Author Topic: Peer to Peer Lending - Canada  (Read 13057 times)

daverobev

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Peer to Peer Lending - Canada
« on: November 06, 2015, 01:32:45 PM »
Slim pickings so far, but one company I heard of a few months back is Lending Loop. Looks like they are trying to get the word out as they have just started up a referral program - $50 when you lend $500. There are only a few loans available at the moment, but hopefully they will get some momentum going.

Loans go from 6-7% to about 14% I think, less 1.5% which is LL's take. I believe they do not operate in Quebec, sorry.

My referral link is https://www.lendingloop.ca/lenders/sign_up?ref=c155e2

Anyone know of any others in Canada? There was something on the CBC the other day saying we'd be able to start crowdfunding businesses soon, which might be exciting... or gambling. With LL at least, it seems that they do some preliminary checks. The ones up there seem reasonable - tanning salons, yoga studios, etc who are trying to expand. It does make me somewhat nervous that your average homeowner can get a HELOC at 3-ish% - why would a business borrow at 10+%! But of course I know a business is not the same as a person.

Why do this? Well.. it's not the global stock market, it's not housing, it's not the Canadian stock market, and it's certainly not bonds/fixed rate stuff. I'm planning on putting a few $k in over the next year.

FrugalFan

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Re: Peer to Peer Lending - Canada
« Reply #1 on: November 10, 2015, 01:25:19 PM »
Thanks. I'm too nervous to try because it's so new here. But I'll keep an eye on it. What are your thoughts about what would happen if there was a major recession and people started defaulting on their loans? Are they guaranteed somehow?

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #2 on: November 10, 2015, 04:49:19 PM »
Thanks. I'm too nervous to try because it's so new here. But I'll keep an eye on it. What are your thoughts about what would happen if there was a major recession and people started defaulting on their loans? Are they guaranteed somehow?

You're an unsecured creditor, so no, no government insurance or anything. If the company goes bust, LL deals with the receivers and whatnot to try and get a share of the money back - you do not do this yourself.

My feeling is that, if you get a few loans of relatively small value going, you should be ok. But no, it is absolutely more risky than a GIC. There is a chance you will lose your loan, similar to when you buy shares, and of course unlike shares there is no chance for capital gain.

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #3 on: November 19, 2015, 10:12:51 PM »
This is really exciting -- I was part of very original CommunityLend site before the regulators began limiting peer to peer lending to only accredited investors. It's great to see that LendingLoop has found a way to make this accessible to average Canadians like us.  There are so many options in the US. 

As Dave says, this isn't a surefire way to guaranteed 10%+ returns, but it IS a viable alternative for a portion of your fixed income asset allocation and if you limit your exposure to any one individual loan, you should be able to achieve a reasonable rate of return even including any potential defaults. 

The nice thing is minimum amount for any one loan is only $50.  If you wanted to build a portfolio of a few thousand dollars, having 10-20 loans of $50 to $200 that you recycle as loans repay would be very doable.  For now though as there are still only a handful of businesses listed for funding you're either limited to putting up larger amounts per loan, or limiting your total portfolio size (anyone thinking they'll put 50k in here and find 50 loans to fund immediately will be disappointed). However the business that are on here so far look good, each includes detailed business/financial information, and most yield around 10-12% interest.

I'd expect the number of companies listed will ramp up quickly now that they are getting good media coverage (ex. recent article in Financial Post).  Companies listed for funding include tanning salon, solvent recycling business, workplace micro-markets (vending machine alternative), Yoga studio, tax service franchise...

The nice thing for now...with the $50 signup bonus once you've invested $500 it should limit your downside (click through Dave or my referral links from our signatures to qualify for the signup bonus).

nobodyspecial

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Re: Peer to Peer Lending - Canada
« Reply #4 on: November 20, 2015, 09:45:27 AM »
Is it a reasonable concern that you can get HELOC for 2.5%, business loans for next to nothing and investors are queuing up to throw money at any investment opportunity that promises more than 0.1%

So anybody who needs to go to a lending club and pay >10% have already been turned down by everyone else.
So is this junk bond profitable or sub-prime silly ?


