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Messages - LonghornSF

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General P2P Lending Discussion / Street Shares Business Loans
« on: December 29, 2016, 12:00:00 AM »
Fred - how would you compare/contrast Dealstruck to say Funding Circle or Lending Club's business loan operation?

I think you've mentioned in the past that you've invested in loans on all three platforms. How has asset quality compared? Any insight into underwriting differences at the latter two vs. Dealstruck, or the future of their businesses? The Dealstruck closure really surprised me especially since they had just raised a bunch of money.
General P2P Lending Discussion / Dealstruck closing down
« on: November 21, 2016, 12:00:00 AM »
Wow too bad. I met Ethan and thought he was a good guy, though he seemed a bit scatterbrained. My impression was his dad (former VC guy) was at least partially funding the company, so they must have really doubted the viability of the model if they decided to pull the plug. The marketplace model is really difficult to apply to SME loans, wonder if Funding Circle is next.
Investors - LC / Idea: LC but with partially secured consumer loans
« on: July 27, 2016, 11:00:00 PM »
The idea has been considered especially on the small business side of things, but there are several hurdles:

1) Collecting and monetizing collateral increases servicing costs dramatically. You need a large ticket loan for the economics to work. Collecting is also a scummy business which the (formerly) reputable marketplace lenders didn't want to get into.
2) Assessing the value of collateral during the underwriting stage is also difficult and again increases costs.
3) Collection laws vary widely state to state. From a compliance standpoint, its difficult to administer.

Moreover, most collateralized loans such as auto and HELOCs are already low cost, so its not clear that investor demand would be there.

There's no way to spin any of these announcements as good news. The last two points look particularly bad for RL. Borrowing $1mn on the LC platform so they can presumably hit some loan growth target? LCA buying loans that are about to expire to also hit growth targets? We've certainly learned a lot about RL's character over the past few months. I wouldn't trust him with a dime.
Investors - LC /
« on: May 21, 2016, 11:00:00 PM »
I read that they cancelled their summer intern program, so that's one step. Leaving the interns high and dry is a pretty crappy move on LC's part though in my opinion. They're going to need to cut some engineers and other highly paid employees to really get expenses down.

The other thing to consider is you have a whole lot of employees who just saw their option "income" go up in smoke. If LC wants to retain the good ones LC will need to cut a new options deal with them, as they did with Sanborn. The rest are SOL unfortunately. I wonder what morale is like there these days. Have to be a whole lot of pre-IPO employees that are now royally pissed.
Investors - LC /
« on: May 17, 2016, 11:00:00 PM »
Just received this in my inbox:

What I don't get is why fudge the numbers for such a small amount? $3mn in loans is nothing to LC. There has to be more to the story. Unfortunately, I don't think the "more" will be good news.
Investors - LC / Nickel Steamroller: 5% LOSS on completed F notes?
« on: October 05, 2014, 11:00:00 PM »
F and G loans have the worst returns of any notes on LC after taking prepayment and credit losses into accounts and that's WITH a decent economy. Imagine how they'll perform if we have a recession. I haven't invested in any since mid last year.
I'd definitely contact LC on this one, it can't hurt. I think I would have hit the eject button back in February though.
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