Raising Capital through Goldfinch

Raising capital through the Goldfinch ecosystem can be summarized in four basic steps, which you can learn about in more detail in the Protocol Mechanics sections of the documentation.

Step 1: A Borrower proposes a Borrower Pool to the Goldfinch community, sharing deal terms, structure, and due diligence materials with the Backers. Borrower Pools are specific to individual Borrowers, representing the credit lines from which Borrowers draw capital to funds their real-world lending. Each pool is created by the Borrower encoded with a set of deal terms (including pool size, interest rates, repayment schedule etc.) that match the loan that Borrower Pool represents.

Step 2: The Backers then perform due diligence on the Pool opportunity. This diligence is based on the information shared, directly communicating with the Borrower, and negotiating key terms of the transaction. Backers then supply capital once a transaction agreement has been signed by both the Backers and the Borrower.

Step 3: The Senior Pool automatically allocates its capital to fill deal tickets. Senior Pool capital contribution to the deal based on the Leverage Ratio calculation, which follows the actions of Backers—to date leverage is set at 3x and in future will be determined automatically by the protocol.

Step 4: The borrower draws the USDC raised from the protocol as a unitranche facility.

These four steps typically take a week to complete.