But we do have about 30% of our profile who has estate that is real

But we do have about 30% of our profile who has estate that is real

But we do have about 30% of our profile which have estate that is real

Brendan: But we do have about 30% of our portfolio which have estate that is real collateral even though the loans on their own could be more like a busine loan, but where we could really affix to real-estate as security so we aren’t totally 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 do business with? After all, are you searching for…obviously you have 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, therefore 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. Therefore we want those unique relationships where they could find those borrowers then after they have that so we know the way they’ll scale that then we’re going to dig within their information. You clearly understand Bryce extremely well, Bryce or Dr.Mason, another pioneer in this industry that arrived aboard more than an ago now and he’s our chief investment officer so bryce then digs into data year.

Just just What we’re searching for is two things; the very payday loan today first thing of course we’re searching for may be the performance through the security plus the thing that is second we’re shopping for reaches the smallest amount of that the model that they’re utilizing, the underwriting model that they’re utilizing to get the loans may be the way to obtain their exemplary comes back. To help you imagine a loan provider that is delivering exceptional comes back, but actually does not have an underwriting model that is good.

Peter: Right.

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 regarding the relationship between good performance as well as the underwriting model.

Then after that there‘s a lengthy assessment proce because we’re audited and because we hold ourselves to a really high standard we do lots of exactly what are called procedures testing therefore we’re trying to find the control points in the lender…where their computer software and in which the people intersect to do critical things like ‘okay’ a loan, cable cash, exactly how cash is received 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 wholly buttoned down and then we might even have tips for them, we frequently do. When they’re throughout that there’s things like criminal background checks that happen after which we are able to arrive at a term sheet which can be a fairly long appropriate document then arrive at a definitive contract. It is maybe not a really long proce if we’re really interested in the financial institution, however it is a tremendously in level proce.

Peter: Yeah, it really appears like it. I do want to speak about the SEC and also the filing you did…I’m sure we published about any of it on Lend Academy back January, could you provide us with an enhance on that and what continued?

Brendan: definitely, therefore the way 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’s really difficult to value that is daily loan center that features a borrowing base. Banking institutions don’t do this every day, they might typically take action 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.

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