When a Borrower makes a Borrowing Request, they are requesting bids from a single Lending Member or Multiple Lending Members to lend money to the Borrower on an individual basis. In most cases multiple Lending Members will have made bids to lend for a specific Borrowing Request, it would therefore be onerous for the Borrower and Lender for each Lending Member to sign individual Loan Documents with the Borrower. The Ablrate Platforms’ purpose is to make this process more efficient by facilitating the individual Loans from Lending Members to be sent to the Borrower as an Aggregated Amount on behalf of Lending Members. We do this by completing the Loan documents on behalf of Lenders as Agent (or on behalf of the Borrower as the Borrowers’ Agent) and keeping records within our system of the Lending Member of record.
Each Loan, therefore, is a separate and individual Loan which is contractually between the Lending Member and the Borrower. Each time your bid is accepted by a Borrower on the Primary Market of Ablrate, you will receive an agreement detailing the loan between you and the Borrower. Subsequently, if you *sell any of that loan or *buy any more of that loan your entire agreement will be cancelled and you will simultaneously be issued with a new agreement detailing the reduced or increased amount being loaned to the Borrower.
Ablrate receives installment payments on the Loan into the Ablrate Client Account and allocates the prorated amount of capital and interest to the Ablrate Account of the Lending Member. The Lending Member can direct those funds to be withdrawn or may re-allocate them into another, separate Borrowing Request.
Ablrate does not pool funds (other than in a designated Client Account where your funds are identified individually through the Ablrate Platform in your Ablrate Account) and does not direct those funds into Loans on a discretionary basis. This would create a management of your funds and we do not, and will not, perform this function.
The Lending Member is, at all times and in all circumstances, responsible for making an informed decision about whether to make a bid for a portion of a Borrowing Request.
*We use words such as ‘Buy’, ‘Sell’, ‘Bid’, and ‘Offer’ for ease of understanding. There is no transference of loan amounts, a ‘sale’ is a repayment to the Lender and a ‘purchase’ is a new loan made by the Lender.