But we do have about 30% of y our portfolio that features property
But we do have about 30% of our profile that features real-estate
Brendan: But we do have about 30% of our portfolio which includes estate that is real security even though the loans on their own could be a lot more like a busine loan, but where we are able to really affix to real-estate as security therefore we aren’t entirely unsecured. I think can eentially be considered secured we are about 48% secured and maybe 52% unsecured consumer and small busine if you were to add receivables and real estate, both of which.
Peter: Interesting, interesting. Therefore then just how do you decide on the lending company to work well with? After all, looking for for…obviously you’ve got a return target you want to hit, it is here any such thing else that you’re looking whenever you’re registering a brand new deal?
Brendan: Absolutely, so that the very first thing that people 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 a year ago now and he’s our chief investment officer therefore bryce then digs into information.
Just What we’re hunting for is two things; the very first thing of course we’re trying to find may be the performance through the security together with thing that is second we’re shopping for reaches minimal that the model that they’re making use of, the underwriting model that they’re utilizing to score the loans may be the supply of their exemplary comes back. To help you imagine a loan provider this is certainly delivering exceptional comes back, but actually does not have a good underwriting model.
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 really built some, we’re exceptional judges associated with the relationship between good performance in addition to underwriting model.
Then after that there‘s a lengthy evaluating proce because we’re audited and because we hold ourselves to a really high standard we do lots of what exactly are called procedures testing therefore we’re trying to find the control points in the lender…where their computer software and where in fact the people intersect to do critical such things as ‘okay’ a loan, cable cash, just how cash is gotten and where all of that money goes generally there is a complete pair of tests that people do in order to be sure that their busine is totally buttoned down and we also could even have suggestions for them, we frequently do. As soon as they’re throughout that there’s things like criminal record checks that happen and then we could arrive at a phrase sheet that will be a rather long appropriate document and then arrive at a definitive contract. It is maybe maybe maybe not a really long proce if we’re really interested in the lending company, however it is a rather in level proce.
Peter: Yeah, it surely seems like it. I would like to speak about the SEC plus the filing you did…I’m sure we had written about it on Lend Academy back January, is it possible to provide us with an enhance on that and what https://installmentloansgroup.com/installment-loans-pa/ continued?
Brendan: positively, therefore the method this works is you file what’s called an N-2 then you get comments back from the SEC and the comments reflected an interest that the SEC had in really very, very current valuation and if you look at the succe of the two firms that have launched in this space, they’ve both been able to do daily valuation if you’re going to create a closed end fund so we did that in December and. It is really difficult to value that is daily loan center which includes a borrowing base. Banking institutions don’t do this every day, they might typically do so on a month-to-month foundation and thus because we look much more such as for instance a bank than we do such as for instance a customer of market loans, the final outcome that people stumbled on is we just weren’t likely to be in a position to get to daily valuation and therefore we might be well offered by pulling the N-2 which can be an easy move to make.