The lending platforms offer information about the credit-worthiness of the borrower, and investors then take positions in the notes in what is essentially an auction. Investors usually accept fractional shares in large numbers of individual notes so that the occasional default will not significantly impact their returns. Once a note attracts sufficient investors, a loan is originated and serviced. Platforms charge borrowers a one-time origination fee and lenders a monthly service fee.
Marketplace loans are typically funded by specific individuals or institutions that are lending their own money, often on a fractional basis, at interest to specific borrowers. For example, a note of $100,000 to a small business may be funded by $1,000 investments from 100 different lenders. Interest rates are a function of the calculated risk that the borrower will repay the loan and range from as low as 6 to as high as 25 percent. As borrowers repay the notes, the principal and interest
payments are apportioned to the individual lenders in proportion to their fractions.
Each marketplace lender deploys sophisticated underwriting algorithms to assess the credit-worthiness of borrowers. Lending Club, for example, rejects individual applicants with FICO scores lower than 660 and debt-to-income ratios below 30 percent, a set of thresholds that it says excludes over 80 percent of applicants.
This article is a sidebar to Marketplace Lending to the Rescue
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
