 so that investors didn't end up with too many loans when bidding say $50,000. Now that investors are fairly active on the market we are not having to fill up many loans which is why there aren't that many showing "on the market."

What we are implementing to fix your issue is (1) we'll delay jumping into a loan for 24-48 hours (2) when we do jump in we're dropping our investments to $500 lots to match the minimum on the platform and (3) we'll increase the amount of information you can see when bidding so you know whats heading down the pipe and what bids you're up against.

We have some larger investors in the platform who have next to no drag, but we know we have an issue with the lack of visibility of the pipeline and the bidding process especially for new investors coming into the platform. Those active on it are literally buying up everything as it comes through.

Once we get through these next changes we'll be able to up the velocity on the loans coming through.

Also in the March changes - the interest on the call account will also apply to balances that are currently in bids.

Cheers, JB

[humvee]

Thanks JB. This things combined with earning interest on money tied up in bids/orders sounds like a good solution.

[Baa_Baa]

I just want to say that I think this is a terrific example of a pro-active approach to informing investors having JB@Squirrel directly involved in the forum, taking feedback, offering suggestions, informing on future features and updates to the platform. I wish every company took as much care to keep in touch with their investors. If I'm not mistaken, JB@Squirrel might be the only one who bothers to engage their investors in this way .. well done, superb effort.

[Lewylewylewy]

Most useful feature for me would be a button to get my forgotten password so I can log in ;)

Doesn't seem to be one on the mobile

[mlt322]

I just want to say that I think this is a terrific example of a pro-active approach to informing investors having JB@Squirrel directly involved in the forum, taking feedback, offering suggestions, informing on future features and updates to the platform. I wish every company took as much care to keep in touch with their investors. If I'm not mistaken, JB@Squirrel might be the only one who bothers to engage their investors in this way .. well done, superb effort.

Actually, I did raise this fact with Mark Bardi at Harmoney and asked why they didn't get onto the forum as well. As you point out, it is certainly a great way to connect with current and future customers.

Mark tells me that the Sharetrader administrators (if that's what they are called) asked them not to. This was before the other P2P companies had hit the market. He didn't say why but I suspect that they didn't want a company pumping its services on the forum.

He said that they have considered adding comment on here in light of JB's entry to the discussion but have since set up their own blog and also send out regular newsletter. I assume this is now their preferred method of communication.

I hope I have got that all correct and hopefully it adds some clarity.

[RGR367]

Invested just a little amount today so as to try this out. Drawn to it after reading and/or comparing the chats on Harmoney. But I will also invest on Harmoney for diversification (sic) a bit later. May we all live long and prosper :t_up:

[Kelvin]

Hi, dumb newbie question I wanna clear up:

I just invested my first $500 for 5 years at 9% to try Squirrel Money out. Is interest calculated by (ignore tax):

A) based on the outstanding principal each month?
Putting this into a loan calculator I get $622.75 back at the end of the 5 year term. That's $24.55 interest per year and only a 4.9% return on the $500??

OR

B) calculated based on total loan?
That results in $500x9% = $45 per year, so you are earning a whole 9% on your 5% per year.

I think A is correct as you receive part of the principal back every month - but the problem is that you can't reinvest this as easily on Squirrel unlike Harmony's $25 units.

Once again, sorry for the dumb question. Thanks for your help.

[JB@Squirrel]

Not a dumb question. Yes - as it is a personal loan you'll get P&I back each month on your investment. With a $500 investment it will be roughly $10 per month. Initially that will be mostly interest.

You're right that with a minimum bid in our platform of $500 you cannot reinvest small returns and that will lower your effective interest rate. You'd need to be regularly investing $500 into the platform to maximise your return or have a larger amount invested.

[JB@Squirrel]

Woop woop. Heard it here first.

We've had our SECONDARY MARKET approved and will hopefully have it live later this month as it's already built. The Secondary Market will allow investors to sell their loans back to the platform at face value provided we have an investor on the platform who is happy with the rate and remaining term.

[Kelvin]

Not a dumb question. Yes - as it is a personal loan you'll get P&I back each month on your investment. With a $500 investment it will be roughly $10 per month. Initially that will be mostly interest.

You're right that with a minimum bid in our platform of $500 you cannot reinvest small returns and that will lower your effective interest rate. You'd need to be regularly investing $500 into the platform to maximise your return or have a larger amount invested.

Thanks JB. Any news on earning interest on the call account? This will somewhat help with my reinvestment problem.

And congrats on the secondary market approval!

[unhuman]

Woop woop. Heard it here first.

We've had our SECONDARY MARKET approved and will hopefully have it live later this month as it's already built. The Secondary Market will allow investors to sell their loans back to the platform at face value provided we have an investor on the platform who is happy with the rate and remaining term.

Thats awesome!

[Knot]

Woop woop. Heard it here first.

We've had our SECONDARY MARKET approved and will hopefully have it live later this month as it's already built. The Secondary Market will allow investors to sell their loans back to the platform at face value provided we have an investor on the platform who is happy with the rate and remaining term.

That is good news, I might have to see if I can jump through enough hoops to finally get my account fully active.

[Snow Leopard]

I have an email from Snowball effect that Squirrel Group is looking for $5m in expansion capital:

"The capital will be used to grow the mortgage broking business and develop the peer to peer lending business. This is likely to be the last capital that Squirrel raises prior to an anticipated listing"

Best Wishes
Paper Tiger

[RGR367]

I have an email from Snowball effect that Squirrel Group is looking for $5m in expansion capital:

"The capital will be used to grow the mortgage broking business and develop the peer to peer lending business. This is likely to be the last capital that Squirrel raises prior to an anticipated listing"

Yup. They already have the Investor presentation last Tuesday. Those who missed it and interested can watch a video here https://www.youtube.com/watch?v=yc-e6ubdc6Q&feature=youtu.be The document though for interested investor is still being readied.

[777]

Well if Harmoney was to do the same now , which one would you put your money on? Track record and the like.

[Snow Leopard]

Well if Harmoney was to do the same now , which one would you put your money on? Track record and the like.

We have a real world situation here and you you go off to la-la-land ?

When the docs come out I will give them serious look.

Thanks RGR367 for the useful post

Best Wishes
Paper Tiger

*The Walrus and The Carpenter (http://www.jabberwocky.com/carroll/walrus.html)

[unhuman]

Not really comparable as the majority of Squirrels valuation is on the mortgage business.

[Harvey Specter]

Not really comparable as the majority of Squirrels valuation is on the mortgage business.Agree - $20m valuation for mortgage business, $3m valuation for technology platform of P2P business. Both have different growth profiles and I imagine in a few years, they could be even, if they get their P2P right.

interestingly a NZX listing needs a market cap of >$40m and a decent spread of shareholders. Crowdfunding gives them a good spread and with a $23m pre valuation and a $5m raise, they aren't that far of the needed market cap, especially if they do a small raise as part of the IPO. As such, it has a potential liquidity event in about 12m which is beneficial compared to some of the earlier stage investments (where they could be very successful but you have no way to access your paper profits).

[JB@Squirrel]

@Knot. Drop me an email if you have any issues. Should be ok these days. We are using Jumio for ID and that can be a bit sensitive / clunky. john@squirrel.co.nz

@Kelvin. Interest on call account is built. Just waiting on tidying up a couple of issues and will deploy in our next update (either end of March or end of April).

