What risks are associated with purchasing Smart Products through SmartMonday?

1. Credit risk/Default risk.

There is a possibility that the borrower will not make future scheduled payments; as a result, the investor may lose part or all of the investment made. The amount of possible loss, would depend on the type of loan. For example, in the case of default on a secured loan, such as a mortgage or property security (loans given are typically business loans with a property as a security), the repayment of the loan would be made by first realizing the collateral, and second by trying to recover outstanding amounts from the borrower.

2. Cash flow timing risk.

All payments from an investment in a loan are directly linked to the actual payments done by the borrower. There may be situations in which the borrower makes a payment after the scheduled payment date; as a result, the investor may receive cash flows later than expected.

3. Prepayment risk

The borrower usually has an option to repay the loan early, which is usually done by repaying the principal and accrued interest up to the date of early repayment. In the event the investor had made the investment at a premium, the unamortized part of the premium would be lost. In order to minimize any of the above-mentioned risks, investors can diversify their investments across different borrowers, loan products, loan originators, geographies, or platforms.

4. Liquidity Risk

Your portfolio is at risk of being illiquid. There is an active secondary market for the assignment of your claims, however liquidity is dependent on user demand. For a successful loan that is being repaid on time by the borrower, there is a risk you will not be able to exit your claim until the underlying loan expires.

5. Financial Compensation

Your claims are not covered by any financial compensation scheme.

6. Advice

Smart Monday does not give investment advice or provide analysis or recommendations regarding financial opportunities. The Company takes no responsibility for this information, or for any recommendations, opinions or predictions.