Percent is the platform for private credit investments. Yet private credit investments are not a monolith. There are numerous types and sub-types of private credit investments, all with their own unique purposes, offering structures, and more.
The Percent platform offers multiple private credit asset classes. Each class is offered by specific borrowers, and all Percent-underwritten borrowers must go through Percent’s due diligence process before an offering (with ongoing diligence post-close).
Get to Know Percent’s Asset Classes
Small and Medium-Sized Business (SMB) Financing: This asset class provides loans and merchant cash advances to small and medium-sized businesses. These loans help small businesses finance their expenses. Small businesses may have trouble getting loans, in which case they turn to non-bank lenders for financing, who in turn give Percent investors access to said loans as investments.
Small and Medium-Sized Business (SMB) Leases: A way for businesses to finance their investments in equipment without buying said equipment outright. Similar to SMB Financing, but solely focused on equipment required to conduct and expand business.
Discounted Receivables: Companies use this asset class to get capital to bridge part or all of the gap between receiving orders and the final delivery of goods to the customer. Also known as factoring.
Consumer Loans and Consumer Advances: Consumer loans and advances include residential mortgages, personal loans, “Buy Now, Pay Later” installment loans, credit cards, earned wage access (or payday advance), and many other forms of consumer debt. Investments in these asset classes can be individual or, in the case with past Percent offerings, entire loan portfolios.
Litigation Finance: We define litigation as a case which is or may soon proceed through the traditional court process, and not mediation, arbitration, or collaborative law. In this case, investors provide contingent capital related to a legal case based upon a projected settlement value. In return, investors receive a portion of any financial recovery in the case as a return on funds advanced.
Venture Debt: A form of corporate loan, this is a specialized type of debt financing taken out by private, often venture-backed companies to bridge the gap between fundraising rounds and exit opportunities. For the company, it allows minimal dilution of the cap table as well as a stopgap between future fundraising rounds. For investors, it provides exposure to said company with potential returns in sight (as opposed to VC investments, which have no specific end date).
Where to Start?
Which private credit asset classes fit your portfolio is based on your overall investment strategy. Investing in multiple private credit asset classes and their related offerings could lead to better overall asset diversification, broadening your exposure to the multi-trillion-dollar world of private credit. You can also invest in Percent Blended Notes, which give you instant access to diversification across all eligible asset classes currently on Percent.
Click below to sign up for Percent and start investing in private credit today.
Additional reporting and research conducted by Nolan Alexander