We'll only be able to pay out whatever interest we earn on the underlying Trust bank account otherwise it constitute another product and we'd need to go through lots of hoops to do that. We're looking at an on-call investment product but that will be a way off still.

[Kelvin]

The Snowball crowdfunding offer document went out on Friday, anyone have any thoughts?

The mortgage business seems solid and they appear to have a really good brand and reputation - probably one of their biggest strengths.

Squirrel Money will require a lot of hard work to build a higher volume of investors and borrowers with P2P being relatively new here and Harmony being the dominant player. The platform seems pretty quiet for now, and I'm waiting to see how it develops before investing more.

Overall seems like they are going in the right direction and I'm tempted to contribute a little bit into the crowdfunding and see how it goes :t_up:

[Harvey Specter]

Kelvin - was the the private offer to their customers? I haven't seen the wholesale offer come through yet.

One concern I have is there is no cross over in customer base to tap. If you have a mortgage through them, you'd hope they would refinance you rather than send you of to P2P, and if you have a mortgage, you shouldn't be investing. As such there mortgage customers will only become P2P customers in 20-30 years.

Plus I know the loans are lower risk but the returns, after write offs is higher on Harmoney.

[Kelvin]

Yes, the private offer.

Speaking about the crossover in customer base, they actually mention that Squirrel Money can "leverage off our Squirrel Mortgages business"

Not sure how specifically, but I've seen plenty of borrowers on Harmoney who are listed as paying a mortgage, so maybe there is some crossover?? And I'm sure their brand helps.

[Harvey Specter]

but I've seen plenty of borrowers on Harmoney who are listed as paying a mortgage, so maybe there is some crossover?? And I'm sure their brand helps.If they had a mortgage, they wouldn't be paying Harmoney interest rates if they had a good mortgage broker. They'ed just refinance.

[Lewylewylewy]

I like the idea of investing in people who own their house. I choose to believe that such people are capable of saving (because they've bought a house) but just aren't money smart enough to get a top up mortgage. The fact they're borrowing any money at Harmoney rates immediately tells me that they're not money smart.

Sometimes I wish I could set up a business managing peoples money and just taking a cut of what I could save them - I think I'd be a very rich guy doing this.

[Lewylewylewy]

Is it this month that Squirrel is releasing the system to auto invest repayments back into a percentage of loans? Is that still in the development pipeline?

[JB@Squirrel]

Is it this month that Squirrel is releasing the system to auto invest repayments back into a percentage of loans? Is that still in the development pipeline?

Hi Lewy

No not auto-reinvesting. Not yet.

The upcoming change window (end of March) has reoccurring payment. This is the option to set up a regular payment out of the platform for those wanting to synthesize some level of income.
We've also got some big improvements going into the investor bid process and we're delaying how quickly we jump into fund loans from 24 to 48 hours to give investors more time to jump on live loans.

In April we are ...

Putting interest on the call account (will be roughly OCR - 0.60% so 1.65%)
Launching the secondary market

[Kelvin]

Hi JB, is the upcoming "improved investor bid process" going to show what interest rate I need to bid at in order to get it accepted?

Had a 36 month loan listed today so I put a $500 bid in at 8.5%. But had no luck and now my $500 continues to sit idle in my account. If the platform showed more info such as the indicative interest rate for that loan, I could have reduced my desired interest rate to match that or decided to cancel the bid altogether.

[JB@Squirrel]

Yes it does. Its actually up on live at the moment but hidden. If you send me an email I'll send you the URL and you can give me some feedback.
Cheers, JB

[RGR367]

Was thnking of becoming their investor earlier via Snowball but decided not to be in the end. I got a lot of HBL shares already so having another "financial" is just having too many exposures on that sort of area. Besides, they already got my money on 2, 3 and 5 years loans. So far, I'm impressed with their email service and my Dashboard. "Risky Lending" (sic) has just become easy DIY :)

[Kelvin]

Wow, took almost 4 days from my $500 being matched to a loan (Friday afternoon) until drawdown (this morning). Slow borrower or slow system?

[Kelvin]

Have had a bit of trouble with Squirrel recently. Firstly I got matched with a loan pretty quickly which was great, and the loan quickly progressed to some "awaiting drawdown" stage. Unfortunately the loan never passed that stage so it was cancelled.

Luckily I was matched with another loan soon after, but now that's cancelled too (never got past the first stages). Perhaps there's something on the borrower side that's not working very well and causing them to not complete the whole borrowing process?

[JB@Squirrel]

Hi Kelvin,

The way it works is that as a loan is approved it goes to awaiting funding. The platform takes all available bids to fill the loan. As soon as it has funding it goes back to the borrower to accept the rate and then through to documentation. A loan will stay in awaiting funding for up to 2 days before we top it up with our funds (at the highest rate.) We haven't needed to fund loans for a while with plenty of investor funds coming through.
Generally investors will fill up a loan in 24 hours and then the borrower has 24 hours to accept it and 24 hours to complete documents. It is unusual for a borrower to not accept the rate but does happen usually because they miss the 24 hour cut-off. We'll have a look at whether there is something we can improve to tighten it up more.

We're seeing about $500,000 of investor funds going in monthly now and are ramping up our borrowing activity. Noting of course we mostly do A and B grade loans and that we're 100% retail funded. Our near term target is to do $1m of borrowing each month and have just started our first borrower campaign. The one reminder I'd throw into the mix is that you don't need to invest 'fractions' with the platform. In a way you'd be better to throw in $5,000 and have it all invested relatively quickly. A lot of investors are now doing it $5,000 at a time.

Cheers, JB

[Chickens]

About 4 hours ago I created a Squirrel order, and now I can't. I've tried 3 different browsers.

Has anyone else noticed this, or is it just me . . .

gc

[Chickens]

I've just created a new Squirrel order - not sure why I had been unsuccessful for the last 3 hours.

[JB@Squirrel]

I've just created a new Squirrel order - not sure why I had been unsuccessful for the last 3 hours.

Hey Chicken,

Sorry we did a bug deploy today that created another UX error. Now fixed and we've changed process to make sure that doesn't happen again.

Cheers, JB

[morphs]

Hi JB,

Will the platform make a partial investment of an investment order? For example, if I place an investment order of $10K, do I need to wait for a loan of $10K or greater to become available or will the platform use my funds to fill a $5K loan order?

[JB@Squirrel]

Hi JB,

Will the platform make a partial investment of an investment order? For example, if I place an investment order of $10K, do I need to wait for a loan of $10K or greater to become available or will the platform use my funds to fill a $5K loan order?

Good question. We should make that clearer. We're in the process of doing some videos to explain the bidding process better.

If you bid say $10,000 that could go into 1 or many loans. Say a loan of $10,000 is already funded for $8,000 then $2,000 would go into that and then your bid would go hunting for another loan. If the next loan was say $15k it would put the remaining $8k in that.

Basically a bid keeps going until it allocated out your whole amount.

Also worth noting that the number of loans is irrelevant from a risk perspective. The credit risk is managed centrally through the reserve fund so there is no financial difference if it's all in one loan or in ten.



The biggest bid/order so far was $50,000 which ended up across 10 loans.

[Kelvin]

Great, finally got my money invested into some loans. One of them spent over a day in the "Awaiting Drawdown" stage though.