GuitarStv

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Re: Peer to Peer Lending - Canada
« Reply #5 on: November 20, 2015, 10:04:36 AM »
Is it a reasonable concern that you can get HELOC for 2.5%, business loans for next to nothing and investors are queuing up to throw money at any investment opportunity that promises more than 0.1%

So anybody who needs to go to a lending club and pay >10% have already been turned down by everyone else.

That was my concern.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #6 on: November 20, 2015, 10:05:28 AM »
Is it a reasonable concern that you can get HELOC for 2.5%, business loans for next to nothing and investors are queuing up to throw money at any investment opportunity that promises more than 0.1%

So anybody who needs to go to a lending club and pay >10% have already been turned down by everyone else.
So is this junk bond profitable or sub-prime silly ?

I've pondered this a bit myself, but first clearly it's tax deductible - a business expense - I mean, even companies like Bell do preferred shares at 5+% - so a 14% loan, less corp tax, is still 'only' 10% or so.

Second, if a business has multiple owners, who do you want to take the money out of their HELOC? Seems like these are people who are buying out other stakeholders, maybe their money is already in the business, but the business is cash-flowing.

A decent business should make 20%+ I think.

They are relatively short term loans - 3, 4 years.

Banks can be pretty twitchy. Like, self employed? Come back in 3 years. Rapidly expanding business? Well, we need x years of accounts (yeah, by the time we have that many years of accounts, we won't NEED the money).

Don't know. I certainly wouldn't put *too* much money in. At the moment I'm thinking more than $50, but less than $1k, per loan. They are different companies, different industries, different provinces. Once you get to 10+ loans I think you're ok - VERY unlikely that the company will *immediately* go bust, even if they do after 2 years you've got a good chunk of your principal back.

I guess I'd like to have ~20 loans of $500 out there, averaging 10%, and assuming 1-2 will default at some point. So say $500 capital lost = $125 a year, but $1k in interest a year. On a rolling basis of course.

Not sure, but it seems worth a try. Better than a HISA.

TrMama

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Re: Peer to Peer Lending - Canada
« Reply #7 on: November 20, 2015, 11:24:51 AM »
following

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #8 on: November 20, 2015, 07:19:19 PM »

BarbeRiche

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Re: Peer to Peer Lending - Canada
« Reply #9 on: November 21, 2015, 09:38:33 AM »
I believe they do not operate in Quebec, sorry.

How surprising -_-

SpaceBrokoli

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Re: Peer to Peer Lending - Canada
« Reply #10 on: November 21, 2015, 01:29:30 PM »
I do like the idea but if I understand correctly, disadvantages I can think of:

- Taxation is just like a bond fund or GIC (interest income, fully taxed).
- Credit ratings for these companies are likely to be worse than junk bond ETFs.
- Liquidity is considerably less than a junk bond ETF since there is a set lock in period with LL.
- Diversification is considerably worse than a junk bond ETF.
- You can hold bond ETFs in registered to avoid taxes but this is not true for LL.

Advantages:
- Higher yields than junk bond ETFs.

So junk bond ETFs hold hundreds of securities that are also diversified globally yielding more than 5-6+% (ZHY, XHB etc) and they can be tax sheltered. I still think I debt products, whether it be LL or bond funds, should not be held in non registered accounts. Preferred shares maybe a better option due to tax sheltering if you have to have income producing assets in non registered.


The above is my basic understanding so please correct me if I am wrong.
« Last Edit: November 21, 2015, 01:31:47 PM by SpaceBrokoli »

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #11 on: November 21, 2015, 03:08:23 PM »
I do like the idea but if I understand correctly, disadvantages I can think of:

- Taxation is just like a bond fund or GIC (interest income, fully taxed).
- Credit ratings for these companies are likely to be worse than junk bond ETFs.
- Liquidity is considerably less than a junk bond ETF since there is a set lock in period with LL.
- Diversification is considerably worse than a junk bond ETF.
- You can hold bond ETFs in registered to avoid taxes but this is not true for LL.

