We all want more business but sometimes it doesn’t come from marketing, it comes from better service to customers. In the business of lending, or investing in general for that matter, liquidity is a service that needs to be provided either through physical liquidity within your product or via a functioning market.
Liquidity is oxygen for a financial systemRuth Porate – CFO Alphabet Inc
Many lending platforms have not provided a liquidity engine in the form of a secondary market and because of that are missing out on:
More investment per user. Think about it, if your lenders have to get into loans one at a time in your primary market the deployment of capital can be slow. If you have a secondary market they can diversify immediately.
Better diversification from the off. We all know diversification is a key strategy for lenders. Some platforms solve this with auto-diversification, others in a ‘black-box’ environment but those providing self-select loans without a secondary market have a challenge on their hands.
Underwriter Programs. Successful underwriter programs (where one or more lenders invest in a loan upfront) rely on liquidity to provide turnover of the cash that is being used to underwrite. If you can offer an underwriter the facility to turn over their cash 5 or more times per annum then you have a great opportunity to write more business.
We work with platforms to maximise the benefits that are available from integrating the ASMX secondary market technology and work with you to make it efficient for your specific loan structure.