Good to see a higher volume of loans coming through recently, but sadly my funds available for investing are limited :(

[humvee]

There has been a fair bit more activity on Squirrel Money the last day or two which is good to see.

[humvee]

There has been a fair bit more activity on Squirrel Money the last day or two which is good to see.

Theres a 100K+ 5 year Secured loan comming through now - judging by the bids it should fill at 9% - almost all 5 years have ended up at this rate so far.

[unhuman]

Has anyone else had an increase in early repayments lately?

Hopefully these guys can implement some sort of auto email script when early repayments occur over a preset amount.

It's one thing to get early repayments on $25 loans in Harmoney, but it is a little annoying logging in to find thousands of dollars sitting in the cash management account due to early repayments.

Has been happening for the last couple of months.

Now I feel that I need to constantly log in every couple of days to make sure my capital is actually being applied.

I did mention this in the survey they did a couple of months back, I assume they have been too busy with the share offer to work on the system - which would be fair.

[shar187]

Has anyone else had an increase in early repayments lately?

Hopefully these guys can implement some sort of auto email script when early repayments occur over a preset amount.

It's one thing to get early repayments on $25 loans in Harmoney, but it is a little annoying logging in to find thousands of dollars sitting in the cash management account due to early repayments.

Has been happening for the last couple of months.

Now I feel that I need to constantly log in every couple of days to make sure my capital is actually being applied.

I did mention this in the survey they did a couple of months back, I assume they have been too busy with the share offer to work on the system - which would be fair.

Interesting, I was only just thinking earlier in the week how I haven't had any early repayments unlike Harmoney yet I would have expected more being A and B loan grades that some may have only required lending for short term. I have a fair few active loans since starting to invest beginning of December and I had the first one make an early repayment yesterday. It's not the full amount either, only about a third so I'm not too fussed just yet but it would be good if they activate as you mention an automated email or reinvest option.

I have found them to be excellent in responding when I ask questions, you could try asking if they have plans for notifying of such.

[Kelvin]

Very quiet this past week, barely any loans and lender funds piling up. All of my loan investments so far have been at the maximum interest rate, but this will most likely change as investors start to bid lower.

Might skip Squirrel this month and invest in Investore instead :p

[Kelvin]

Decided to go ahead with my monthly $500 deposit into Squirrel. Got matched to a 5 year loan at 8.5% pretty quickly after I put in a bid at 8.45%

So although not very visible, it seems like the loans are still coming through

[unhuman]

Got an email today telling me that a loan of mine has been paid off and that the funds are sitting in my call account ready to be reinvested.

Thus it seems they now do have an auto email system setup in place. Very good.

[humvee]

The interesting thing with squirrel is there is actually nothing to talk about. Returns are not quite as high but are more stable. And are still good.

There no write offs or arrears. It just ticks along

[Kelvin]

Yeah, I'm happy with Squirrel so far and have been adding in funds every month. Your repayments come on time on the due date so it's very stable and no arrears to worry about.

Although still no secondary market or interest on the on call account, two of the features that were due a few months ago.

[AndyKiwi]

Thumps up to Squirrel Money for starting AutoBid function! No news about secondary market, anyone know anything about it?

[AndyKiwi]

Woo Hoo! Secondary market is here!

[unhuman]

Between their automated email system detailing when large one off principal payments have been made and now autobid, these P2P funds basically look after themselves.

There is literally nothing I have to do anymore.

Not a huge fan of how little info there is on the loans available to be filled, however with autobid I guess it doesn't matter anymore.

Will be interesting to see if they separate out the secondary market loans from new ones. One only assumes this will make Squirrel more popular now that funds are (reasonable) liquid. Hopefully they are actively promoting this as a competitive advantage along with the reserve fund model as points of difference compared to the other providers.

The only thing I don't like is how only 10 lines of data are displayed on any one page, be it transaction statements or the investments. Seems silly to limit like this, I want to be able to see all of my investments on one page and not mixed in with all the repaid loans.

Otherwise both the IT and product offered from the investor side seems very good.

[AndyKiwi]

Between autobid and their automated email system detailing when large one off principal payments have been made, these P2P funds basically look after themselves.

There is literally nothing I have to do anymore.

Not a huge fan of how little info there is on the loans available to be filled, however with autobid I guess it doesn't matter anymore.

Will be interesting to see if they separate out the secondary market loans from new ones.

The secondary market loans are appearing separate in the market. There is currently one 2 year and one 5 year for sale. The bids appear as bars going upwards, while the secondary market loans appear as bars going down.

[Kelvin]

But I can't seem to see the remaining term of those 2 and 5 year loans up for sale?

[AndyKiwi]

But I can't seem to see the remaining term of those 2 and 5 year loans up for sale?

Correct! I will email them and see what they say about this. Good observation.

[Chickens]

The only thing I don't like is how only 10 lines of data are displayed on any one page, be it transaction statements or the investments. Seems silly to limit like this, I want to be able to see all of my investments on one page and not mixed in with all the repaid loans.

You can append "?pageSize=100" to the end of the Investments URL to see 100 loans.

e.g. https://app.squirrelmoney.co.nz/entities/123/investments?pageSize=100 (where 123 is your investor number)

If that's useful then create a bookmark for Ron.

(later Ron.)

[unhuman]

You can append "?pageSize=100" to the end of the Investments URL to see 100 loans.

e.g. https://app.squirrelmoney.co.nz/entities/123/investments?pageSize=100 (where 123 is your investor number)

If that's useful then create a bookmark for Ron.

(later Ron.)

Thank you!

[AndyKiwi]

But I can't seem to see the remaining term of those 2 and 5 year loans up for sale?

Ok. I emailed them. They said that this is clarified in their investor booklet on page 14. It says:

"A new investor will be automatically matched to and transferred an investment that is being sold if their investment order matches the amount and interest rate. The term remaining of the investment to be sold must be within 3 months of their requested term for 24 month and 36 month investment orders (12 months for 60 month investment orders). For example, this means a new investor with an investment order of 36 months will be automatically matched to an investment being sold with 34 months remaining. An email will be sent to a new investor to accept or decline an investment when the remaining term on an investment that is for sale is outside this tolerance."

They also said that they will be looking at displaying the term in future. Sounds good to me.

[humvee]

The secondary market loans are appearing separate in the market. There is currently one 2 year and one 5 year for sale. The bids appear as bars going upwards, while the secondary market loans appear as bars going down.

So loans are always sold at exactly face value ?

It could be hard to sell some loans at face value quickly or at all. Eg 5 years @ 8% when there are alot of new loans going for 8.5 or 9%

What would happen if interest rates rise - you would not be able to sell loans without discounting - which I dont think you can do.

[AndyKiwi]

So loans are always sold at exactly face value ?

It could be hard to sell some loans at face value quickly or at all. Eg 5 years @ 8% when there are alot of new loans going for 8.5 or 9%

What would happen if interest rates rise - you would not be able to sell loans without discounting - which I dont think you can do.

That's right about loans being difficult to sell at lower interest rates. But you never know, someone might not want to waste time in the bidding process and might still buy the loans at a lower rate especially if the bank interest rates are waaay lower. However, the loans with higher interest rates of say 9, 8.9, 8.95 etc could be lapped up in no time.

