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.