Loan Profile – Key Risks

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Kylie Greeff
11th October 2017

We’ve recently updated the layout and information displayed to lenders on each of the loan listing profiles. These changes have been made to make the information about each of the lending opportunities easier for you to digest and for you to make a more informed lending decision each time you choose to lend to a business.

The listing overview page will now be divided into four key sections, all visible on one page. These sections are ‘About the Business’, ‘About the Loan’, About the Risks’ and ‘About the Security’.

The most significant changes to the loan listing profile is the ‘About the Risks’ section. This is a brand-new addition to each listing. This section will not only show you the risk rating of the particular loan, by hovering over the risk rating you will be presented with the historic performance of other loans funded on the platform of the same rating. The historic performance will show the default rate as well as the bad debt rate of all loans of the same rating.

About the risk - Default

Why is this information important to you?

As a lender, you need to make a decision on when to lend and which businesses you want to lend to. In order to make a more informed decision, you need to understand that regardless of the business or the rating assigned to it, there is a chance that the loan will fail. The Default and Bad debt rate indicate the past performance of similar loans, which you can take into account when lending.

About the risk - indicators

The second major change to the listing profile is the new addition of ‘Key Risk Indicators’. This section will highlight some of the key risks that we may have identified during our initial underwriting and screening process.

You can view a general description about each of the indicators by hovering over the indicator with your mouse. These indicators are made visible to help you in your lending decision by a) making you aware of risks you may have missed b) allowing you to investigate further and ask relevant questions. The key risks displayed are not necessarily the only risks associated with the business, simply those that we have identified.

Key Risk - Indicators - Hover

What should you do with the information?

Where key risks have been highlighted on a loan, this does not necessarily mean that you should not lend to the business, all lending carries risks.

You should use this information to help further your own analysis of the business, use it to ask your own questions of the business or use it to rule out the business as a loan for you. All loans that are listed on the platform have been through an initial assessment by ourselves and have met our standard lending criteria and have been deemed good enough to list on the platform for your further consideration. We provide lenders with a variety of lending opportunities to suite the breadth of different lenders on the platform, a loan listed on the marketplace is not an indication of a ‘safe loan’, it represents an opportunity for you to consider.

Secondary Market

 

All new loans listed on the primary market have been updated to include the new risks. We’re currently going through the secondary market and updating each loan profile, so that the key risk indicators will be visible on all loans that have already been funded, helping you make better secondary market purchases.

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