Is Crowdlending a Liquid Investment?
Crowdlending is generally considered to be a less liquid investment than assets like government-issued bonds or bank deposits. The main difference lies in the ability of the investor to get the capital back at any given time. With crowdlending, capital is typically expected to be locked until the claim has reached maturity. Therefore, early retrieval of the principal is limited and may only be possible through a sale of the claim on the Secondary Market if another investor is willing to buy it.
8lends is a crowdfunding platform that offers the investors the possibility to lend to the SME borrowers. The loan term typically ranges from 4 months to 16 months. Apart from the principal that is paid when the claim has reached maturity, the investor gets interest in monthly USD payments made to their non-custodial wallet by the borrower.
Therefore, monthly interest payments should not be confused with the access to the principal. Typically, the funds attributed to the loan are expected to stay until the claim has reached maturity. This means that the original investment remains committed.
Can I withdraw my money before the loan matures?
The investor cannot directly withdraw the money before the loan matures. In order to withdraw money, the investor has to list the claim on the Secondary Market to try and find another investor who is willing to purchase it. This process is not guaranteed and depends on the demand for the claim. Therefore, the potential of early exit via the Secondary Market should be treated like a case-based mechanism, not as a baseline.
Ways Money Comes Back to You
The easiest way to understand liquidity is to separate the different routes that give the investor the options to receive USD. The table below provides a summary of these routes.
| Route | When | What it costs | Guaranteed |
|---|---|---|---|
| Monthly interest payments | Monthly while the borrower remains current | No fee | Depends on timely borrower payment |
| Principal at maturity | End of the loan term with a timeframe between 4 and 16 months | No fee | Depends on borrower repayment |
| Secondary Market sale | Before maturity if a buyer shows interest | 10% seller fee and 0% buyer fee | No |
| BuyBack on BuyB projects | After more than 60 days of delinquency | No investor fee | Not an early-exit mechanism |
| Collateral realization after default | Potentially between 1 and 12 after the start of the legal enforcement | Enforcement costs reduce proceeds | No, recovery is distributed pro rata |
Each route has a different timing, cost, and risk profile. None is equivalent to withdrawing cash from an on-demand account. The repayment of the principal when the claim has reached maturity is the standard route. The Secondary Market provides an alternative exit option without its guarantee. Likewise, BuyBack and collateral are the mechanisms that can offer additional protection to the investor, but they do not guarantee returns.
How Secondary Market Sales Work and What They Cost
The sales of the claims on the Secondary Market allow the investors to offer an existing claim (the loan) to another investor at face value or at a discount. If the investor successfully sells the claim in the Secondary Market, a seller fee of 10% is charged by 8lends. The buyer does not have to pay any fee.
How much does it cost to sell early?
To understand the cost structure of an early exit, it is important to consider the following illustrative example. Supposedly, the investor wants to allocate 1,000 USD to a loan. They purchase the claim with the term of 12 months until maturity but decide to sell it earlier, after 3 months. In this case, the investor would retain 3 months of interest payment. With the assumption that the loan itself sits at 19% APR, 3 months of interest would approximately constitute 47.5 USD in interest.
If the APR of the project is 25%, then the interest would be around 62.50 USD. The interest is calculated by multiplying the current USD pool by the APR value (in percent) and multiplying the result by the current timeframe of accrued interest divided by the overall term of the loan.
In this case, if the investor decides to sell the claim earlier, after 3 months of accrued interest, they will have to pay a seller fee of 10%. Provided the claim is sold at face value, this would mean that the investor is effectively giving 100 USD as a seller fee. This would mean that, in both scenarios, the seller’s fee (even if the claim is sold without a discount) would exceed the accrued interest on the claim.
In case of a discount, the expected returns may be even lower. Because, if the investor decides to sell a 1,000 USD claim with a discount of 20%, they are effectively paying the seller’s fee on top of a 200 USD discount. Furthermore, the investor then exits the possibility to accrue future interest for the remaining term of the loan.
Illustrative only. This calculation demonstrates liquidity mechanics rather than forecasting investment returns. Actual outcomes depend on the loan rate, timing, sale price, and whether a buyer exists.
What Determines Whether Your Listing Sells?
The success of the listing’s sale depends on multiple factors that influence demand from the other investors. The remaining term of the loan is one of the factors, as it determines how long the investor who purchases the claim can receive interest payments and when the principal is due for repayment. Another signal worth considering for the buyer is the claim’s internal credit risk score. If the project has a higher score closer to AAA, it can be more likely that the investor who purchases it may consider acquiring the asset.
