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  1. #421
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    Has anybody managed to invest in loans for 5-7 or 2-3 years recently? If so, at what rate?

    Currently there is $131k for 1 year awaiting funding.
    I'm thinking that it would be better to put money to work now and get 6% return instead of waiting for weeks/months for a higher return.

    What y'all think?

  2. #422
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    Hi icyfire. I'm CFO at Squirrel.
    We are definitely still getting loans pushed through in the 5-7 and 2-3 year categories - around 60% of the new lending this month.
    The loans funded in the 5-7 year bucket this month have had an average investor rate of 8.14% and 7.03% for the 2-3 year loans.
    I would encourage you to look at the 1 year loans for at least a portion of your investment portfolio. We have a strong pipeline in that space and as you highlight - you can have your money invested almost immediately with the $131k of loans currently awaiting funding.
    The key feature of these one-year investments (other than the lower return of-course) is that it is interest only for the first 12 months - so investments don't get repaid quite so quickly.
    Last edited by TB@squirrel.co.nz; 30-11-2018 at 01:55 PM.

  3. #423
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    Decided to venture over here for a bit of diversity, will see how it goes but if I dont get any bites after a few weeks I'll be out.

  4. #424
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    Quote Originally Posted by couta1 View Post
    Decided to venture over here for a bit of diversity, will see how it goes but if I dont get any bites after a few weeks I'll be out.
    Squirrel Money is more of a set it and forget it kind of P2P platform unlike other p2p lending platforms which are very time consuming.

  5. #425
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    FY2019 RWT Tax Certificates are already available Online for Download

  6. #426
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    Anyone having any luck at all with Squirrel recently? The loan volume appears to have collapsed, even more so than Harmoney.

  7. #427
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    Quote Originally Posted by CageyB View Post
    Anyone having any luck at all with Squirrel recently? The loan volume appears to have collapsed, even more so than Harmoney.
    Yep hard to get any money loaned out for 2-3 yrs for over 6.5%.

  8. #428
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    Quote Originally Posted by CageyB View Post
    Anyone having any luck at all with Squirrel recently? The loan volume appears to have collapsed, even more so than Harmoney.
    I wonder if loan volume has dropped as a result of the fall in house sales and as a result of drop in loan demand more generally. It would be interesting to see if bank lending has fallen too. Also perhaps some people are waiting to see if there are major tax reforms as a result of the TRG report before taking on loans.
    https://www.nzherald.co.nz/business/...ectid=12221621

  9. #429
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    Looks like high interest loans available on Squirrel secondary market, but buyers queuing up for lesser interest rates. Unaware? Does Squirrel inform its investors, I wonder ...

  10. #430
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    Quote Originally Posted by beacon View Post
    Looks like high interest loans available on Squirrel secondary market, but buyers queuing up for lesser interest rates. Unaware? Does Squirrel inform its investors, I wonder ...
    Hey there beacon.
    Thought I would jump in and respond to your post - its a good question to raise...

    Loans that appear on the Squirrel P2P Secondary Market will generally get matched automatically on the following basis:
    Investor Interest Rate
    The new Investor(s) must have an Investment Order with an interest rate that is less than or equal to the interest rate of the investment being sold. In this regard, a matched Investor that had an Investment Order with a lower interest rate will benefit by receiving the higher interest rate on the investment being sold. The platform will match from the lowest interest rate to the highest.

    Investment Term
    An Investor will automatically be matched to and transferred into an investment that is being sold if their Investment Order matches the amount (greater than or equal to) and interest rate (less than or equal to) - noting the selection order mentioned above. The Investment Term remaining on the investment to be sold must be within 3 months of their requested term for 24-month and 36-month Investment Orders or 12 months for 60-month Investment Orders. For example,an Investor with an Investment Order for 36 months will automatically be matched to an investment being sold with 34 months remaining (assuming the Investor Interest Rate criteria is met). An email will be sent to anew investor to accept or decline an investment when the remaining term on an investment that is for sale is outside this tolerance.

