Learn
How lenders fund the loans they make, in plain English, with examples from the tracker. Explanations, not advice.
Guides
- How do fintech lenders fund their loans?The overview: the main ways a lender pays for the loans it makes, and how they fit together.
- What is a warehouse facility in fintech lending?The credit line most lenders use to fund new loans before they are refinanced.
- How is a warehouse facility structured?Tranches, advance rate, borrowing base, concentration limits and triggers.
- What is a forward flow agreement?An investor agrees to buy new loans as they are made, so they leave the lender's balance sheet.
- What is securitisation, and how do fintech lenders use it?Public and private deals, and the step from warehouse to term ABS.
- What is an STS securitisation?The EU and UK label, the ESMA and FCA lists, and third-party verifiers.
- What is asset-based finance (ABF)?What asset-based finance means, and the part of it this site tracks.
- Credit facility vs forward flow vs securitisation: what is the difference?A side-by-side table: who holds the loans, balance-sheet effect, typical stage.
Glossary
Warehouse facility
A credit line, usually from a bank or credit fund, that a lender draws on to fund new loans. The loans sit in a separate company (an SPV) and back the facility. Once the pool is large enough, it is often refinanced by a securitisation.
Forward flow
An agreement where an investor commits to buy a lender's new loans as they are made, up to a set amount over a set period. The loans leave the lender's balance sheet, unlike a warehouse.
Securitisation
Pooling loans in a company that issues bonds backed by them. Public securitisations are sold to many investors and usually rated; private ones are placed with a few investors.
STS
Simple, Transparent and Standardised: an EU and UK label for securitisations that meet set rules. STS deals are listed in public registers kept by ESMA and the FCA.
Senior, mezzanine, junior
Layers of a facility or bond. Senior lenders are repaid first and take the least risk; mezzanine and junior lenders are repaid later in exchange for higher interest. Fintech lenders often fund the most junior part themselves.
Advance rate
The share of the loan book's value a facility will lend against, for example 85%. The rest is funded by the lender or junior investors.
Borrowing base
The amount a lender may draw at any time, recalculated from the eligible loans in the pool, the advance rate and concentration limits.
Covenants and triggers
Limits the loan book must stay within, such as maximum arrears or defaults. Breaching one can stop new drawings or start early repayment.
Accordion
An option to increase a facility later, usually not yet committed by the funder. Announcements often quote the size including it; the tracker marks these as "up to".
Master trust
A securitisation structure that can issue several bond series over time from one pool, common for credit cards.
SPV
Special purpose vehicle: a separate company that holds the loans so they are protected if the lender fails. New SPVs in the company register are often the first sign of a new facility.
Charge (company register)
Security a company gives a lender over its assets. UK companies must register a charge within 21 days, which is why filings can reveal facilities that were never announced. Filings do not show the amount.
Revolving credit facility (RCF)
A corporate credit line the company can draw, repay and redraw. For lenders it often sits beside asset-backed funding.