Financial Models

Assumptions and sensitivity drivers for a P2P Lending service 10-year financial model. The LaaS business is one of facilitation for borrowers and lenders to come together. In exchange for this connection, the LaaS platform will take a fee on interest earned, originations, and/or other fees.

The user starts off defining the start year and primary global assumptions. Of which, the first is sensitivity percentages for what define Low / Base / High in regards to the average Loans settled amount, count of loans settled, and average interest rate. The next set of global inputs are: % of gross interest and % of closing fees paid to the platform, % of defaults paid by the platform, and the average close fee rate. Next up is the exit assumptions if applicable and any debt funding. Getting into the assumptions around loan counts and interest rates, the user can define up to seven risk categories of loans, their average interest rate, average loan value, default rate, and the average count settled per month across 10 years. There are up to 4 term lengths that can be defined for each risk category and the user will define the % of loans that fall into each term length. The term lengths can be any number of months the user wishes. Operating costs are defined by start month and monthly amount per year. Startup costs and capex have their own input schedules. The final result is a 10 year monthly and annual detail that drives down to EBITDA and cash flow. A high level executive summary is also displayed as well as a DCF analysis, IRR, and plenty of visuals.