At least this is a start and a facility to bail out if required. No other company has it yet. So well done Squirrel Money! I am sure improvements will keep coming over time.

[Saamee]

After sending Funds to SM ( from ASB to ASB ) how long before Funds get Credited to your SM Account?

[AndyKiwi]

Any funds sent before 12 midnight are deposited next day early morning.

[Saamee]

Any funds sent before 12 midnight are deposited next day early morning.

Cheers AK - Just sent my first funding across!

[AndyKiwi]

Once the money is deposited in your account, they send out an automated email to let u know.

[Kelvin]

Cheers AK - Just sent my first funding across!

Good luck. A bit of congestion right now with investor funds piling up and not many loans coming through.

[morphs]

Good luck. A bit of congestion right now with investor funds piling up and not many loans coming through.
I've been with Squirrel for a while and so far pretty happy with the way things are going. I have a slight concern that if investor funds are significantly higher than approved loans, they might relax their credit approval standards to get the funds away. I'm not sure if anyone from Squirrel reads this, but if so it would be good to hear how this situation will be handled.

[Kelvin]

I've been with Squirrel for a while and so far pretty happy with the way things are going. I have a slight concern that if investor funds are significantly higher than approved loans, they might relax their credit approval standards to get the funds away. I'm not sure if anyone from Squirrel reads this, but if so it would be good to hear how this situation will be handled.

The interest rates on Squirrel are determined by the market so too many investors and few borrowers means investors bid lower and rates fall to attract borrowers. Opposite happens if too few investors.

The current minimum and maximum rates for 5 year loans are 8% and 9%, perhaps these rates will be adjusted if investor funds keep building up.

[morphs]

The interest rates on Squirrel are determined by the market so too many investors and few borrowers means investors bid lower and rates fall to attract borrowers. Opposite happens if too few investors.

The current minimum and maximum rates for 5 year loans are 8% and 9%, perhaps these rates will be adjusted if investor funds keep building up.

Thanks Kelvin. Yes, I understand that. However, as far as I am aware, the approval of borrowers is not dependent on the market interest rate. We, as investors, have no control over the credit checking process used by Squirrel. That's true for all P2P lenders I guess, but with the other companies investors are taking on the risk of individual loans. In the case of Squirrel, if they were to reduce their credit checking standards to let more potential borrowers through the gate, it could potentially affect the entire loan book. I am not saying that they would do this, just highlighting it as a potential risk.

[kiwi_on_OE]

The interest rates on Squirrel are determined by the market so too many investors and few borrowers means investors bid lower and rates fall to attract borrowers. Opposite happens if too few investors.


One of the reasons I'm not too keen on lenders setting the rate, is that there may be enough people to drive the rate down too low. And as much as I'd like to be, I'm not an expert at determining the appropriate interest rate, so may follow the herd.

[Kelvin]

Thanks Kelvin. Yes, I understand that. However, as far as I am aware, the approval of borrowers is not dependent on the market interest rate. We, as investors, have no control over the credit checking process used by Squirrel. That's true for all P2P lenders I guess, but with the other companies investors are taking on the risk of individual loans. In the case of Squirrel, if they were to reduce their credit checking standards to let more potential borrowers through the gate, it could potentially affect the entire loan book. I am not saying that they would do this, just highlighting it as a potential risk.

Keep an eye on this page: https://www.squirrelmoney.co.nz/our-borrower-profiles/

Currently 80% of applications declined, and ~87% of the loan book are A or B grade.

Very frustrating today, got matched to a 5 year 8.5% loan only for the borrower to not accept it :cursing:

[Saamee]

Keep an eye on this page: https://www.squirrelmoney.co.nz/our-borrower-profiles/

Currently 80% of applications declined, and ~87% of the loan book are A or B grade.

Very frustrating today, got matched to a 5 year 8.5% loan only for the borrower to not accept it :cursing:

Kelvin,

I tired making my 1st loan yesterday - dialed in a 9% return and nothing got matched.

I could see other investors wanting lower rates ( 8.5% and up )

So as a 1st timer to me it looks rather like a 'Game of Chicken' crossed with a 'Dutch Auction'! Would this be correct?

[Kelvin]

Kelvin,

I tired making my 1st loan yesterday - dialed in a 9% return and nothing got matched.

I could see other investors wanting lower rates ( 8.5% and up )

So as a 1st timer to me it looks rather like a 'Game of Chicken' crossed with a 'Dutch Auction'! Would this be correct?

That's right, borrowers aren't gonna match with your funds at 9% when they could get cheaper funds at 8.5%. Lowest bidders get their funds matched first. So people who bid at 8% will get a match first, even if the loan ultimately ends up being filled at 8.5%.

I see it as working similar to selling shares

[whitt]

That's right, borrowers aren't gonna match with your funds at 9% when they could get cheaper funds at 8.5%. Lowest bidders get their funds matched first. So people who bid at 8% will get a match first, even if the loan ultimately ends up being filled at 8.5%.

I see it as working similar to selling shares
Is there a way of seeing what the spread of historic stats/rates accepted for each grade have been?
No point in me offering a rate if its way off what historically gets accepted

[Kelvin]

Is there a way of seeing what the spread of historic stats/rates accepted for each grade have been?
No point in me offering a rate if its way off what historically gets accepted

Doesn't seem to be. But right now there is only a 1% difference between lowest and highest Investor rates e.g. 8%-9% for 5 year terms, so any bids you make aren't going to be way off the historic rates. These rates remain the same for each grade.

The interest rate the borrower pays is calculated differently though - they pay the rate offered by the investor + margin for Squirrel (2% I think) + risk levy which is paid into the reserve fund. Risk levy depends on grade with Ds, Cs and Bs paying more than As

[Kelvin]

This week I've been matched with 3 loans.

8.45% for 5 years
8.50% for 5 years
8.00% for 3 years

[Kelvin]

There's a $29,250 3 year loan up for funding.

Barely any bids for the 3 year term so this should fill at the top rate (8.5%)

[Kelvin]

Just heard an ad for Squirrel Money personal loans on Spotify! Hope to see more borrowers here

[lawson]

There's a $29,250 3 year loan up for funding.

Barely any bids for the 3 year term so this should fill at the top rate (8.5%)

Thanks so much for this I switched my bid to 3 years and was able to get some money invested in to this thanks to you!

Just a quick question from a newbie - how do you see other bids. I can see mine and I can see what's in the pipeline for the various terms but I haven't figured out how I see how many bids etc. I went into the borrowing screen to see how much money is waiting for investment and thought I might have to wait sometime before getting my money invested.

I am new to p2p and am only on Squirrel because I prefer the 1.9% they set aside against future 'non-performing' loans but I did wonder does that mean the interest rate we see is gross or net?

Sorry for the dumb questions

[Kelvin]

Thanks so much for this I switched my bid to 3 years and was able to get some money invested in to this thanks to you!

Just a quick question from a newbie - how do you see other bids. I can see mine and I can see what's in the pipeline for the various terms but I haven't figured out how I see how many bids etc. I went into the borrowing screen to see how much money is waiting for investment and thought I might have to wait sometime before getting my money invested.

I am new to p2p and am only on Squirrel because I prefer the 1.9% they set aside against future 'non-performing' loans but I did wonder does that mean the interest rate we see is gross or net?

