Saving Stream specializes in secured transactions – previously against the value of luxury yachts, but lately against a broader range of assets. Lendy Ltd. – an associated fund, run by SavingStream’s management team – underwrites all loans originated via the platform and then syndicates those loans out to the crowd. The model is not dissimilar to the Wellesley & Co. structure, where some Lendy capital remains at play throughout the process.
The newly-minted provision fund has been created in order to compensate Saving Stream investors in the event of a defaulted loan if for some reason that loan is not fully covered by the security held. Claiming from the provision fund in the event of a shortfall is not a foregone conclusion – and will require assessment. The provision fund, which has been initially financed by Lendy's shareholders, does not guarantee SavingStream loans. It will provide at least 2% coverage of the platform’s loan book at all times. Going forward, a small proportion of all loan fees will be channeled into the provision fund.
The current size of Saving Stream’s loan book, the value of its security held and the provision fund balance have been disclosed by the platform as:
Security held: £24,644,000
Live loan book: £12,217,000
Provision fund balance: £244,340
The platform has been at pains to stress that the presence of this provision fund does not guarantee investor returns in the event of a default, and that investments made via the platform will continue to carry varying degrees of risk.