What is a secondary market?
This is the place where you can list your investment for sale and other investors can purchase it from you. You don’t have to wait for your loan to be repaid, if you want an early exit from your investment you can place it on the secondary market for sale.
If someone buys your investment, you will receive back your outstanding principal immediately. You can also specify if you want to sell your investment at a discount/premium to sell it faster or to earn a higher return.
How to sell my investments on the secondary market?
To sell your investment log in to your account and go to My investments page. You will see that next to each of your active investments there is a button “Sell”. Press it and your investment will be added to your sales basket. You can also sell multiple investments at once by pressing the “Sell all” button.
Press the “Confirm” button in your basket and you’ll be forwarded to the next page where you can set a discount/premium for all or some of the loans you intend to sell.
What is a sale price?
The sale price is the amount of money which you will receive when your investment is sold in full. It is determined by the size of investment you wish to sell and the discount/premium you’ve set for the investment.
For instance, if you wish to sell € 20 at a premium of 10%, the sale price which you will receive is € 22. Alternatively, if you wish to sell € 20 at a discount of 10%, the sale price which you will receive is € 18.
What is a premium/discount?
When you choose to sell your investment on the secondary market you can do it at par, at discount or at premium. The premium/discount is expressed in percent of the outstanding value of the investment.
The premium allows you to sell you investment at a price that is higher than the outstanding value of your investment. For instance, if the outstanding value of your investment is € 20 and you sell it at a 10% premium, you will receive € 22 from the sale, making a € 2 profit.
The discount allows you to sell your investment at a price that is lower than the outstanding value of your investment. For instance, if the outstanding value of your investment is € 20 and you sell it at a 10% discount, you will receive € 18 from the sale, making it more attractive for other investors and exiting the investment more quickly.
How to change the premium/discount?
You can change the premium/discount from this page. You can either set an individual premium/discount for each investment separately or you can apply the same premium/discount to all investments at once by filling in the “Apply discount/premium to all loans” field and pressing the “Apply” button.
How to change the sale price?
You can change the sale price by adjusting the discount/premium at which you wish to sell your investment. You can set a discount as low as -15.0% or a premium as high as +15.0%.
What is your rounding methodology for SM transactions?
We round calculations to two decimal places. This applies to interest rate calculation as well as when calculating the premium/discount price on the loan that you buy or sell on
the secondary market.
For example, if you sell 4 EUR of your loan at a premium of 0.1%, the price which you
will receive for the loan will be equal to 4 * 100.1% or 4.004 EUR. The transaction will be
rounded to 4.00 EUR and you will receive 4.00 EUR as a purchase price. If, however,
you sell 5 EUR of your loan at a premium of 0.1%, the sale price of your loan will be
equal to 5.005 EUR. The transaction will be rounded to 5.01 EUR and you will receive a
1 cent premium on your loan.
In another example, suppose that you wish to buy a 25 EUR loan on the secondary
market at a discount of 0.1%. The price which you will have to pay for the loan is equal
to 25 * 99.9% or 24.9750 EUR. The transaction will be rounded to 24.98 EUR which is
what you will have to pay to acquire the loan on the secondary market.
Can I delete a loan from the sales list?
If you’ve changed your mind and you don’t want to sell a particular investment in your sales bucket, you can press the “x” button next to it. This will remove the investment from your list and it will not be listed on the secondary market. Alternatively, you can remove all investments by pressing the “Cancel and delete the list” button.
I’ve changed my mind, can I reverse the sale?
Once an investor has purchased your investment on the secondary market, the transaction is not reversible.
However, if you’ve changed your mind and you no longer wish to sell your investments you can take the unsold ones off of the secondary market. To do so go to the My investments page and click the “x” button next to the investments you no longer wish to sell.
What will I receive if my investment is sold?
When you sell an investment on the secondary market you will receive from the buyer the amount of the outstanding investment which was sold plus the premium which you have applied or minus the discount which you have applied. The funds will be available in your wallet immediately.
When will I receive my accrued interest?
When you sell your investment on the secondary market you may have an accrued interest or an accrued late interest - this is the interest, which is owed to you, but it is not yet paid by the borrower.
You will not receive this interest immediately. Instead, you will receive this interest once the borrower has made a payment.