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Default loan process: what you should know

March 17, 2020 • 2 min read

At Yieldstreet, we work in tandem with our origination partners to follow a set of protocols when it comes to the maintenance, servicing, risk management, and reporting of our portfolio. Yieldstreet investments have largely performed in-line with initial expectations. However, investors need to understand that they must manage their investment performance expectations and consider the risk of defaults to make an informed decision when investing with us.

The various stakeholders and moving parts involved in Yieldstreet offerings, coupled with the unique structure of each offering, can lead to a lengthy process where investors may receive limited information for periods of time. During such times, we always operate with our investor-first mindset to establish an appropriate plan of action. As these situations can vary tremendously in terms of complexity, it takes time to properly assess all options and determine the appropriate solutions. We aim to ensure that we are maximizing recovery and returns in as timely a manner as possible.

It’s important for investors to remember that every offering, borrower, and default is different. This is why each loan recovery approach, like the kind Yieldstreet employed to achieve 100% recovery of investor principal and outstanding interest following a default in 2020, is tailored to each offering’s specific facts and circumstances.

Learn more about Yieldstreet’s effective work-out strategies through two separate case studies of borrowers that defaulted due to COVID-19.

Below is a visual representation of the process we follow during an offering’s life cycle. It outlines the various workout strategies that are considered during a default scenario. While this is a complex process, we hope it sheds some light on both the complexity and timeframe of the decision process.

This communication and the information contained in this article is provided for general informational purposes only and should neither be construed as nor is it intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice.

Please reach out to [email protected] with any questions.

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