Risks and how we handle them

• Can I withdraw invested capital at any time?

  Life happens. Whether it is a foreseen or an unforeseen event, sometimes, you may have to withdraw the money you at one point wanted to invest. Therefore, SaveLend offers a secondary market where you can sell your investments to other investors.

  How the risk is managed:

  • Using our secondary market, you can sell the loans you’ve invested in to other investors on the platform for a fee. This enables you to quickly liquidate money that you in turn can withdraw to your bank account.
• What happens if a borrower does not follow the payment plan?

  If a borrower (company or person) whose loan you invested in is unable to repay their loan, there is a risk that a loan won’t be repaid.

  How the risk is managed:

  • One way to mitigate this risk is to invest in loans with a buyback agreement. This way, if a borrower does not repay a loan that you have invested in, your share is sold to a debt collection company. Note that the debt collection company pays a reduced price for your share, but in return a majority of your capital is freed up. This enables you to reinvest your capital directly, instead of locking the money up in debt collection processes which, in some cases, can take several years.
  • Invest in loans with some form of collateral, such as real estate loans through our originator SKF. Collateral on a loan is a guarantee that, if the loan turns bad, the borrower has underlying securities that in turn can be sold to repay their loan.
  • All loans that are available for investment on SaveLends plattform are all presented with a target interest rate. In addition to the loan’s actual return, the target interest rate takes into account, among other things, the asset classes’ estimated risk of credit losses. In general, loans with higher risk of credit loss are balanced by higher actual interest rates - which is the underlying principle of the target interest rate.
  • Adjust Smartinvest so your capital is automatically divided among several different asset classes and originators. This minimizes the total impact on your portfolio if a loan you have invested in turns bad.
• What happens in case of late repayments?

  There is a risk that a borrower is unable to repay a loan on the due date, but might be able to pay at a later date.

  How the risk is managed:

  • Invest in loans where penalty interest is added for late repayments. In the SmartInvest settings on SaveLend's platform, you can easily see which loans offer penalty interest.
• What happens if part of your capital is not invested?

  In order for you to get a return on your capital, it must be invested in loans. If you have capital at SaveLend that is not invested in loans, that is a risk in itself. Our goal is that an investor that has all originators activated should have an investment ratio of 100%, meaning that all of the available capital is invested.

  How the risk is managed:

  • Activate SmartInvest and make sure that your settings are not too limited. SmartInvest automates your investments, meaning that our system will automatically place your capital into loans that match your set criteria.
• What happens if an originator goes bankrupt?

  The loans available for investment on SaveLend's platform are provided by external originators. If an originator goes bankrupt, it involves a risk.

  How the risk is managed:

  • Before SaveLend allows an originator to publish its loans on our platform, they are first vetted by our strict compliance team. Our compliance team ensures, among other things, that the loan intermediary follows good lending practices and has a good historical return in their loan portfolio. This is done in order to ensure an overall high quality of the loans available to invest in on SaveLends platform.
  • Based on the above-mentioned compliance checks, a target return is determined for each asset class provided by the originator. The target return provides an estimate of the return that the asset class can be expected to provide after credit losses and fees.
  • It is a good idea to balance your investments in different asset classes and originators to mitigate the risk of credit losses. This is easily done with the help of SaveLend's automated investment engine, SmartInvest.
• How is the risk of SaveLend going bankrupt mitigated?

  Should SaveLend, against all odds, go bankrupt, there are several precautionary measures that will be taken in order to protect you as an investor. However, it is still a risk.

  How the risk is managed:

  • SaveLend has a permit from the Swedish Financial Supervisory Authority, which supervises that SaveLend complies with applicable regulations and ordinances. This is handled, among other things, through continuous reporting to the FSA.
  • SaveLend has an independent internal accountant who ensures that there are routines and processes in place to make sure that we comply with all applicable regulations.
  • SaveLend has a risk management framework, where different kinds of risks are monitored and managed continuously. If events or circumstances that could lead to bankruptcy occur, these risks would be cautioned in an early stage, and measures would be taken immediately to prevent this from happening.
  • SaveLend has an independent risk function that reviews and follows up the company's risk management framework.
  • SaveLend has an authorized accountant who reviews the financial reports and follow-ups in order to take action at an early stage if necessary.
  • As an investor, you own the claim of the loans you invest in, not SaveLend. This means that you have the opportunity to have your investments repaid directly from the originator.
• How can law changes affect SaveLend?

  SaveLend always acts according to the regulatory conditions. Therefore, if new laws or regulations are introduced that partially restrict or completely prevent SaveLend from operating, it entails risk.

  How the risk is managed:

  • SaveLend continuously monitors updates and changes in laws and regulations that could affect the company. This means that we can continuously take the necessary measures to comply with them, as well as update our operations to act according to the new conditions.
• How can the market affect SaveLend?

  The market is in constant change and the value of investments can be negatively affected by this. It is important to remember that this is always a risk when you invest. This includes market changes such as, for example, pandemics, financial crises, or geopolitical crises. These events tend to affect entire markets, causing stress beyond the risk of losing assets.

  How the risk is managed:

  • Diversify your investments in different loan types and geographical areas.
  • If you are in need of money due to unexpected events, you have the opportunity to sell your investments on the secondary market.