@joker... Your were looking at 5 Year loans only whilst icyfire was looking at all the terms of loans!
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It looks like as more money comes into SM from investors, interest rates you need to bid to get invested come down (logical I guess), shame it doesn't work the other way as more borrowers come onto the platform.
Here I am looking AGAIN for somewhere to invest my money easily.
Sorry Beacon hadn't been on here a while so just picked up your query.
The borrower rates are carded based on their risk (including applied risk premium) and assuming the high end of the investor bid spread. The borrower always gets the advertised rate. The Squirrel margin is also always the same (1% on A grade, 2% on B grade ....) If investors bid down their return we pass the difference to the reserve fund which benefits all investors and covers any potential losses.
At the moment we've had a bit of a surge in investor activity so we have surplus funds in the platform and investors have started to bid rates down a bit. This will be good for growing the reserve fund.
We've got about $1m of borrowers coming through monthly and whilst that is growing, it's only growing slowly. The joys of 100% retail funding and wanting to keep acquisition costs sustainable!
We don't bid on any loans for 24 hours and then we only bid in at the maximum investor rate to settle the loan, so Squirrel never makes any money on the secondary market and the investor return is maximised. We essentially only bid in where there is a shortage of investor funds to get the loan settled. We're not bidding at all at the moment as plenty of investor bidding going on. Hope that clarifies.
We've had a big week of loan settlements this week, so will hopefully clear surplus investor funds over the coming couple of weeks.
Thank you JB. Refreshing to see your engagement and transparency - to educate and clarify ...
Not much going on at Squirrel lately. I've had 3K waiting to be invested for 5 years at 8.75% now for over a week and it's still sitting there. Longer term, there needs to be a better re-investment process than this otherwise surplus cash is just sitting around too long.