But we do have about 30% of our profile who has property
Brendan: But we do have about 30% of y our profile that features estate that is real security even though loans on their own may be similar to a busine loan, but where we could really put on real-estate as collateral therefore we aren’t entirely unsecured. If you decide to include receivables and property, both of that I think can eentially be looked at secured we have been about 48% guaranteed and perhaps 52% unsecured customer and small busine.
Peter: Interesting, interesting. Therefore then how can you select the financial institution to do business with? After all, looking for for…obviously you’ve got a return target you want going to, it is here any such thing else that you’re looking whenever you’re registering a unique deal?
Brendan: definitely, so that the initial thing that individuals place such a premium on so we want to know how the lender is planning to scale and where it will be getting its customers from in such a way so that they’re not competing against dozens of other lenders or even one or two other lenders that we want to understand is the story and that’s because unique deal flow is something. They can find those borrowers and then once they have that and we understand how they’ll scale that then we’re going to dig into their data so we want those unique relationships where. You demonstrably understand Bryce extremely well, Bryce or Dr.Mason, another pioneer in this industry that arrived aboard over an ago now and he’s our chief investment officer so bryce then digs into data year.
exactly just What we’re hunting for is two things; the very first thing of course we’re to locate could be the performance through the security in addition to 2nd thing that we’re shopping for are at the smallest amount of that the model that they’re making use of, the underwriting model that they’re utilizing to get the loans may be the way to obtain their exemplary returns. In order to imagine a loan provider that is delivering exceptional comes back, but actually does not have an underwriting model that is good.
Brendan: so we need great data showing good performance and we need to be able to connect it to an underwriting model that we believe works because it’s actually smart humans that are making the difference there and of course that won’t scale. And because we’ve seen therefore a number of these underwriting models and Bryce himself has actually built some, we’re exceptional judges regarding the relationship between good performance plus the underwriting model.
Then after that there‘s a lengthy assessment proce because we’re audited and because we hold ourselves to an extremely high standard we do plenty of installment loans Nevada exactly what are called procedures testing therefore we’re searching for the control points in the lender…where their computer software and where in fact the people intersect to do critical things like ‘okay’ a loan, cable cash, just how money is gotten and where all that money goes generally there is a complete group of tests that individuals do in order to be sure that their busine is totally buttoned down and we might even have strategies for them, we frequently do. When they’re throughout that there’s things like criminal record checks that happen and then we are able to arrive at a term sheet that is a rather long appropriate document then reach a definitive contract. It is maybe perhaps not a really long proce if we’re really interested in the lending company, however it is an extremely in level proce.
Peter: Yeah, it really appears like it. I would like to speak about the SEC therefore the filing you did…I know we composed about this on Lend Academy back January, are you able to provide us with an up-date on that and what proceeded?
Brendan: positively, and so the method this works is you file what’s called an N-2 if you’re likely to develop a shut end investment therefore we did that in December after which you obtain remarks straight back through the SEC therefore the reviews reflected a pastime that the SEC had in actually really, extremely present valuation if you appear in the succe for the two organizations which have launched in this room, they’ve both been able to do day-to-day valuation. It is really difficult to day-to-day value a loan center who has a borrowing base. Banking institutions don’t accomplish that every day, they’d typically do so from month to month and thus than we do like a buyer of marketplace loans, the conclusion that we came to is that we just weren’t going to be able to get to daily valuation and that we would be well served by pulling the N-2 which is a simple thing to do because we look far more like a bank.