Advantages:
- Higher yields than junk bond ETFs.

So junk bond ETFs hold hundreds of securities that are also diversified globally yielding more than 5-6+% (ZHY, XHB etc) and they can be tax sheltered. I still think I debt products, whether it be LL or bond funds, should not be held in non registered accounts. Preferred shares maybe a better option due to tax sheltering if you have to have income producing assets in non registered.


The above is my basic understanding so please correct me if I am wrong.

If you have either lots of TFSA room, or RRSP room and a high enough income, you should absolutely be using those shelters first.

If you've used or are filling your registered space in a given year already, and have extra you want to invest, and you can fit something like this in your asset alloc, great.

Note that ZPR.TO, a pref shares ETF, has dropped from $14 to $10.xx I think it is at the moment. With a LOAN, which is what LL is, your capital is only on the line in the case of a bankruptcy.

It's a different kettle of fish to a bond fund, pref. shares, etc. It is a fixed duration loan.

I'm wary, too. I hope that by spreading awareness more companies will use the service, as well as more people lending, thus allowing better diversification within this pot.

Max total net worth I will put in to p2p lending is probably 5%, vs 25%+ in real estate, and the rest in stocks.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #12 on: December 05, 2015, 09:26:48 AM »
So how many signed up? Invested?

I've got a couple that are in repayment, a couple that are pending. Something "broke" with CIBC/Scotia meaning you can't do a bill pay from those banks any more... which is very concerning (I am assuming "broke" means "the bank closed our merchant account" or however it works) - still works from RBC.

Offers are slow in coming - I guess they just don't want to end up with 30 loans that are 10% funded, so only put a handful up at a time.

However, there are a couple of seemingly low risk but high interest offers up. A Second Cup franchise in Ottawa with perfectly reasonable reasons for needing a short term loan has a high rate (13.5% before LL's take, so 12% actual).

sieben

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Re: Peer to Peer Lending - Canada
« Reply #13 on: December 05, 2015, 06:23:56 PM »
Hey daverobev,

I signed up with your referral link (put in $500 to get the bonus). I've got one loan in repayment (nothing actually paid yet though) and still waiting for another.
I'm very interested in this but I'll be waiting to see if they bring in more borrowers before I get too excited.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #14 on: December 06, 2015, 12:46:34 PM »
Hey daverobev,

I signed up with your referral link (put in $500 to get the bonus). I've got one loan in repayment (nothing actually paid yet though) and still waiting for another.
I'm very interested in this but I'll be waiting to see if they bring in more borrowers before I get too excited.

Thanks! I hear you... it does kind've work for me actually, putting small chunks in each month. Hoping to get to maybe $15k invested at 10%? Maybe $20k. Then snowball - use money coming back each month to fund new loans...

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #15 on: January 16, 2016, 04:42:58 PM »
It's been interesting to see the "rhythm" with LendingLoop -- there's about a dozen companies/loans that have been funded over the 8 weeks or so I've been a member, with 2-4 fundraising at any time.  Most loans are for $30-50k, and most 1-2yrs duration although there'v been 2 shorter term 6ish month loans. 

It's good to see a steady flow, and increasing user base, but clearly still in "startup" mode with a relatively small user base (most loans seem to take 2-3 weeks to fully fund).  My mindset is similar to Daverob, hoping to turn this into a small but steady subset of my portfolio.  I've been contributing $150-$250 per loan for now to get a hang for things, and so far so good with a number of repayments flowing back my way already (including receiving the referral bonus, which I've already loaned back out!)....but at this pace it'll take a while to build up to a more meaningful portfolio. Hopefully the number of available loans and pace they're added at will accelerate as the user base grows.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #16 on: January 17, 2016, 09:49:08 AM »
My assumption is that more money will continue to trickle into the system as more loans become available. My guess is that most people (myself included) are trying to limit their risk by pledging smaller amounts to a large number of loans. This become tricky when there are very few loans available (actually there are no open loans in the marketplace as of right now).

