Yes. These investments seek to provide high-yield returns in the specialty-lending market which inherently brings greater risk than other debt and equity investments. The comparatively higher risks presented by these investments are set forth in detail in the offering documents listed on each offering’s page, with many bearing on the ability of a given Borrower to pay back the loan according to its terms. Yieldstreet seeks to minimize that risk, for example, with collateral-backed financings and sometimes personal guarantees, as described in the offering documents prepared for each investment.
It is important for investors to know that the Yieldstreet team puts each and every offering through a vetting (or pre-offering evaluation) process to help mitigate risk. Due diligence, however, cannot eliminate risk entirely. As a common example, there is always a risk that a Borrower simply fails to repay amounts due or otherwise comply with their obligations. Yieldstreet and its Originators also evaluate risk mitigators that may reduce (but of course, never eliminate) potential downside. Examples of such potential mitigators include insurance, personal guarantees, and the added assurance of legal opinions regarding the underlying business and status of the collateral.