Alongside credit rating goes the payment history of the borrower. If the borrower connected to the project has demonstrated timely interest payments or has a previous history of having successfully repaid principal, the buyer can be more likely to consider the purchase.
In case a project also has a BuyB badge, the buyer may also show additional interest in it. Although BuyBack is not a guarantee of return, the obligation to repurchase the loan under specific terms in case of the borrower’s delinquency provides an additional layer of protection, attempting to reduce borrower-related risk.
Why did my listing not sell?
If the listing did not sell, it is necessary to consider the possibility that the buyer did not accept the offer given the specified terms. The Secondary Market is a tool that requires the demand from another investor, and the failure to sell the claim within a certain timeframe can be expected. Demand depends on multiple factors like the existence of a BuyB badge, the borrower’s payment history, and the remaining term of the loan.
How to Plan Liquidity Before You Invest
The most effective way to plan around the exit of blockchain-powered crowdlending assets is to consider liquidity before the investment is made. That is why the calculation of risks of early exit is an essential component of a weighted investment decision.
The first part of the process is matching the loan term with the date when the investor may need the funds. If a large purchase at the end of the year is already in the investor’s plans, then it is worth considering shorter loans with the terms of maturity between 4 and 6 months. If the investor does not need money that urgently and is aimed at accumulating more interest, an investment claim that has 16 months until maturity is a plausible option.
Furthermore, it is advisable that the investor use crowdlending as a means of acquiring additional capital from the free funds. It should not be treated as an emergency fund. Because investments always carry risk, and crowdlending produces a specific borrower-related risk, it should not function as a substitution for one’s personal reserves.
On top of that, the investor can plan liquidity by using laddering or allocating funds into claims that have different terms before maturity. The investor may purchase 2 4-month claims, 4 6-month claims, and 1 12-month claim to diversify the allocation and have some portion of the funds available earlier than the rest. When the individual claim reaches maturity, the investor may successfully receive the principal back and have some capital at their disposal while the other claims are still at work.
What Liquidity Is Not
Crowdlending on 8lends is not a liquid product: exiting before maturity depends on selling your position on the Secondary Market, which is not guaranteed and carries a 10% seller fee.
The Secondary Market should not be the equivalent of a redemption facility functioning on an on-demand basis. It functions like a voluntary marketplace where the investor who acts as the seller connects to another investor who is willing or unwilling to purchase a particular claim under the given terms. Since the sale is not guaranteed, the Secondary Market cannot be perceived as a guarantor of liquidity. Likewise, BuyBack activation depends on many terms and conditions that determine whether the partner will be able to repurchase the loan. Therefore, it cannot be perceived as a static variable that increases basic liquidity.
Does BuyBack let me exit early?
No, BuyBack does not allow the investor to exit early because it applies only to the projects with a BuyB badge and activates under specific terms. The buyback option may be activated only after 60 days of delinquency of the borrower, given that the program terms still apply. BuyBack is a mechanism to protect the principal on the claim; it does not provide a mechanism for an early exit.
Fixed terms, a Secondary Market for early exits
On 8lends, investors fund real SME loans using USD, receiving monthly interest at fixed rates. Every transaction — investment, interest payout, principal return — is recorded on the Base blockchain and publicly verifiable.
Each borrower passes 40+ due diligence criteria assessed by Maclear AG and is rated AAA–D before listing. Loans are backed by real-world collateral and selected projects include BuyBack protection — returning 100% of principal if a borrower delays beyond 60 days.
FAQ
Can I withdraw my money before the loan matures?
No, typically, the investor cannot withdraw the money earlier, before the claim has reached maturity. If the investor wants to exit earlier, they can try selling the claim on the Secondary Market. However, the sale is not guaranteed and depends on the demand for the claim from another investor.
How much does it cost to sell early?
In order to sell the claim earlier on the Secondary Market, the seller has to contribute a 10% seller fee that is taken by the platform. The buyer who purchases the claim is not subject to any fee.
Why did my listing not sell?
If the listing did not sell, it means that the terms did not attract enough demand from the other investors. The demand to purchase the claim depends on the term of the loan, credit rating, BuyB badge existence, and the borrower’s payment history.
Does BuyBack let me exit early?
No, BuyBack does not let the investor exit early. Buyback is a mechanism that provides an additional layer of protection for the principal. BuyBack can be activated only after 60 days of the borrower's delinquency and under specific terms. BuyBack will not allow the investor to exit the functional position.
Is 8lends a liquid investment?
No, 8lends is not a liquid investment. The claims sold on the platform have a term between 4 and 16 months. The liquidity of the claims is limited by the option to sell the claim earlier on the Secondary Market. However, the sale is not guaranteed.
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