How do you determine the risk band of my business?

After we receive a loan application, we evaluate whether the Borrower meets our minimum credit criteria established for Borrower loans. If the minimum criteria is met, our experienced credit assessment team performs a formal review of the loan application. 

Lending Loop has developed a proprietary evaluation and scoring system in order to assess the business' creditworthiness and assigns a risk band. The Lending Loop credit assessment team uses a number of factors in the evaluation, which may include:

  • A business credit score obtained from a credit rating agency, which may take into account payment and delinquency history, delinquency patterns, years in business, years borrowing, the business' size, and industry segmentation, among others;

  • Various financial metrics such as the business' debt service coverage ratio, debt-to-tangible net worth, and working capital ratio, among others;

  • The amount of the loan and the term-length requested; and

  • Additional pertinent information

Approved loans will be added to the Marketplace and will be assigned a Lending Loop Credit Rating. This rating, consisting of a rating from A+ through E, is intended to quantify the level of risk associated with a particular listing and corresponds to an estimated loss rate for the loan. 

Please note that the risk bands provided are Loop's evaluation of the creditworthiness of the application for the purposes of assigning a fair interest rate. The risk bands are intended to be informative only and do not in any way constitute a recommendation, a guarantee or investment advice. Each Lender must form their own opinion regarding the creditworthiness of a Borrower and undertake its own research, analysis and assessment of each borrower before committing to a loan.
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