A friend of mine did some data-mining on the public lender list they have in the marketplace a few weeks ago. He came up with about 300 unique usernames having lent to various loans at that time. So still quite a small user base although the amounts some people have been loaning has surprised me ($5,000+).

I'm hoping that as repayments start to occur and if they can find more loans for the MarketPlace things should start heating up.

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #17 on: January 17, 2016, 07:23:32 PM »
Agreed - I've been surprised to see a handful of 3-5k loans.  Makes me wonder if they're coming from "insiders" -- ex. lending loop employees/related. Not sure if there are restrictions on them funding loans -- if they felt confident in the reliability of the businesses, contributing large amounts to ensure the loans become fully funded would be "good for business" and "good for them".  Otherwise, seems like a risky gambit for an individual investor unless they have a very significant portfolio.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #18 on: January 21, 2016, 03:14:07 PM »
So, question to anyone here that used my referral - I've got more than 20 now, but only a couple have converted! - did you sign up and are not going to use the service? Or just waiting for some decent loans to come along?

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #19 on: January 22, 2016, 08:06:34 PM »
Pleased to see the first company I recognize!  Most recently added to the marketplace is a local sustainable/fair trade chocolate producer here in Toronto that sells at local farmer markets.  Lower yielding loan as they have a healthy business, but the first loan I was actually EXCITED to make!
« Last Edit: January 30, 2016, 07:10:44 PM by frugalGreg »

sieben

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Re: Peer to Peer Lending - Canada
« Reply #20 on: January 23, 2016, 11:09:40 AM »
I think the next month or so should be interesting on Lending Loop. I'm really hoping to see some new loans start showing up on the marketplace. I added up my repayments for February (Interest + Principle) and it looks like I'll be getting a bit over $40.00.  I'm not planning on putting a ton more money in but I'll throw in a couple hundred more to get over $50/month. That way I can at least grab another loan every month while waiting to see if these guys get shut down or not ;)

FrugalFan

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Re: Peer to Peer Lending - Canada
« Reply #21 on: January 23, 2016, 01:05:46 PM »
I think the next month or so should be interesting on Lending Loop. I'm really hoping to see some new loans start showing up on the marketplace. I added up my repayments for February (Interest + Principle) and it looks like I'll be getting a bit over $40.00.  I'm not planning on putting a ton more money in but I'll throw in a couple hundred more to get over $50/month. That way I can at least grab another loan every month while waiting to see if these guys get shut down or not ;)

So how much will you have put in in total to get $50 per month back in principal and interest?

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #22 on: January 23, 2016, 05:31:42 PM »
Pleased to see the first company I recognize!  Most recently added to the marketplace is ChocoSol, a local sustainable/fair trade chocolate producer here in Toronto that sells at local farmer markets.  Lower yielding loan as they have a healthy business, but the first loan I was actually EXCITED to make!

FYI (and apparently in the T's & C's) - you're not supposed to say who any of the prospective/borrowers are.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #23 on: January 23, 2016, 05:34:36 PM »
So how much will you have put in in total to get $50 per month back in principal and interest?

Depends on the interest rate, and loan term, of course. I think by the time I get just over $1500 in I'll be getting $50 a month.

Some loans are worth doing, others less so - 13% is great, but on a 6 month loan is it even worth it? You get so much capital back each month that the interest is negligible.

Much like the banks with their "triple interest on your deposits! *for 3 months *normal rate 0.55%" (yeah thanks RBC). My wife actually opened an account with EQ Bank, which is currently offering 3%... pretty good.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #24 on: January 23, 2016, 08:34:39 PM »
I think the next month or so should be interesting on Lending Loop. I'm really hoping to see some new loans start showing up on the marketplace. I added up my repayments for February (Interest + Principle) and it looks like I'll be getting a bit over $40.00.  I'm not planning on putting a ton more money in but I'll throw in a couple hundred more to get over $50/month. That way I can at least grab another loan every month while waiting to see if these guys get shut down or not ;)

So how much will you have put in in total to get $50 per month back in principal and interest?

