Loans less than $2,000,000 are known as ‘small’ loans in the industry. There is a steady and solid demand for these loans and Pendfund Income Fund I meets this demand.
Historically, small loans were funded by trust companies, Schedule B banks and certain life insurance companies. Due to mergers and closures, many of these lenders no longer exist and this has resulted in a decline of access to this type of loan. Most life insurance companies and banks prefer loans of over $3MM to $5MM due to economies of scale.
From a borrower’s standpoint, small loans obtained from larger institutions and banks can be conditional on the borrower’s agreement to the cross-selling of lines of credit, inventory financing, credit card services and cash-handling facilities. These conditions and other cross-collateral measures are often not appealing to borrowers. Pendfund Income Fund I offers streamlined loans and eliminates this problem for borrowers.
The mandate of Pendfund Income Fund I is to provide Investors fixed-income, a functional return and secured capital.
Pendfund Income Fund I invests in a low-risk asset class maintaining a minimum of 70% investment grade mortgage loans in its portfolio.