Pricing, Spreads, and Core Parameters
Pricing is policy-driven and lane-specific. Rates reflect cashflow volatility, enforceability strength, operational cost, and expected loss behavior.
1. Objectives
- price risk transparently,
- reward stable repayment behavior,
- tighten economics under stress,
- keep lane risk boxes distinct.
2. Core knobs per facility
- Borrowing base inputs Trailing fees, continuity, concentration, and volatility haircuts.
- Target repayment profile Principal plus fees over policy-defined service windows.
- Utilization discipline Mandatory paydown thresholds and windows.
- Control-mode multipliers Throttle/freeze/default behavior modifies availability and economics.
- Reserve settings DSRA/reserve requirements where policy applies.
3. Pump lane policy
Pump lane pricing reflects high-volatility cashflows and tighter control operations.
Typical characteristics:
- higher base rates,
- tighter caps,
- faster repricing when risk signals worsen,
- stricter step-up criteria.
4. Settlement lane policy
Settlement lane pricing reflects conservative underwriting and institutional reporting requirements.
Typical characteristics:
- lower volatility assumptions,
- tighter eligibility and concentration standards,
- slower but governance-bounded repricing,
- stronger covenant and reporting expectations.
5. Dynamic adjustments
Pricing and limits adjust based on observed behavior:
- consistent repayments can improve availability within policy,
- adverse signals tighten limits and can increase effective cost,
- unresolved stress transitions facilities into stricter control modes.
6. Governance cadence
Governance reviews and updates:
- parameter bands by lane,
- cap frameworks and concentration thresholds,
- reserve policy,
- disclosure and reporting standards.