Author Topic: LC's growth cycle  (Read 2020 times)

edward

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LC's growth cycle
« on: April 06, 2013, 05:55:29 PM »
For you long term investors, please help a newbie out. Over my five months since becoming aware of LC, opening my account, and reading a great deal of this forum, I've watched the number of notes available drop from 1000+ to only several hundred at most times now.

Clearly we know that LC is growing in volume and number of notes, and I've read comments on this forum about (1) the ability of LC to control the number of notes through advertising and changing of loan requirements; and on the ther hand, (2) the time necessary to fund the notes shortens while the time in review seems to grow. 

Is this just the normal cycle of LC-- grow, get overloaded, catch up, evaluate conditions (macro economics, borrower credit profiles, default rates, etc.), fine tune the system, advertise more, and then grow more?

Over the long run does the number of notes just naturally grow and shrink or is this seeming shortage (to me) something new?

Zach

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Re: LC's growth cycle
« Reply #1 on: April 06, 2013, 09:36:41 PM »
For you long term investors, please help a newbie out. Over my five months since becoming aware of LC, opening my account, and reading a great deal of this forum, I've watched the number of notes available drop from 1000+ to only several hundred at most times now.

Clearly we know that LC is growing in volume and number of notes, and I've read comments on this forum about (1) the ability of LC to control the number of notes through advertising and changing of loan requirements; and on the ther hand, (2) the time necessary to fund the notes shortens while the time in review seems to grow. 

Is this just the normal cycle of LC-- grow, get overloaded, catch up, evaluate conditions (macro economics, borrower credit profiles, default rates, etc.), fine tune the system, advertise more, and then grow more?

Over the long run does the number of notes just naturally grow and shrink or is this seeming shortage (to me) something new?

This is unfortunately something that investors will continue to see as a result of shorter funding times and not enough staff at LC to process and review the number of loans posted/funded on the platform in a timely manner. In some ways it will likely decrease in length of time, but I don'timagine that significantly.

As myself and others have noted in past, it seems that LC should seriously consider reviewing loans for credit approval prior to posting to the platform. This would reduce the investing time-lag, and the investor effort to purchase notes when only about 50% of loans get issued anyway (about 2-weeks later).

Fred

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Re: LC's growth cycle
« Reply #2 on: April 07, 2013, 07:17:07 PM »
An alternative explanation: the growth of investors is much higher than that of borrowers.

Laslow

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Re: LC's growth cycle
« Reply #3 on: April 10, 2013, 06:23:06 PM »
It's definitely frustrating how slowly I can deploy funds at LC. My filters are quite broad (D-G notes with the riskiest loans filtered out), I'm shooting for around a 14% ROR, yet I'm usually only able to deploy a couple hundred dollars per day, and this is with putting $75 in notes of higher quality. I feel it shouldn't be a challenge to invest $5k a month with my current strategy, but somehow it is. We need more borrowers for sure.