Note terms
Guardrails, the payment formula, fees, buyout and consumer mode.
Guardrails
The factory refuses any series outside these limits, which are constants in the code.
| Guardrail | Limit |
|---|---|
| Share of income | 5-20% |
| Payment cap | 1.5-3x the amount raised |
| Term | 3-10 years |
| Total share per person, across all notes | At most 25% |
| Hardship pauses | At most 8 periods |
| Dispute window | 7-30 days |
| Tail after the term | At least one period, at most 2 years |
The planned pilot is stricter: share up to 10%, cap up to 2x, term up to 5 years.
The payment formula
Payment =
share x max(0, income - hurdle)
Income is defined broadly, including salary, dividends, the beneficiary's share of profit in their own company, payments to related parties for their work, and income earned in the term but received later.
Quarterly payments are provisional; the yearly true-up decides. An overpayment is credited against later payments, not refunded by holders. A missing report is deemed at the trailing twelve-month level and recorded as arrears.
Fees
| Fee | Pilot range | Charged on |
|---|---|---|
| Upfront | 2-3% | The raise, at closing |
| Servicing | 3-5% | Each payment, at release |
| Success | 5-10% | Payments above 1x principal |
The engine caps them at 3%, 5% and 10%. Success fees follow cumulative released payments, so release order does not change them.
Buyout
The issuer can end a note early, never paying more than the cap allows. Outside consumer mode the price is the larger of the unpaid floor (1-1.3x principal, less payments so far) and the servicer's forecast of what the note would still collect; in consumer mode, the early repayment amount below. A buyout waits until no payment is inside its dispute window, so its price counts confirmed payments only.
Consumer mode
Series whose money may fund personal runway run in consumer mode, with consumer credit protections:
- APR ceiling. At the maximum APR, the present value of all payments never exceeds the principal. Two exceptions sit above it: the early repayment fee, and a buyout before the first period ends, which is priced as if that period had passed. Default 10%, the Swiss consumer credit ceiling and the strictest reference; at most 30%, set per series for the beneficiary's country.
- Withdrawal. Within a window of 14 to 30 days after the raise closes, and before any payment, the beneficiary can withdraw by returning the principal; holders are repaid at par.
- Early repayment. Principal plus interest within the APR ceiling, net of payments so far, plus at most 1%.
Beneficiaries from countries where this is not enough are not accepted.
Try the numbers in the playground.
Updated