Sorry for the dumb questions

Good on you. It's a problem with Squirrel Money that a 3 year loan sits unfilled for 2 days while tens of thousands of investor funds sit unmatched waiting for 2 and 5 year loans...

You can see other bids on the Make an Investment page (in the Choose your interest rate section).

The interest rate you get is net of any platform margin and reserve fund levy, so if you match on a 9% loan, you get 9% paid to you. Just have to pay RWT on that 9%.

[kiwi_on_OE]

I am new to p2p and am only on Squirrel because I prefer the 1.9% they set aside against future 'non-performing' loans but I did wonder does that mean the interest rate we see is gross or net?

Sorry for the dumb questions

FWIW, my view on reserve funds that I've got from elsewhere. It might be useful if I'm not diversified across a lot of loans. If I am diversified and they 1) don't reserve enough, then I will lose money at some point anyway, 2) reserve too much, then I'm missing out on interest, 3) they reserve exactly the right amount, then I'm paying the money now, rather than later when the loss occurs, so I'm missing out on some money now.

[lawson]

Good on you. It's a problem with Squirrel Money that a 3 year loan sits unfilled for 2 days while tens of thousands of investor funds sit unmatched waiting for 2 and 5 year loans...

You can see other bids on the Make an Investment page (in the Choose your interest rate section).

The interest rate you get is net of any platform margin and reserve fund levy, so if you match on a 9% loan, you get 9% paid to you. Just have to pay RWT on that 9%.

D'oh! It's pretty obvious on the screen now you mention it - I'm just one of those impatient sods who never reads anything properly.

Thanks!

[Kelvin]

This week on Squirrel Money I put 2 bids in and was matched to 2x 3-year loans @ 3.50%

Also it looks like Squirrel have had their first write off ($11,000): https://www.squirrelmoney.co.nz/looking-after-your-money/

[Lewylewylewy]

Hi Squirrel (JB),

I finally signed up today. Something I've been meaning to do for a while.

Can you change the system so that the autobid allows me the option to automatically bid for the highest loan on offer, or something like that so my money doesn't just sit there? Also, can you set it so you have have multiple auto bids or a single autobid across multiple loan periods? That way I can have a bid @ 2, 3 and 5 year loans.

Finally, can you put some money into Google Ads and do some SEO on your site? We need more borrowers.

Thanks.

[Saamee]

Made and got matched with 1st Squirell loan today - 5 Years @ 9% = Happy :)

[Kelvin]

In the past week I've been matched to 2 loans

2 years at 8% and 5 years at 8.9%.

You have to be patient to get the 9% ones, as it seems like investor bids pile up pretty quickly for 5 year terms

[Saamee]

In the past week I've been matched to 2 loans

2 years at 8% and 5 years at 8.9%.

You have to be patient to get the 9% ones, as it seems like investor bids pile up pretty quickly for 5 year terms

Well that 9% loan I got matched with the Borrower pulled out of!

This morning matched and loan drawing down @ 8.9% ( same as you I guess )

There is also a 2 Year loan up this morning :)

[Kelvin]

A 3 year loan is up now too :)

[Saamee]

Today I got matched with a loan @ 8.95%

Is anybody managing to get rates better than this currently?

If so do you have a strategy to get the higher rates?

Thanx in advance :)

[Kelvin]

Well 9% is the max rate so you're doing pretty well.

You have to wait until there's not many bids in the market so that when the next loan comes in you get matched at the highest rate. You might have to wait a while for this though, as you'd need a high enough volume of loans to come through to clear out all those bids

[Saamee]

Well 9% is the max rate so you're doing pretty well.

You have to wait until there's not many bids in the market so that when the next loan comes in you get matched at the highest rate. You might have to wait a while for this though, as you'd need a high enough volume of loans to come through to clear out all those bids

Thanx Kelvin,

I split my investment dollars and put bids in @ 8.75% \ 8.8% \ 8.85% \ 8.9% & 8.95%

They still got the higher rate of 8.95%!

[Kelvin]

Personally I put in $500 at a time. So if rates are poor at the time that's only $500 being invested at a poorer rate, or if no loans are coming through, I only have $500 being idle.

In the medium term I hope to achieve an average return of at least 8.5% (currently I'm at around 8.7%)

[Saamee]

Personally I put in $500 at a time. So if rates are poor at the time that's only $500 being invested at a poorer rate, or if no loans are coming through, I only have $500 being idle.

In the medium term I hope to achieve an average return of at least 8.5% (currently I'm at around 8.7%)

Exactly - If you work out the annual interest income between say 8.75% and 9% you may as well just get invested at 8.75.... and not wait around.

Still better than the 0.6% interest ASB pays me in their Savings on Cal!!

[Saamee]

Good question. We should make that clearer. We're in the process of doing some videos to explain the bidding process better.


Hi JB, Can you post a link to these Videos - As a Squirrel newbie this may stop me asking Charles questions every day!

[Saamee]

Hi again JB,

Can you post an update on the current status of the Reserve Fund?

Have you concluded your 1st year now ( where you were putting in 4% ? )

What is the actual current Loss Rate?

Thanx

[Kelvin]

Hi again JB,

Can you post an update on the current status of the Reserve Fund?

Have you concluded your 1st year now ( where you were putting in 4% ? )

What is the actual current Loss Rate?

Thanx

Section 4 of this page might help you saamee? https://www.squirrelmoney.co.nz/looking-after-your-money/

[morphs]

Section 4 of this page might help you saamee? https://www.squirrelmoney.co.nz/looking-after-your-money/
Do you know if the value of the reserve fund is before or after the current value of the write offs?

[Kelvin]

Do you know if the value of the reserve fund is before or after the current value of the write offs?

After write offs

[humvee]

After write offs

That makes sense - but is it before or after arrears - given that arrears has presumably had to be paid from the reserve fund in the mean time

[Saamee]

Today it's Squirrel Money's turn for making the Press!

http://www.interest.co.nz/business/83614/squirrel-groups-john-bolton-has-eyes-non-bank-deposit-takers-licence

[Saamee]

SM has been very quiet for new available loans this week.

For 4 days now this week, NO Qualified Borrowers on the 2 year \ 3 year & 5 year terms!

Has the tide turned for demand for funds on P2P? ( having said that, LC has been getting busier and busier! )

[Kelvin]

SM has been very quiet for new available loans this week.

For 4 days now this week, NO Qualified Borrowers on the 2 year \ 3 year & 5 year terms!

Has the tide turned for demand for funds on P2P? ( having said that, LC has been getting busier and busier! )

I got matched with 2 5 year loans this week at 8.85% and 8.9%

[Saamee]

I got matched with 2 5 year loans this week at 8.85% and 8.9%


Was that like on Monday Kelvin?

[Kelvin]

Was that like on Monday Kelvin?

Wednesday and Thursday. Some loans go through the process and get funded quite quickly so you don't see them sitting in the Qualified Borrower stage

[Saamee]

Still the only activity here @ SM seems to be 2 Year loans..... No 5 Year activity for ages!

Have started watching the recently Funded field..... just not going up!

