Investments are made by funding loans to real companies. Each project listed on the platform goes through a strict review and includes details like the borrower’s financial health, loan purpose, collateral, interest rate, term, and risk score. Investors can choose projects that match their goals and risk appetite.
Example: A logistics company requests a $50,000 loan to expand its fleet. The loan terms are 12 months with 15% APR, backed by trucks as collateral. An investor decides to fund $10,000. At the end of the term, the company must repay the loan according to the agreed conditions.
Repayments happen in two ways:
- Monthly interest: During the loan term, the borrower makes regular payments to the investor that cover only the interest owed.
- Principal repayment: At the end of the loan term, the borrower repays the original investment amount (the principal) in full.