Glossary
Alternative Investment
An alternative investment is an asset that is not a conventional investment type, such as shares, bonds and cash.
AML
Anti-Money Laundering (AML) specifically refers to all policies and regulation that force financial institutions to proactively monitor their clients in order to prevent money laundering and corruption. These laws also require both that financial institutions report any financial crimes they find and that they do what is possible to stop them.
Amortisation
Amortization is the gradual repayment of a debt over a period of time. These payments often are an aggregate of the interest accrued as well as the principal owed.
APY
Annual Percentage Yield (APY) is the yield on aninvestment in one year, taking into account the effects of compounding
Asset Class
An asset class is a group of investible financial instruments {securities, financial assets) that exhibits similar characteristics, behaves similarly in the marketplace, and is subject to the same laws and regulations. In the public markets, there are three main asset classes: equities (stocks), bonds, and money market instruments. In alternative investing, asset classes can include properties, commodities, cryptocurrencies, etc.
Collateral
Collateral is an asset pledged to a financing provider as a guarantee for repayment of a loan. It is to be forfeited to the financing provider in the event of a default.
Compound Interest
Compound interest is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.
Credit Risk
Credit risk or counterparty risk is the risk associated with the other party to a financial contract not meeting its obligations. It is the likelihood or probability that one of those involved in a transaction might default on its contractual obligation.
Debt Securities
A debt security is a financial instrument issued by an entity and sold to an investor. The security has a loan as its underlying asset and it represents an obligation for the investor to be paid back the face value plus interest income as the instrument matures. The most common type of debt security are bonds such as corporate bonds or government bonds.
Default
A failure to make scheduled loan payments when they come due is considered a default. The consequences of a loan default depend on whether the debt is secured or unsecured. A secured loan is debt that's related to a specific asset. If you default on a secured loan, the financing provider might respond by claiming the underlying asset.
Disbursement
A disbursement is a payment from an investment. For example, in an amortizing investment, disbursements of principal and interest are made periodically in accordance with the amortization schedule. In non-amortizing deals, disbursement is made in a lump sum upon deal maturity.
Distributed Ledger Technology
Distributed ledger technology is a consensus of share, and synchronized data dispersed across multiple nodes or sites. There is no central administrator of data, but rather a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently. The lack of authority allows for a source of truth that is immutable.
Due Diligence
Due diligence is an investigation or audit of a potential investment opportunity or product to confirm facts and/or uncover risks. Due diligence refers to the research done before entering into an agreement or a financial transaction with another party. For example, when purchasing a business the investor may want to review financial records or visit the business in person. We have a stringent due diligence process as a part of the company risk framework.
Etherscan
Etherscan is the leading BlockExplorer for the Ethereum Blockchain. A BlockExplorer is essentially a search engine that allows users to easily lookup, confirm and validate transactions that have taken place on the Ethereum Blockchain
First Loss Cushion
In the context of a note, the first loss cushion is a form of credit enhancement that requires originators to absorb a percentage of any losses from the asset pool to a predetermined point provision.
IRR
NPV= net present value T= number of time periods Ct= total net cash flow during period t C0= total initial investment costs r= discount rate

IRR is the rate of return that equates the present value of an investment's expected gains with the present value of its costs. It's the discount rate for which the net present value of an investment is zero. In other words, it is the ROI discounted for future cash flows.
Invoice Factoring
Invoice Factoring is a financial transaction and a type of debtor finance. In an invoice factoring, a business sells its accounts receivable (e.g. invoice) to a third party (called a factor) at a discount. A company will sometimes factor its receivable assets to meet its present and immediate cash needs. It might also factor their invoices to mitigate credit risk.
KYC
Know Your Customer (KYC) is a regulatory bank customer identity verification practices to assess and monitor customer risk and a legal requirement to comply that are intended to prevent banks from being used for money laundering activities. KYC is one of the several identity verification processes used by our platform.
Lien
A right to keep possession of property or assets belonging to another counterparty until a debt owed by that person is discharged.
LTV
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
MPA
A master participation agreement (MPA) is the legal contract transferring economic ownership of underlying assets from originator to SPV while maintaining originator servicing of underlying assets.
Origination
The moment and process of entering into a financial contract. For a lender, accepting an application and extending a cash advance or a loan results in the "origination" of a new financial asset.
Participation Interest
Participation interest refers to the percentage of total assets purchased by Percent from the originators existing portfolio.
PPM
A Private Placement Memorandum (PPM) is a document providing information about a proposed private placement of securities, where a company sells securities to select investors, rather than releasing them to the public.
Regulation D
In the United States, under the Securities Act of 1933, any offer to sell securities must either be registered with the United States Securities and Exchange Commission (SEC) or meet certain qualifications to exempt them from such registration.

Regulation D (Reg D) is a SEC regulation governing private placement exemptions. Reg D offerings are advantageous to private companies or entrepreneurs that meet the requirements because funding can be faster to obtain and less costly than with a public offering.
Restricted Investors
A Restricted Investor is someone who is less experienced making similar types of investment. These are investments in unlisted companies (such as debentures, bonds or shares) or peer-to-peer investments, that can't be bought or sold on a stock exchange and are called non-readily realisable securities by the FCA. As a Restricted Investor you must confirm that you will limit the amount you invest in these types of investment so that you are not investing more than you can afford.
Revolving Loan
A loan arrangement that allows for the loan amount to be withdrawn, repaid, and redrawn again any number of times, until the arrangement matures.
ROI
ROI is the percent difference between the current value of an investment and the original value.
Securitisation
Securitisation, the practice of pooling together various types of debt instruments (assets) such as SME loans, supply chain invoices and selling them as debt securities to investors
Sophisticated Investor
A Sophisticated Investor is someone who has more experience making the same types of investment. These are investments in unlisted companies (such as debentures, bonds or shares) or peer-to-peer investments, that can't be bought or sold on a stock exchange. They include investments the FCA call non-readily realisable securities and speculative illiquid securities, however we will only promote speculative illiquid securities to Sophisticated Investors.
Smart Contract
Smart contracts are self-executing contracts with the terms of the agreement between counterparties being directly written into lines of code. Smart contracts permit trusted transactions and agreements to be carried out among counterparties without the need for intermediaries. They render transactions traceable, transparent, and irreversible.
SME
Small to Medium Enterprises
SPV
A special purpose vehicle is a "bankruptcy-remote entity" that a parent company uses to securitise assets or other financing structures. SPV operations are limited to the acquisition and financing of specific assets as a method of isolating risk.
Subordinated Debt
Subordinated debt is an unsecured loan that ranks below other, more senior loans or securities with respect to claims on assets or earnings
Vintage
Vintage is the time period when a financial asset was originated. Also, assets originated during the same calendar period are said to collectively comprise a "vintage." For example, if a lender made a loan on 7 August 2020, that loan's vintage would be "August 2020." Further, all loans originated that month could be called the "August 2020 vintage." One way of measuring underwriting quality is to track past vintages over time.
Wallet Address
When you invest in a deal, a digital security is issued to represent your investment on-chain. We do not have our own token. All transactions are immutable and traceable but at the same time anonymised. Each address represents an investor and tracks their investment activity.
Working Capital
Working capital is the money a business uses in its day-to-day trading operations. It is calculated as the current assets minus the current liabilities.