8331

[whipit]

I've had a 5 year loan "Waiting for document sign off" for ~ a week now

[Saamee]

I've had a 5 year loan "Waiting for document sign off" for ~ a week now

Apparently it's due to a Trust involved and Lawyers sign off - due soon :)

[whipit]

Cheers :D I see it has progressed to awaiting draw down

[Saamee]

Wednesday and Thursday. Some loans go through the process and get funded quite quickly so you don't see them sitting in the Qualified Borrower stage

Kelvin, Have you invested in any further Loans @ SM since your last posting?

I'm watching however all seems very very quiet!

[Kelvin]

Kelvin, Have you invested in any further Loans @ SM since your last posting?

I'm watching however all seems very very quiet!

My last loan drawdown was on the 24th Sep...

I put in additional funds exactly a week ago and haven't been able to get it invested since then. Very frustrating seeing investor funds piling up (have to bid lower and lower), seeing repayments piling up in my account, and no new loans to take these funds.

[Saamee]

My last loan drawdown was on the 24th Sep...

I put in additional funds exactly a week ago and haven't been able to get it invested since then. Very frustrating seeing investor funds piling up (have to bid lower and lower), seeing repayments piling up in my account, and no new loans to take these funds.

Thanx for the update...

Guess it's a market timing thing plus a marketing thing from SM finding new customers at this time!

Hvae you noticed @ SM any Monthly cycles in loan availability or maybe even Quarterly cycles?

[Kelvin]

Thanx for the update...

Guess it's a market timing thing plus a marketing thing from SM finding new customers at this time!

Hvae you noticed @ SM any Monthly cycles in loan availability or maybe even Quarterly cycles?

I think there is a cycle - in the past I have taken up loans at around 8.5%, then in 2 weeks time they'd be plenty of loans coming in at 8.9-9%. Maybe it coincides with marketing activity.

[Saamee]

Watching. Waiting. Still very quiet. Now 5 Year loans recently funded has rolled over to Zero.

8346

[Saamee]

Happened to hear a Radio Ad on George FM this morning from Squirrel looking for new Borrowers....

[Kelvin]

Just got an early repayment (fully repaid) at the worst time, with no loans to invest in (apart from a $4000 5 year loan that just got funded)

[Saamee]

Just got an early repayment (fully repaid) at the worst time, with no loans to invest in (apart from a $4000 5 year loan that just got funded)

Yes, Just right now I'm seeing many Loans being repaid early ( not a problem in itself ) however right now, both here at SM and over at LC, I am struggling ( and failing ) to Reinvest faster then being Repaid!!

[Kelvin]

After 3 weeks been matched with a 5 year loan at 8.6%

[Kelvin]

Got matched with a 8.8% 5 year loan

[Saamee]

Got matched with a 8.8% 5 year loan

Hey that's good. I just sent more funds over to try again :)

[Kelvin]

Matched with a 5 year loan at 8.9%

[Saamee]

Hey Kelvin... Yes I got into those loans as well this morning :)

[Saamee]

Just matched this morning with a 5 year loan at 8.85%

[Kelvin]

Just matched this morning with a 5 year loan at 8.85%

Me too. My 8.9% one from the other day got cancelled though :(

[Saamee]

Me too. My 8.9% one from the other day got cancelled though :(

From yesterday, my 8.9% still has 1 Hour 21 minutes to run before offer expires - Looks like the Borrower is not going to Accept

[Saamee]

From yesterday, my 8.9% still has 1 Hour 21 minutes to run before offer expires - Looks like the Borrower is not going to Accept

Oh! Surprise surprise... The Borrower just accepted yesterdays deal with 35 mins to go!

[Kelvin]

I think what might be happening here is when a loan is matched with lender funds, an email is sent to the borrower asking them to accept the deal.

A lot of borrowers have been slow to accept, or fail to accept - so either they aren't checking their emails or the instructions are not clear.

I suspect Squirrel is calling the borrower to get their acceptance shortly before expiry, while a couple I had expire on a Saturday never got accepted as there's no one in the office to call the customer??

[Saamee]

I think what might be happening here is when a loan is matched with lender funds, an email is sent to the borrower asking them to accept the deal.

A lot of borrowers have been slow to accept, or fail to accept - so either they aren't checking their emails or the instructions are not clear.

I suspect Squirrel is calling the borrower to get their acceptance shortly before expiry, while a couple I had expire on a Saturday never got accepted as there's no one in the office to call the customer??

Yes. Sort of reached the same conclusion via similar thinking....

[Saamee]

Matched with a 5 year loan at 8.9%

Some people got matched today on 5 year loans - but it was not me today :( ( Loan about 10K's worth )

Must have been less that 8.8%!

[Kelvin]

Better volume of loans recently (I do not have the funds to match with all of them though).

In the past week I have gotten an 8.75, 8.8 and 8.9% (still awaiting funding approval)

[Saamee]

Better volume of loans recently (I do not have the funds to match with all of them though).

In the past week I have gotten an 8.75, 8.8 and 8.9% (still awaiting funding approval)

I'm Jealous of you! he he he Had money sitting there @ 8.75% and 8.8% never got filled - smallish amounts.

Left the joint for now.

Have not seen 5 Year terms in "Awaiting Funding" status for a number of weeks now....

[Kelvin]

Borrower never accepted the 8.9% loan.

While my funds were held for 24 hours awaiting acceptance, tens of thousands of $$ worth of other loans were matched :mad ;:, now I go back in the queue awaiting to be matched again.

Squirrel really should look at fixing this awaiting funding approval process, perhaps cut it to 12 hours

[Kelvin]

A lot of loans came through today. Only ~$1000 of funds left bidding for 5 year loans!

[Saamee]

A lot of loans came through today. Only ~$1000 of funds left bidding for 5 year loans!

Good to know.

Still have not seen any Loans sitting in the "Awaiting Funding" area!!

[Kelvin]

Good to know.

Still have not seen any Loans sitting in the "Awaiting Funding" area!!

There is a 3 year 15k loan awaiting funding.

Otherwise there are enough investor bids in the system for loans to move to funded straight away.

[Saamee]

There is a 3 year 15k loan awaiting funding.

Otherwise there are enough investor bids in the system for loans to move to funded straight away.

Just ( finally ) got assigned to a 5Y 8.95% loan :) Just got to wait up to 23hrs and 56 mins!

[Saamee]

Just ( finally ) got assigned to a 5Y 8.95% loan :) Just got to wait up to 23hrs and 56 mins!

Sadly 24 Hrs later and they never took up the offer...

Oh well new order established... waiting again.

[Kelvin]

Wish SM pushed harder for an Accept or Decline response from the borrower, rather than waiting 24 hours for a loan to expire

That way if they do decline, your funds can go straight back in the queue rather than having them tied up for 24 hrs.

[Saamee]

Sadly 24 Hrs later and they never took up the offer...

Oh well new order established... waiting again.

As soon as the 24 Hr wait expired, put the funds straight back in again, and got matched 15 mins later @ 8.95% - within 1 hour it was then at status = waiting drawdown.

[Saamee]

Any Squirrel Investors ever had a SM loan here repaid early yet?

[Kelvin]

Any Squirrel Investors ever had a SM loan here repaid early yet?

I've had 1 full repayment, and another paid off half their loan

[humvee]

Any Squirrel Investors ever had a SM loan here repaid early yet?

Yes - both full repayments and repayments of large %

[RGR367]

Same here early this year. Full repayment just slightly less than a month on the term. Got reinvested right away then.