So I had about $1050.00 in Outstanding Principal when I calculated the $40/month. I did put a bit into the 6 month loan ;) which helped.
I did a little rough math and it looks like just over $1300 would get me $50/month back (if the new loans were the averaged out to the same term/interest as my current Outstanding Principal)

Like daverobev said it really depends on which loans you take though.

Kaspian

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Re: Peer to Peer Lending - Canada
« Reply #25 on: January 25, 2016, 01:54:13 PM »
Normally I would love something like this!  But with Canadian household debt now at 171% of disposable income (highest in the world now?  Not sure.), I'm absolutely terrified to lend a fellow Canuck cash.  Everyone's been living too high on the hog around here lately.  Like piggies at the trough of debt.  The music has to stop one day and it's gonna be weird to see everyone's actually naked.  :(

nobodyspecial

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Re: Peer to Peer Lending - Canada
« Reply #26 on: January 25, 2016, 03:00:28 PM »
Most of these are business loans.
Would Japanese household debt be your main indicator of whether to buy Toyota corporate bonds?

FrugalFan

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Re: Peer to Peer Lending - Canada
« Reply #27 on: January 27, 2016, 08:35:07 AM »
Normally I would love something like this!  But with Canadian household debt now at 171% of disposable income (highest in the world now?  Not sure.), I'm absolutely terrified to lend a fellow Canuck cash.  Everyone's been living too high on the hog around here lately.  Like piggies at the trough of debt.  The music has to stop one day and it's gonna be weird to see everyone's actually naked.  :(

I've seen you post about this a couple of times and was a bit surprised (I'm on a low information diet). So I was curious and looked it up. It is a really odd calculation, it looks at your total debt vs your disposable income (after tax, roughly). For us, this number is 227%!!! And I think we are in good shape financially. We have a primary mortgage and a mortgage on a cash-flowing rental property, so yes, a reasonable amount of debt. But the calculation ignores all assets. Our NW is just over 900k. After a bit of reading, the increase seems to be driven by the increase in real estate prices (larger mortgages) and the low interest rates (leading people to take on more debt because they can afford the monthly payments). The vast majority of the debt for Canadians is the mortgage, and the increase in the last few years has been driven entirely by mortgages (the consumer debt part has remained flat). And Canada is definitely among the highest in the world for this value, but not the highest. Moreover, assets have increased faster than debt (from 700% of income in 2000 to 900% of income today), which means that NW has increased over this time period, despite larger absolute debt values. I do think it makes Canadians a bit vulnerable to decreases in real estate prices or increases in mortgage interest rates, but I don't think it's terrible, especially in light of other measures of debt and wealth. Debt service ratios, which are a good measure of whether we can afford all this debt, are a better indicator of debt in my opinion. (The ratio of monthly debt obligations to net monthly income). In Canada, this number has been steadily declining for at least the past 25 years, and now sits at around 7% (it's about 10% in the US). So it's not all doom a gloom, especially in terms of household debt.

frugalGreg

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Re: Peer to Peer Lending - Canada
« Reply #28 on: January 30, 2016, 07:16:07 PM »
Another good semi-local company added to the Marketplace - an ontario craft brewery (who's product I just so happen to rather enjoy!), with a double digit interest rate. With some more recognizable company's (atleast recognizable to me) in the last while I've been upping the average size of my loans and like a few others on here should now be into $50/month+ of available funds for "reinvestment"...although this is still relatively small potatoes and more of a hobby/novelty and not exactly going to make anyone rich at this stage!

nobodyspecial

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Re: Peer to Peer Lending - Canada
« Reply #29 on: January 30, 2016, 10:10:59 PM »
[it looks at your total debt vs your disposable income (after tax, roughly).....So it's not all doom a gloom, especially in terms of household debt.
At the risk of upsetting Garth (greaterfool.ca) 171% isn't necessarily bad.
A couple in Vancouver with $100K income each with $50K student loan, a $10K car loan and $120K mortgage outstanding on their $1M house would be at the end-of-the-world 170% debt/income   

