How it works

Through Kasu, you lend to the Lending Strategy of the Credit Originator you choose, under a Loan Agreement generated for you when you complete the lending request process. The Credit Originator originates loans to End Borrowers: the businesses. It assesses them, takes security over them, collects repayments and pursues recovery in the case of loan defaults.

Your interest, and the return of your capital when you request it, depend on those businesses repaying their loans. While the loan agreement between the Credit Originator and an End Borrower may include a repayment schedule, the facility is structured as a revolving facility, which means it can be drawn up and down as required, similar to an overdraft or line of credit. There is therefore no defined or structured repayment schedule for the return of your loan to you. Instead, capital comes back through a Withdrawal Request if you entered into a variable-rate loan, from the funds available at each cycle close (Submitting a Withdrawal Request), or at the expiry of your fixed-rate loan, subject to the required notice period (Fixed Rate Loans).

You do not have a claim against the End Borrowers, and the security over them is held by the Credit Originator, not by you. What protects your position is that security, the controls built into how each loan operates, and the covenants the borrowers must meet. These are published per strategy (The Lending Strategies) and explained on the Security and Recourse page.