But it seems very few are borrowing these days as my last one took almost 3 weeks to be taken.

[Saamee]

Watching and waiting the 5 Year term @ SM - Funding has Not moved all day today....

[Saamee]

Yes - both full repayments and repayments of large %

Having asked this question earlier in the week..... SM gave me my 1st Fully repaid loan overnight!

[Saamee]

Just moved all my 'funds waiting for new loans' out of SM.... Nothing happening on 5 Year loans these days.

Did get in to a 5 Year loan on Fri @ 16:00 which went in to the 24 hour countdown waiting for Borrower to accept.

24 Hours passed and my $$'s were left in SM over the weekend with NO activity!

[Kelvin]

Just moved all my 'funds waiting for new loans' out of SM.... Nothing happening on 5 Year loans these days.

Did get in to a 5 Year loan on Fri @ 16:00 which went in to the 24 hour countdown waiting for Borrower to accept.

24 Hours passed and my $$'s were left in SM over the weekend with NO activity!

Must be reaching the quite part of the cycle. Last couple of weeks saw a lot of activity, now super quiet (apart from a 8.95% 5 year loan thats expiring in 5 mins)

[Kelvin]

Must be reaching the quite part of the cycle. Last couple of weeks saw a lot of activity, now super quiet (apart from a 8.95% 5 year loan thats expiring in 5 mins)

Spoke to soon. Have been matched with 8.95% and 9.00% loans in the last 24 hours. And they have both passed the Awaiting Funding Approval stage!

[humvee]

Heads up to any fellow sharetrader users and squirrel money investors - Not 100% confirmed yet but it is likely in the next 24-72 hours I will be testing out the 2nd hand markets for selling squirrel loans (around 30 of them).

I will post feedback re how I get on, These are all good loans and all within 0.2% of the maximum interest rate for the term that they are.

If you don't have $ waiting in squirrel and you want a chance at getting these loans you might want to put some in ASAP

[whitt]

Heads up to any fellow sharetrader users and squirrel money investors - Not 100% confirmed yet but it is likely in the next 24-72 hours I will be testing out the 2nd hand markets for selling squirrel loans (around 30 of them).

I will post feedback re how I get on, These are all good loans and all within 0.2% of the maximum interest rate for the term that they are.

If you don't have $ waiting in squirrel and you want a chance at getting these loans you might want to put some in ASAP
Whats the minimum investment and deposits required? Sounds good

[Saamee]

Whats the minimum investment and deposits required? Sounds good

$500 over at Squirrel

[Saamee]

Heads up to any fellow sharetrader users and squirrel money investors - Not 100% confirmed yet but it is likely in the next 24-72 hours I will be testing out the 2nd hand markets for selling squirrel loans (around 30 of them).

I will post feedback re how I get on, These are all good loans and all within 0.2% of the maximum interest rate for the term that they are.

If you don't have $ waiting in squirrel and you want a chance at getting these loans you might want to put some in ASAP

Humvee > What Length term were the loans originally? ( ie how long left to run now? )

[humvee]

Humvee > What Length term were the loans originally? ( ie how long left to run now? )

A mix 2,3,5 year terms.

Start dates range between when Squirrel money 1st launched and 1 month ago.

[humvee]

I just tested with a single loan to see how fast the process was The Answer - less then 1 minute

[Saamee]

I just tested with a single loan to see how fast the process was The Answer - less then 1 minute

Ha ha > That's impressive.... Hungry investors!

[Saamee]

I too had orders in @ SM and by 10:30 this morning orders had all been funded @ 9% ( and right now just 1K awaiting for Lending! )

[RGR367]

Another 5 year investment (4 yrs, 3 mths remaining) of mine got fully repaid today.

[Saamee]

Another 5 year investment (4 yrs, 3 mths remaining) of mine got fully repaid today.

Yes... All part of the P2P Investment game.... Over @ Harmoney I am seeing 50% early repayments

[humvee]

Yes... All part of the P2P Investment game.... Over @ Harmoney I am seeing 50% early repayments

Today I am wanting early repayments at squirrel - less I need to pay the fee for selling in next few days

[Saamee]

Today I am wanting early repayments at squirrel - less I need to pay the fee for selling in next few days

Was not sure what you were referring to - so went and checked their website > 1% Fee up to $50 max PER Loan sold...

[Saamee]

I just tested with a single loan to see how fast the process was The Answer - less then 1 minute

Humvee - Think I've just been buying your secondary market loans @ 9%!

[humvee]

Yep - I just released them

So this is how it seems to work - when you release heaps it seems to cycle through them - with only 1 sold every 5 minutes or so even if there are orders waiting they seem to match 1 at a time ~ every 5 mins

Loans that remain on the market (and nothing new has sold in last 25 mins or so)

5 Years - with balances over $500 - But most under $600
3 Years - with balances over $500 - But most under $600
2-year loans

I have a small number Im not releasing today - but will release over the next week

[Saamee]

Yep - I just released them

So this is how it seems to work - when you release heaps it seems to cycle through them - with only 1 sold every 5 minutes or so even if there are orders waiting they seem to match 1 at a time ~ every 5 mins

Loans that remain on the market (and nothing new has sold in last 25 mins or so)

5 Years - with balances over $500 - But most under $600
3 Years - with balances over $500 - But most under $600
2-year loans

I have a small number Im not releasing today - but will release over the next week

As an investor in these loans of yours - I received Emails from Squirrel saying you have been matched but you need to accept or decline.

[DonB]

Heads up to any fellow sharetrader users and squirrel money investors - Not 100% confirmed yet but it is likely in the next 24-72 hours I will be testing out the 2nd hand markets for selling squirrel loans (around 30 of them).

I will post feedback re how I get on, These are all good loans and all within 0.2% of the maximum interest rate for the term that they are.

If you don't have $ waiting in squirrel and you want a chance at getting these loans you might want to put some in ASAP

Thanks for letting us know about this. Its nice to know how easy it goes. I imagine that lots of smallish loans would sell easier than a couple of bigger ones but there would be more fees involved. If these sell well it might be the answer to my concern about being able to get money out if needed.

[humvee]

Thanks for letting us know about this. Its nice to know how easy it goes. I imagine that lots of smallish loans would sell easier than a couple of bigger ones but there would be more fees involved. If these sell well it might be the answer to my concern about being able to get money out if needed.

Yes smaller loans are easier to sell infact anything over $501 sells noticeably slower. All my loans started out as loans between $500-$900, That said since I posted here about it someone has taken all the 5 year loans between $500-$600

Still on the market
3 Year loans with balances less then $500
2 Year loans with balances less then $500

[humvee]

No more 2 & 5 years left now at all - only 3 years

[humvee]

Only 2 x 3year @ 8.5% everything else is gone now - and there will be no more

[RGR367]

Expecting interest rate to come up soon so a lot more loans will come your way. Just leave the worrying to those who will need your dough sometime soon :)

[Saamee]

The last 10 days I have had all my new loans filled @ 9% / 5 Years on the same day orders were placed.

Happy :)

[Saamee]

More investors wanting Loans, waiting for Borrowers funds......

8492

[Saamee]

More investors wanting Loans, waiting for Borrowers funds......

8492

Gaps getting even wider... Like 7K of investor funds available for now 142K borrowers wanting loans!

