Special Purpose Vehicle (SPV)

A special purpose vehicle (SPV), also called a special purpose entity (SPE), is a legal entity created within a parent company to isolate financial risk, including bankruptcy. If the SPV goes bankrupt, the parent company won’t be affected, and if the parent company goes bankrupt, the SPV will be protected. In P2P lending, SPVs are set up to house a loan, or multiple loans, on behalf of lenders, ring-fencing their funds from the platform’s assets.