Signing up to Truepillars was a very straight forward process, entering in an email address and password. You then select what who you are wanting to invest as (an individual, a trust which includes self-managed super funds or as a company). From there it’s a matter of stepping through a series of straight forward questions (Name, address, tax file number, etc) to register your account. All of which took mere minutes. After that the next set is to transfer some money into your account via BPAY so you can start trading.
Once the money hits the account you are ready to invest. It is important to note any money sitting as
cash does not earn any interest. Thus to
maximise your returns, it is best to buy into loans as soon as possible. When I set up my account there were no new
loans to bid on. So I looked at the secondary
marketplace to see what loan portions people were selling off that I could
invest in.
Just to explain the difference, a new loan is a loan put
forward looking for investors to fund it. It is done via an auction style system starting
with the highest interest rate on offer and working down the range. Once fully funded, bids start lowering the interest
rate on offer to buy into the loan. This
effectively “out bids” another investor or in layman’s terms, you are offer to
invest funds into the loan at a lower rate of return then someone else. At the end of the auction the Business who
has applied for the loan is offered the weighted average interest rate of all winning
bid investors. The secondary market
place is where loans already funded through the auction process can be “cashed
out” by investors. To achieve this, you
need a new investor to buy your stake in the loan you want to cash out of to
ensure the loan remains funded to the business.
With the above in mind, I have observed the secondary market place is reasonably
active with investors buying and selling loans regularly.
I’ve also found you can browse the marketplace (both new and
secondary) without an account including what is for sale and the general
details of the loan. However to view the
additional information such as the financial statements and loan repayment history
you need to log into your account and have made a deposit that has cleared into
your TruePillars account.
Looking at the secondary market place and reviewing the
different loans currently on offer I bought into three different loans in completely
different industries with varying interest rates and remaining loan terms. The process was very straight forward by selecting
on the listing amount you wanted to purchase and clicking on the button to purchase. The money is detracted from your available
cash and the loan investment is now yours earning you the interest on the loan.
When you are logged in you can view a dashboard which
provides several different tabs detailing elements of your portfolio of investments. The summary page gives you a great overview
of where your portfolio sits, from available funds to invest (cash), live bids
and pending loans (bids won but awaiting issue to the borrower) and funds invested. I also like the running total of interest
earnt since becoming an investor and the weighted average interest rate you are
receiving on all the loans you have invested.
I also like the investments tab which shows all your loans listed out
along with when the next payment of capital and interest is due. Dropping down the loan details on the right
you can also more details about the loan including the break up between capital
returned and interest received. The
report tab gives you the ability to run a number of reports giving you an overview
or details of your investments to date.
There is the ability to set up auto-bidding on new loans but I’ve not
tried this function yet.
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