8493

[AndyKiwi]

I feel that the minimum investment amount should be dropped down to like $50 or at most $100. I have $400 sitting in my Squirrel account sitting idle which I can't invest yet. A lot of us would be in the same boat. Dropping down the investment amount would enable us to invest more frequently and would result in the loans getting filled faster. It would be a win win situation for investors, borrowers and Squirrel.


Gaps getting even wider... Like 7K of investor funds available for now 142K borrowers wanting loans!

8493

[Saamee]

I feel that the minimum investment amount should be dropped down to like $50 or at most $100. I have $400 sitting in my Squirrel account sitting idle which I can't invest yet. A lot of us would be in the same boat. Dropping down the investment amount would enable us to invest more frequently and would result in the loans getting filled faster. It would be a win win situation for investors, borrowers and Squirrel.




Gaps getting even wider... Like 7K of investor funds available for now 142K borrowers wanting loans!

8493



Each P2P lender works just a little differently from the others ( each has their own quirks etc )

I guess because Squirrel is 100% guaranteed - one can put money away there with 100% safety in mind - therefore a higher minimum investment is OK.

[Saamee]

Just been pondering the following:> How usuefull is the Secondary Market going to be \ work to an Investor in a rising interest rate environment?

I am trying to work out in my head, how in a Rising Interest environment ( coming mid next year? ) as P2P lenders raise their rates, how say selling a secondary loan at 9% would go, if you could get 10% for a virgin fresh loan.....

Who would \ could Sell in those circumstances?

[stoploss]

Just been pondering the following:> How usuefull is the Secondary Market going to be \ work to an Investor in a rising interest rate environment?

I am trying to work out in my head, how in a Rising Interest environment ( coming mid next year? ) as P2P lenders raise their rates, how say selling a secondary loan at 9% would go, if you could get 10% for a virgin fresh loan.....

Who would \ could Sell in those circumstances?

deending on credit etc , the loan will sell at a discount to the new one .....

[Saamee]

Continuing to obtain 9% \ 5 Year Funding everyday this week... Still more Borrowers around than Funders right now.

[kiwi_on_OE]

Each P2P lender works just a little differently from the others ( each has their own quirks etc )

I guess because Squirrel is 100% guaranteed - one can put money away there with 100% safety in mind - therefore a higher minimum investment is OK.

100% guaranteed? They have a reserve fund, but that doesn't make it 100% guaranteed. I also hadn't realised that the minimum bid was $500.

Does anyone know how much of the borrowers' payments goes into the reserve fund? I couldn't find anything specific. I'm assuming for a good borrower they add, say, 1% to the interest rate you bid, and for a bad borrower they add, say 5% to the interest rate you bid.

[Saamee]

100% guaranteed? They have a reserve fund, but that doesn't make it 100% guaranteed. I also hadn't realised that the minimum bid was $500.

Does anyone know how much of the borrowers' payments goes into the reserve fund? I couldn't find anything specific. I'm assuming for a good borrower they add, say, 1% to the interest rate you bid, and for a bad borrower they add, say 5% to the interest rate you bid.

Yes... It's here >>> https://www.squirrelmoney.co.nz/looking-after-your-money/

Currently @ 1.99%

Guaranteed as long as there are current reserves in the Fund!

[Saamee]

I also hadn't realised that the minimum bid was $500.

It sounds from how \ what you write that you have not invested any funds with Squirrel yet?

[kiwi_on_OE]

Yes... It's here >>> https://www.squirrelmoney.co.nz/looking-after-your-money/

Currently @ 1.99%

Guaranteed as long as there are current reserves in the Fund!

So definitely not 100% guaranteed, no guarantee at all.

No, I haven't invested in Squirrel, I'm not a fan of reserve funds. If they take too much off you to put in the reserve then you are getting a lesser return than you should. If they don't take enough off you to put in the reserve fund then you lose. If they take the right amount then you're ok, but if you're properly diversified you would've achieved the same result without a reserve fund.

[Saamee]

So definitely not 100% guaranteed, no guarantee at all.

No, I haven't invested in Squirrel, I'm not a fan of reserve funds. If they take too much off you to put in the reserve then you are getting a lesser return than you should. If they don't take enough off you to put in the reserve fund then you lose. If they take the right amount then you're ok, but if you're properly diversified you would've achieved the same result without a reserve fund.

It is NOT the Investor that Pays the Reseve Fund Levy > It is the Borrower!

No Cost to the Investor at all....

[Saamee]

It is NOT the Investor that Pays the Reseve Fund Levy > It is the Borrower!

No Cost to the Investor at all....

Other recent contributors got me looking a little deeper into how the SM Reserve fund works....


8529

[kiwi_on_OE]

It is NOT the Investor that Pays the Reseve Fund Levy > It is the Borrower!

No Cost to the Investor at all....

You can quibble about the wording, but if there was no reserve fund, then the investor would receive bigger payments, so I still class payments to a reserve fund as money being taken from me, an investor.

[humvee]

I didn't get a chance to come back and post how I got on with selling the loans (been to busy) In the end it took 9 day to liquidate ~$12,000.

5 year loans under $500 went fast
There were some delays on 2 & 3 year loans
There were more delays on the loans with balances between $501-$999

So while the process worked OK for me - not great - but OK I think the market (and ability to sell) would break should interest rates rise from when the loans were written, I also think anyone lending below the max interest rate is going to have trouble if they need to sell

[morphs]

I sold a couple of loans the other week as a test and they were snapped up the same day (at the same as the top market interest rate). However, I do agree that this service will not work very well if (when) interest rates rise. I would hope that Squirrel are aware of this and are working on the ability for the loans to be sold at a price other than face value, in a similar fashion to the bond market.

[Saamee]

Anyone else notice it looks like Squirrel have just taken some serious 'End of Year' Write Off's.

The Reserve Fund has fallen from approx 220K to 200K and the Fund Coverage is now just 3.55% ( it was around 4% )

Squirrel have also now chosen to stop showing the amount of $$ Loans Write Off's on the website.

8549

[Saamee]

Anyone else notice it looks like Squirrel have just taken some serious 'End of Year' Write Off's.

The Reserve Fund has fallen from approx 220K to 200K and the Fund Coverage is now just 3.55% ( it was around 4% )

Squirrel have also now chosen to stop showing the amount of $$ Loans Write Off's on the website.

8549

Maybe the drop(ping) in Reserve Fund size is linked to Squirrels commitment to paying in 4% over the 1st year.

Now they will let the fund dwindle down to the 1.9% level they state it should be at?

[whitt]

Maybe the drop(ping) in Reserve Fund size is linked to Squirrels commitment to paying in 4% over the 1st year.

Now they will let the fund dwindle down to the 1.9% level they state it should be at?
Technically the fund could vary in % depending on the economic cycle. 1.9% might be fine at this point but what about during a recession where returns half and defaults double.

http://www.lendingmemo.com/p2p-lending-recession-performance/

[AndyKiwi]

Anyone using the Squirrel app? How do you find it?

[Saamee]

Anyone using the Squirrel app? How do you find it?

I'd be interested to know where did you get the idea from there is a Squirrel App??

[Kelvin]

Search on the App Store/Google Play Store.

It had a few bugs when I first use it, I'm currently just sticking to the mobile website as it's sufficient for me.