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #30 on: January 31, 2016, 01:38:06 PM »
[it looks at your total debt vs your disposable income (after tax, roughly).....So it's not all doom a gloom, especially in terms of household debt.
At the risk of upsetting Garth (greaterfool.ca) 171% isn't necessarily bad.
A couple in Vancouver with $100K income each with $50K student loan, a $10K car loan and $120K mortgage outstanding on their $1M house would be at the end-of-the-world 170% debt/income

50+10+120/200 = 0.9, not 1.7... Or do you mean $50k student loan and $10k car loan each? That's 240/200, 1.2.

170% would be income of $200k joint, debt $340k.

What ever - I go by 4x income-as-mortgage being reasonable. So if HHI is $200k, a mortgage of $800k on a $1mil place is still fine. The point is it's an average.

nobodyspecial

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Re: Peer to Peer Lending - Canada
« Reply #31 on: January 31, 2016, 01:49:09 PM »
I was thinking of $100K salary is $70K take home, so 170% debt is $120K
So $50K student loan each, $10k car loan and each share $50K of a $100K mortgage doesn't sound quite as scary, or as headline newsworthy, as 171% in debt - especially since it doesn't count equity in a home

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #32 on: February 07, 2016, 05:45:01 PM »
Loans seem to arrive, and get filled very quickly these days - a couple that appeared last week are already complete. New ones are trickling in. Seems to be working ok - I've had loan payments back. So far, so good... One large loan just arrived, it'll be interesting to see how long that takes to fill! Interest rate isn't the best (good or bad thing? Heh).

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Re: Peer to Peer Lending - Canada
« Reply #33 on: February 07, 2016, 06:15:43 PM »
Wonder how much of the new interest is due to people pulling their money out of the stock market this year.

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Re: Peer to Peer Lending - Canada
« Reply #34 on: February 08, 2016, 08:30:14 AM »
Oh, this thing is a drop in the bucket vs any kind of stock market stuff. All the loans combined are probably less than half a million dollars at the moment. What was the figure the other day, the amount of cash Canadians are sitting on? Billions and billions - silly amounts of money.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #35 on: February 12, 2016, 02:53:18 PM »
Have you guys noticed the one lender who's been jumping on all of the new loans? He must have pledged well over 100K in the last couple days. I'm hoping he's either very, very wealthy or he knows something we don't.
It seems like quite a risk for such a new site/service.

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #36 on: February 13, 2016, 12:14:14 PM »
Have you guys noticed the one lender who's been jumping on all of the new loans? He must have pledged well over 100K in the last couple days. I'm hoping he's either very, very wealthy or he knows something we don't.
It seems like quite a risk for such a new site/service.

Heh, I hadn't, but now that you mention it... But who knows, they might be a multi-millionaire wanting to diversify - If you've got $2mil, putting $200k in here is ok. Or, I mean, if you can borrow from a HELOC at 3.x% (tax deductible!!), lending out at 10+%.... Define "risk", right? They might've pulled a load out of a house in the USA, or US$ investments... who knows.

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Re: Peer to Peer Lending - Canada
« Reply #37 on: February 18, 2016, 03:29:17 PM »
A co-worker just had one of his loans miss a payment. It will be interesting to see what/how Lending Loop responds. :/

SoloSailor

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Re: Peer to Peer Lending - Canada
« Reply #38 on: February 22, 2016, 08:51:11 PM »
A co-worker just had one of his loans miss a payment. It will be interesting to see what/how Lending Loop responds. :/

Do you have an update on the late/missed payment? Just curious as none of the borrowers to whom I've lent have been late or missed a payment.

Thanks in advance ...

sieben

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Re: Peer to Peer Lending - Canada
« Reply #39 on: February 24, 2016, 06:43:51 PM »
A co-worker just had one of his loans miss a payment. It will be interesting to see what/how Lending Loop responds. :/

Do you have an update on the late/missed payment? Just curious as none of the borrowers to whom I've lent have been late or missed a payment.

