Marketlend offers a new solution to Institutional Investors
In December 2014, Marketlend launched in Australia, and has begun to build a pipeline of business loans. Using securitisation methodology and developed software tested in the UK market, it is set up for economies of scale.
Offering business borrowers direct access to investors is its theme, and it offers a safe and transparent investment environment to the investor.
Marketlend purchases the subordinated debt, the first loss piece, and offers a hands on solution for the matchmaking of borrowers and lenders.
For institutional investors to acquire small business loans, working capital and commercial property loans originated by Marketlend, Marketlend offers a tool called “Invest Now”.
At Marketlend, large institutions can create an account and have their own trust that purchases securitized loan or a loan package in the form of bonds from Marketlend on an automated basis, using the Invest Now option and receive monthly or daily principal and interest payments.
CEO and Founder, Leo Tyndall says:
“Marketlend has designed a system that reviews the eligibility criteria of the investor and randomly selects the loans or parts thereof that are to be financed through the marketplace “
“This solution also offers surety in funding, and quicker turn around times for borrowers”
“it revolves around diversity and spread of the risk, each investor is issued bonds where underlying security is the loan. The loan is in its own trust and has its own independent trustee and security trustee.”
Unlike Society One, RateSetter and upcoming startup Money Place, Marketlend only lends to small businesses and believes its loans are most used for growth purposes as opposed to debt consolidation or for personal reasons.
Marketlend enables institutional investors to provide warehouse lines.
Loans are priced based on the risk grade and a bidding process by the investors, after a range relevant to the risk is set by Marketlend. The risk grade is determined using the company’s proprietary credit-scoring tool that analyses large volumes of publicly available data and individual factors to evaluate the credit risk.