    Loans that have experienced a credit event
    Investments being sold where the underlying Loan has suffered a Credit Event (i.e. missed repayment(s),hardship, default) will not be automatically matched to an Investment Order and instead an email will be sent to the new Investor disclosing the details of the Credit Event associated with the Loan and providing an opportunity to accept or decline the investment on that basis. Under this scenario, a new Investor continues to benefit from the protection offered by the Reserve Fund and does not directly bear the credit risk of the underlying Loan to which they are investing.

    When you see loans sitting on the secondary market for longer than an hour or so, it is usually because the remaining term on the loan slips outside the tolerances for auto matching above, or the loan being sold has had some form of credit event. In those cases, the platform will be waiting for confirmation from the investor(s) who best match the loan (one way or the other).

    Hope this answers the 'wondering' from your post a few weeks back.

    Cheers,
    Tim (CFO at Squirrel)

  11. #431
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    When you see loans sitting on the secondary market for longer than an hour or so, it is usually because the remaining term on the loan slips outside the tolerances for auto matching above, or the loan being sold has had some form of credit event. In those cases, the platform will be waiting for confirmation from the investor(s) who best match the loan (one way or the other).
    Thanks Tim. I am told that the wait, even on loans without any credit event, isn't hours - but can be days or even weeks. That doesn't sound an easy or simple exit. Still wondering ...

  12. #432
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    Quote Originally Posted by beacon View Post
    Thanks Tim. I am told that the wait, even on loans without any credit event, isn't hours - but can be days or even weeks. That doesn't sound an easy or simple exit. Still wondering ...
    Thanks for bringing this to my attention @beacon – to my knowledge we've not heard from any investor about this issue previously so we’re digging into this to see what might be causing delays with transfer requests.

    From my initial review, it looks like there could be a bottleneck in our processing when the investment up for transfer doesn’t meet the automatic transfer criteria outlined in the Secondary Market Rules - usually because the remaining term on the investment is below the term tolerances or the loan the investment relates to has had a credit event at some point.

    What happens in those scenario's is that investors are offered the investment one by one until someone accepts i.e. if first investor declines the offer, it is offered to the next investor in the queue and so on with each investor given 24 hours to accept or decline. It is that process that looks to be causing delays – so the team are working through some examples to see what we can do to speed the process up which may include adjusting the tolerances or perhaps offering the investment to a wider group in the first instance.

    It looks like the average transfer time this year is around 2 days - but there is certainly evidence that investments are taking a lot longer than that to shift when the scenarios above present.

    I will report back when we get to the bottom of the issue and have a resolution.

  13. #433
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    From my initial review, it looks like there could be a bottleneck in our processing when the investment up for transfer doesn’t meet the automatic transfer criteria outlined in the Secondary Market Rules - usually because the remaining term on the investment is below the term tolerances or the loan the investment relates to has had a credit event at some point.
    A credit event is really irrelevant to an investor because of the reserve fund. That is why they pay the 2% extra for every loan (good or bad), don't they?

    The remaining investment term is also really irrelevant to an investor (except for the higher interest rate higher term loans offer alongwith greater probability of greater longevity) because these loans can be repaid early without penalty irrespective of investment term anyway.

    So, if dozens of loans are sitting in your secondary market unsold for weeks (even months for the odd ones, I've heard) at 8%+ when investors are queuing to be filled at 6%, there are definitely serious bottlenecks in your system. Interestingly, this is when your webpage apologizes for investment delays on account of loan demand exceeding supply.

    I'm also told your secondary market is opaque to most of your investors at most times, because secondary market loans at rates higher than your bidding range are rarely visible to your investors. Perhaps sunlight will do the Squirrel loans some good.
    Last edited by beacon; 06-02-2020 at 04:21 AM.

