Here is a description:
What is private credit investing?
Private credit is an alternative asset class consisting of privately negotiated loans and debt financing from non-bank lenders.
Private companies, which don't have access to public markets, must turn to private credit markets to finance their operations and growth. Borrowers include small businesses, startups, and others.
Most private credit investments are secured by an asset such as a loan portfolio, a business, trade receivables, or assets with other cash flows or value associated.
These investments are largely uncorrelated with public stock and bond markets, and also offer higher yields and shorter durations than most debt investments.
Put simply, investing in private credit allows you to lend money to small and medium-sized businesses, usually with a relatively high interest rate.
Percent is a company that connects the lenders (you) and borrowers, and handles all of the legal details and complexities involved. More on that next.
What is Percent?
Percent (formerly known as Cadence) was founded in 2018.
It is an alternative investment platform that gives accredited investors access to private credit, a $7 trillion market.
The company connects underwriters, borrowers, and investors for transacting a variety of private credit investments.
Historically, private credit was reserved for institutional-level investors and hedge funds.
However, due to updated SEC regulations, Percent was able to pave the way for individual investors to fund short-term loans with high average interest rates and relatively low default rates, all with just $500 in minimum investment.
Thanks to Percent, yield-focused investors now have access to debt investments outside the highly competitive and increasingly volatile public bond market.
Key figures
All figures are as of November 30, 2023:
Amount invested: $936 million
Deals funded: 495
Average return: 13.17% annualized interest rate (APY) on matured deals
Average investment term: 9 months
Default rate: 1.75%
Minimum investment: $500
Investor fees: Varies, ~2%
Retention: 89% of Percent customers choose to invest again after their first deal
Welcome bonus: Up to $500