What is Peer-to-Peer (P2P) Lending? How it works
Peer-to-peer lending (P2P) is an innovative form of borrowing and investing money without the involvement of traditional financial institutions. P2P lending is also known as "social lending", "lending-based crowdfunding", or "crowd lending". Learn how it works.
Martin Christensen • January 11th, 2023
Definitions & Terms
Lending

What is Buyback Guarantee? How it Works, Examples & Criticsm
A Buyback Guarantee obliges loan originators to buy back overdue loans from investors. The buyback guarantee is a protection mechanism for retail investors and is also often referred to as a buyback obligation. All buyback guarantees aim to protect investors from non-performing loans and to recover the investments from borrower default. This article will teach you everything you need to know about Buyback Guarantees.
Martin Christensen • September 22nd, 2022
Definitions & Terms
Lending

First-rank Mortgage Definition
First-rank mortgage (also first-rank, first-lien or senior debt) refers to the most secure available form of loan security. Senior debt takes priority over other more “junior” debt (such as mezzanine debt or equity). Learn about First-rank Mortgages and what it means for lenders and borrowers.
Martin Christensen • September 22nd, 2022
Definitions & Terms
Lending

Ring-Fence and Protection of Investor Funds
In the Crowdfunding context, a ring-fence is the act of segregating investor funds from assets of the platform. It serves the purpose of creating a barrier against any claims to a platform itself for the protection of investor funds.
Eugene Ohotnikov • July 18th, 2021
Definitions & Terms
Lending

What is Balance Sheet Lending? How is it different from P2P Lending?
In balance sheet lending (also called portfolio lending), the platform entity provides a loan directly to a consumer or business borrower. The loan is on the platforms balance sheet. The loan process is direct, like working with a bank.
Jonas Schmidt • February 2nd, 2021
Definitions & Terms
Lending

What Is a Secondary Market?
Secondary markets in peer-to-peer lending are marketplaces that allow you to buy and sell already funded loans after the repayment period has begun. Lenders use it to exit loans early. Investors use it to allocate or earn a return from re-selling.
Jonas Schmidt • February 2nd, 2021

The History of Crowdfunding
The history of crowdfunding goes back to 1200 when crowds financed shipping ventures, but the game changed with the internet. Crowdfunding as we know is a recent innovation but the history tells the story: Crowdfunding is here to stay.
Jan Bednorz • December 1st, 2020
Definitions & Terms
Philanthropy

Understanding Collateral in Real Estate Crowdfunding
This article helps you understand real estate collateral. There is a difference between secured vs. unsecured loans. There’s also a degree of confusion: are unsecured loans really so scary? Are secured loans totally safe?
Jan Bednorz • November 3rd, 2020
Definitions & Terms
Real Estate

What is Litigation Crowdfunding?
Not a long time ago, crowdfunding was a niche associated mostly with local charities or struggling rock bands. Today it is possible to crowdfund a court case through litigation crowdfunding. But how exactly does litigation crowdfunding work?
Jan Bednorz • September 2nd, 2020
Definitions & Terms
Venture

The History of Peer-to-Peer Lending
Online P2P lending began in 2005 with the launch of Zopa in the UK. Back then “shady”, or "niche" at best, was eagerly used words to describe the sector. Fifteen years on, people lend and borrow billions. Here is the history of P2P Lending.
Jan Bednorz • August 14th, 2020
Definitions & Terms
Lending

Provision Funds in P2P Lending: Protection in Case of Loan Defaults
Provision funds helps to reduce the risk of investing in P2P lending by creating a safety buffer that P2P platforms can use to anticipate unforeseen circumstances. The goal is to offer a higher level of protection against losses. Does it work?
Jonas Schmidt • June 25th, 2020
Definitions & Terms
Lending

Reward Crowdfunding Explained
Reward crowdfunding is a very popular way for startups and entrepreneurs to receive the necessary capital in order to initialize the first steps of getting a business up and running. This is mostly done by pre-selling a product to fund the campaign.
Jonas Schmidt • April 20th, 2020
Definitions & Terms
Philanthropy
