Short Term Notes, like commercial paper issued by banks, rely on the assumption that the issuer (Yieldstreet) will be able to refinance at maturity. In this case, Yieldstreet would issue another Short Term Note, if needed.
Short Term Notes also carry the risk that an investment opportunity financed by Short Term Notes would default before it becomes fully subscribed. In such a scenario, Yieldstreet would work to recover the cash invested in the underlying investment. Like with other investment opportunities, some investments that are financed via Short Term Notes may have senior lenders who would receive first payment in case of default.
To help protect Short Term Note investors, Yieldstreet holds 5% of the notes issued in each series in a first loss position.
Further, the notes are backed by our history of more than $2.8B in investments on our platform. As of August 2022, we have launched 69 series of notes, with 48 series paid in full and the remaining currently still active and performing as expected.