The 4th Way system is based off of “rigorous stress tests carried out on all the platforms using international banking standards – Basel (1)”. Their ratings seek to indicate whether investors could expect to lose money during a very severe recession. As a risk-adjusted rating, they also take into account interest earned, so they show investors how long it might take to recover from those losses – after both interest and any protections offered by the online lending platforms, such as reserve funds set aside to pay for expected bad debts.
Proplend is pleased to have been awarded a 5 out of 5 PLUS rating, the maximum rating possible and one of the lowest Risk Scores of 3, meaning that losses before interest are modelled at under 2.5%, which is easily recovered by the interest earned.
Brian Bartaby, Founder and CEO of Proplend commented:
“With so may different platforms offering secured, unsecured, consumer, SME and property loans it can be very confusing for investors to fully understand just what level of risk they are actually taking. 4th way has recognised this and sought to offer investor clarity on a like for like basis, this is an important benchmark for the industry.”