Thanks in advance ...

Sounds like my co-worker had two loans that were unpaid for a bit. They were both paid in full the next day, there was no explanation of any kind from Lending Loop. Just a little red label in his recent payments for a day or so.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #40 on: February 26, 2016, 02:50:54 PM »
Anyone have any idea how to report LendingLoop income for taxes?
I earned a net interest of $0.47 in 2015 and I really don't know how to report this :/

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #41 on: February 27, 2016, 04:38:14 AM »
Anyone have any idea how to report LendingLoop income for taxes?
I earned a net interest of $0.47 in 2015 and I really don't know how to report this :/

Other income. What tax software do you use?

Should be line 121 I think:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/121/menu-eng.html

sieben

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Re: Peer to Peer Lending - Canada
« Reply #42 on: February 28, 2016, 07:44:16 PM »
Anyone have any idea how to report LendingLoop income for taxes?
I earned a net interest of $0.47 in 2015 and I really don't know how to report this :/

Other income. What tax software do you use?

Should be line 121 I think:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/121/menu-eng.html

Perfect, that's where I had put it. Thanks for the confirmation! :)

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #43 on: March 02, 2016, 08:22:11 AM »
Well. LL are in discussion with the regulators.

Quote
Lending Loop is currently engaging in discussions with the appropriate securities regulatory authorities. During this time, we have decided to voluntarily and temporarily halt the posting of new loan requests on the marketplace. Lending Loop will continue to service all existing loans and lenders will continue to be able to access their account, monitor their portfolio and withdraw funds at any time at no cost. In the interim, Lending Loop will continue to fund loan requests from businesses using its own capital.

Hmmmmmmmmmmmm.

FrugalFan

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Re: Peer to Peer Lending - Canada
« Reply #44 on: March 02, 2016, 08:37:39 AM »
Yeah, I saw that. I had signed up but hadn't funded any loans yet. I guess we'll see what happens.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #45 on: March 02, 2016, 05:55:58 PM »
Yeah, it'll be interesting to see how this plays out.
Not totally unexpected.

nobodyspecial

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Re: Peer to Peer Lending - Canada
« Reply #46 on: March 02, 2016, 09:39:19 PM »
Just out of interest how much did anybody investigate the company before investigating?
If somewhere in the small print it said they were actually registered in Luxemburg or Switzerland or Grand Cayman would anyone have noticed and would they still have invested?

It seems odd that they would bother to risk the Canadian authorities when the internet means they can just as easily be an offshore company.



sieben

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Re: Peer to Peer Lending - Canada
« Reply #47 on: March 03, 2016, 05:16:31 PM »
Didn't do a ton of research, this was more or less a fun experiment for me.
I did some reading on some of the folks involved in starting it up. For some reason every time I logged into LinkedIn it suggested I connect with the Lending Loop CTO.

sieben

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Re: Peer to Peer Lending - Canada
« Reply #48 on: February 25, 2019, 04:19:28 PM »
As a counter-point, I've been on LL since the beginning, and I'm winding up my account.
I haven't loaned anything in over a year so most of my loans are a bit older and I'm sitting at over 20% of the money I have out being delinquent or in default.
No idea if their doing a better job of vetting loans then they were a few years ago, but at this point between the defaults and the lack of tax-optimization I'd rather have my money somewhere else.
Best of luck to all of you of course ;)

daverobev

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Re: Peer to Peer Lending - Canada
« Reply #49 on: February 26, 2019, 02:37:45 AM »
Same as sieben. I would not advise using them.

You pay normal rates of tax on the gains (interest), but only claim capital losses on any defaults. Not worth the illiquidity. And this is at a prosperous time - imagine what it'll be like when there's a recession!

They are fairly useless. Lend $40k to someone that then dies. Oh, money's... gone? Hmmm. I wouldn't trust the ratings either. Most of mine in default are NOT the 'high risk' ones.