Private Lendng - an alternate cashflow option?

[ChrisA1]

I saw the newspaper article in the attachment about investors investing in companies providing private lending/private mortgages. Scott Pape, author calls it peer-peer lending. The article states that it is risky due to the borrowers that may come to these companies. Companies that provide private mortgages use the property as security and usually only give short term loans as a second mortgage over the property. I have seen a few of these companies coming up over the recent time (I understand these companies are different to lenders such as Nimble etc).

Web link at http://www.heraldsun.com.au/busines...d-work-both-ways/story-fngu4eru-1227308527911

 

[Paul@PFI]

Peer to peer is growing but laws hamper its use (and its likely misuse !!). Laws exist to protect the vulnerable from loan sharks.

P2P seems to attract a higher risk profile thus can be seen as a lender of last resort (LOLR). However there are some investors in P2P schemes that get well rewarded for their risk too.

Harmoney was born from team that made flexirent a success here. It had to use NZ as its laws were more tolerant. https://www.harmoney.com/

The high risk grade debt is close to LOLR and well above credit card rates. The fractionalisation and risk models allow an investor to tailor their risk profile it seems.

 

[wombat777]

Peer to peer is growing but laws hamper its use (and its likely misuse !!). Laws exist to protect the vulnerable from loan sharks.

P2P seems to attract a higher risk profile thus can be seen as a lender of last resort (LOLR). However there are some investors in P2P schemes that get well rewarded for their risk too.

Harmoney was born from team that made flexirent a success here. It had to use NZ as its laws were more tolerant. https://www.harmoney.com/

The high risk grade debt is close to LOLR and well above credit card rates. The fractionalisation and risk models allow an investor to tailor their risk profile it seems.

I had a quick look. I like the spread of grades and possibility of small loan amounts which allows the risk to be diversified.

This is limited to NZ residents. Is there anyone in australia operating on a very similar model?

Unsure where I originally read it, however US banks are running scared of P2P ...

http://www.lendingmemo.com/wells-fargo-peer-to-peer-lending/

 

[TMNT]

just curious, private lending, isnt it fraught with danger?

can you enforce payments and take security with privaet contracts>?

 

[Paul@PFI]

I had a quick look. I like the spread of grades and possibility of small loan amounts which allows the risk to be diversified.

This is limited to NZ residents. Is there anyone in australia operating on a very similar model?

Unsure where I originally read it, however US banks are running scared of P2P ...

http://www.lendingmemo.com/wells-fargo-peer-to-peer-lending/

Presently the legal issues make it unviable...AFSL Licensing, Corporations Law, PDS, prospectus and all that stuff.

I can see P2P as a fancy name for junk debt. You only use a junk debt lender if you cant access mainstream cheap funding options... That spells RISK. Some dodgy operator will work out how to make appalling debt look like gold and keep the gold and sell the crap debt three times...End in tears.

From what I have seen P2P at its worst it makes a credit card look very cheap.



We have P2P lending in my house....Kids insist they will pay me back. Lots of promises up front. Late or never.

 

[Terry_w]

just curious, private lending, isnt it fraught with danger?

can you enforce payments and take security with privaet contracts>?

Yes you can and this is how I ended up studying law. I was lending my money to 'clients' and some didn't want to give it back.

 

[pinkboy]

We have P2P lending in my house....Kids insist they will pay me back. Lots of promises up front. Late or never.

Perhaps the lenders aren't being responsible lenders!

pinkboy

 

[Qlds007]

I own 3 separate Private lending companies and i have to say the article is full of inaccuracies (what a surprise).

We only lend against residential / commercial security by way of a caveat / 1/2RM and yes we can enforce default, sell the property as mortgagee in possession and even assign the first mortgage by paying out the borrowers current prime lender.

Half the battle in this industry is finding a Commercial legal firm who knows what they are doing. Trust me we went thru a couple of absolute shockers he claimed they had done much of this time of work in the past and really had no idea.

Cheers

 

[scha9799]

A client of mine is asking for the short term unsecured lending.

The loan amount is about 2 million. 6-12 months terms. the fund is for the development usage, but somehow the client is not willing to put up any security, no caveat.

I am trying to source this type of lending, am I looking for something didn't even exist ?

Does anyone know if this type of short term unsecured lending exist ?

 

[pinkboy]

A client of mine is asking for the short term unsecured lending.

The loan amount is about 2 million. 6-12 months terms. the fund is for the development usage, but somehow the client is not willing to put up any security, no caveat.

I am trying to source this type of lending, am I looking for something didn't even exist ?

Does anyone know if this type of short term unsecured lending exist ?

Bikies. 4%/month.

The penalty fees will be a killer if default.

pinkboy

 

[Paul@PFI]

A client of mine is asking for the short term unsecured lending.

The loan amount is about 2 million. 6-12 months terms. the fund is for the development usage, but somehow the client is not willing to put up any security, no caveat.

I am trying to source this type of lending, am I looking for something didn't even exist ?

Does anyone know if this type of short term unsecured lending exist ?

$2m unsecured...Melbourne Comedy Festival dates are here too: http://www.comedyfestival.com.au/2015/season/

I might suggest a tip from Shark Tank... Someone may lend it. And want 75% of the profit. And take a floating charge / guarantee.

 

[D.T.]

We only lend against residential / commercial security by way of a caveat / 1/2RM and yes we can enforce default, sell the property as mortgagee in possession and even assign the first mortgage by paying out the borrowers current prime lender.

Do any small unsecured stuff?