You free up $1M and earn more on what remains.
How to read this
Your total profit falls, because you are paying for capital that used to be your own. Your return on the money you actually have tied up rises, because you have $1M less tied up. That freed $1M is the entire point. It is either deployed into more lending or it stops being a constraint on growth.The 4% loss rate in this example is PRISM’s expected loss rate. It has never been
measured and is a placeholder. Substitute your own realised loss rate — the
comparison is only as good as that number. See Disclosures.
What is not in this table
- PRISM’s fees. Structuring and servicing fees are stated as ranges because they have not been tested against a real originator. See what PRISM earns.
- Your cost of equity. The table shows the return on your own money, not what that money would have earned elsewhere.
- Setup time. A pool takes weeks to fund.