  14. #434
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    Quote Originally Posted by beacon View Post
    A credit event is really irrelevant to an investor because of the reserve fund. That is why they pay the 2% extra for every loan (good or bad), don't they?

    The remaining investment term is also really irrelevant to an investor (except for the higher interest rate higher term loans offer alongwith greater probability of greater longevity) because these loans can be repaid early without penalty irrespective of investment term anyway.

    So, if dozens of loans are sitting in your secondary market unsold for weeks (even months for the odd ones, I've heard) at 8%+ when investors are queuing to be filled at 6%, there are definitely serious bottlenecks in your system. Interestingly, this is when your webpage apologizes for investment delays on account of loan demand exceeding supply.

    I'm also told your secondary market is opaque to most of your investors at most times, because secondary market loans at rates higher than your bidding range are rarely visible to your investors. Perhaps sunlight will do the Squirrel loans some good.
    Hi Beacon - you are correct regarding the relatively low relevance of the credit event disclosure given our reserve fund model, that disclosure is however a condition of our secondary market licence – so we can’t avoid doing that unfortunately.

    I also agree with your feedback regarding the remaining investment term - and we are currently looking into widening the remaining term thresholds for automatic matching.

    Regarding the small number of investments that are moving slowly through the secondary market process, we are working hard to scope the technical resolution that will help them move through quicker and should have something ready to go in the next few weeks. This particular change isn't going to solve our supply/demand issue though I am sorry and it won't get an investor bidding into a one-year interest-only loan at 6% get into a P&I term loan at 8%+.

    In the meantime, I would encourage investors to check their junk emails for Squirrel Money emails with the subject “We’ve found an investment that matches your criteria” – that is the notification we send out when an investment outside the automatic matching criteria is available to you - but you have to physically accept it before the platform will match you up. These emails often find their way into junk email folders and aren’t being seen and in some circumstances our system is re-sending them each day until they are – so we’re also looking at better ways to notify investors of this sort of thing and to stop the looping that seems to be occurring.

    I’m not entirely sure what you mean by opaque but, by design, investors generally won’t/shouldn't notice that they have been matched to a secondary market loan if the investment meets the automatic matching criteria outlined in our Secondary Market Rules document. Yes, on occasion they may benefit from the higher rates if the investment being offered for transfer is one from more than a couple of years ago, but that is just the luck of the draw. The Squirrel platform wasn’t designed so that those investments can be targeted per se, they just go to the best matched investor in the queue. To me, that seems the fairest approach don't you agree?

    Finally, I appreciate the feedback @beacon, it really can help improve the platform for all investors.

  15. #435
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    Yes, on occasion they may benefit from the higher rates if the investment being offered for transfer is one from more than a couple of years ago, but that is just the luck of the draw. The Squirrel platform wasn’t designed so that those investments can be targeted per se, they just go to the best matched investor in the queue. To me, that seems the fairest approach don't you agree?
    How is your secondary market fair to loan vendors who have to sacrifice 1% interest as loan sale fee but still have to wait weeks or months to receive their funds back? Kind of waters down the benefit of a secondary market a lot, with investors not knowing when they'll be able to exit their investment (if at all!)

    Banks/finance cos. charge the 1% break/penalty fee too but their redemptions are instantaneous. Your model is different, but Squirrel pitches itself as better than these in the first place to justify its comparatively lower interest rates vs the NZ P2P sector, isn't it?

    I think if no acceptance confirmation emails were needed from the investor for making the initial investment in a loan (making your process automatic), then none should be needed for investing in the secondary market loans either (making this process automatic), since you do not disclose loan details at initial investment anyway and acknowledge that credit events and loan terms don't really disadvantage a secondary market loan buyer. In fact, everyone then gets a chance to benefit from an improved rate (rather than just the lucky guy who happened to check his junk mail folder in time). Now that would be fairer, don't you think?

    Anyway, good to see that you seem genuinely interested in listening to feedback and making some effort to improve your platform.

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