Initially while browsing the PertuityDirect.com and the related NationalRetailFund.com site I was a bit puzzled where the peer to peer lending aspect is to be found? I learned:
- Lenders buy shares
- Borrowers credit information details are never shared. Only Pertuity Direct knows them
- There is no auction
- Interest rates are set by Pertuity Direct
Then I read the National Retail Fund II prospectus and learned that the Fund is allowed to do other investments then funding loans of Pertuity Direct borrowers. It may:
- buy T-Bills, money market funds and other cash equivalents
- buy bundled consumer note securities, even if part of them is deliquent
The NationalRetailFund website explains:
How is this related to Pertuity Direct?
Pertuity Direct is a separate entity and is one of the fund’s service providers and acts in an administrative role. They underwrite and originate borrower loans. Those loans are an investment option for this fund.
On the same FAQ page I then found what this all has to do with p2p lending:
Where is the ‘Social’ aspect in all of this?
If you choose, you have the option to engage in the social lending network associated with the borrowers within the funds. By selecting the option, you will be able to see the various borrowers in the funds, get to read their stories and track their progress over time. You will also have the ability to engage directly with any borrower or group of borrowers that you find compelling and help them accomplish their goals with a rewards program.
Lenders can use so called Pertuity Bucks, which they receive free upon sign up, to reward borrowers whose stories they find compelling. The balance of the borrower is reduced by the amount of Pertuity Bucks the borrower receives.
My review summary of the p2p lending aspect of Pertuity Direct
While it may be a smart construct in respect to overcoming regulation hurdles it offers much less direct peer to peer interaction between lender and borrower.
- Pertuity Direct decides which loans get approved
- Pertuity Direct sets the interest rates
- The fund decides on the investment strategy in detail
- Interaction takes place only through the Pertuity Bucks community feature
But let’s see how the concept develops and what borrowers and lenders think about it.
What is your take on this, dear reader?