New Lending / Borrowing Exchange

I am not sure that this will work that well. Do lenders have to wait until the borrowers pay them back? That being the case there will be far more borrowers than lenders.

In addition, there isn't actually enough cash floating around to lend to everybody who wants to borrow anyway. I think that the banks 'create' deposits using the deposits of customers as their back up. The Bank of England allows them to create deposits at a multiple of their customer deposits, so there are always more borrowers than depositors. If everybody drew their money out, there wouldn't be enough.

I wish it luck but it seems unlikely to be a fantastic success.
 
Quite right terry. Basic economics says that if you deposit £100 into a bank then they will issue loans totaling £1,000 because only 10% will be in demand at anyone time. Who the hell will want to put up £25k?
 
It would depend on the interest rates you could charge and, more importantly, if it means getting involved with the tax man. I'd also like to see a currency exchange as this is something that banks, p.o.'s etc. rip the arse out of with their "no commission" rip off exchange rates.
 
The concept will work IMO. Whether it is these guys who make a go of it remains to be seen. If it takes off, the fury of the BBA (British Bankers Association) will make the ABB (Association of British Bookmakers) look like pussycats.
 
Being too lazy to actually have a navigate around, I'd just like to ask what guarantee is there that the person you are lending money to will not default on repayments?

Superficially, at least, I can think of (have thought of, for some years, actually) more compelling (in business case terms) alternative deployments of the online person-to-person/exchange financial transaction model and software.
 
Originally posted by Ian Davies@Feb 15 2005, 10:23 PM
Being too lazy to actually have a navigate around, I'd just like to ask what guarantee is there that the person you are lending money to will not default on repayments?
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There isn't any. Your money would be spread out over 50 borrowers spreading the risk. The same credit checks are done on borrowers as by the banks. If anyone defaults a debt recovery agency is put on to them which means you may get part of the debt back. If you loan money on the site you're effectively in the same position a bank would be in loaning money, with the exception that you'll be charging less interest.

As I said earlier, it would be the tax situation that would worry me. If it's deducted at source like bank interest then there's no problem but if it makes you a self-employed money lender then that's a whole different ball game.
 
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