Eligibility and terms

Start with eligible holdings.

The initial program would serve taxable investors in sponsor-approved funds. Retirement accounts, including IRAs, are outside the initial scope. Approval would depend on fund documents, transfer and pledge restrictions, valuation quality, unfunded commitments, concentration, borrower suitability, and lender underwriting.

The program would require fund consent and administrator acknowledgment where applicable. Reported NAV is a starting point, not a guarantee of collateral value or sale proceeds.

Indicative pricing and fees.

All figures below are illustrative and subject to diligence, legal review, and funding agreements.

Initial LTV

Approximately 20–30% of eligible NAV, subject to a haircut-adjusted borrowing base

Loan size

$250,000–$2 million

Interest

SOFR + 6–9 percentage points; floating rate

Origination fee

1% of principal at funding

Annual servicing fee

1% of outstanding principal

Term

24 months; no assured extension

A cost example

At a hypothetical 4% SOFR and a 6-point margin, a $250,000 balance held constant for one year would incur $25,000 interest, a $2,500 origination fee, and $2,500 servicing fee: $30,000 in first-year costs, before other applicable expenses. Principal remains due separately. This is not a current rate quote or a regulatory APR calculation.

There is no established investor APY. A borrower’s coupon is not a capital provider’s net return: funding costs, losses, reserves, fees, and timing all matter.

References: New York Fed: SOFR · CFPB: interest rate and APR

Collateral controls throughout the loan.

Loans would be secured by eligible fund interests and associated distribution rights, subject to enforceability and consent. Agreed administrator instructions and controlled accounts would direct distributions through a contractual repayment waterfall.

A $1 million qualifying NAV, adjusted by a 15% valuation haircut and a 30% advance rate, produces a $255,000 borrowing base. A $250,000 loan fits within that base. If NAV falls 20%, the base becomes $204,000, creating a $46,000 shortfall.

A shortfall would suspend further draws and trigger a contractual cure process: cash repayment, additional approved collateral, or other lender-approved action. Cure periods and thresholds remain to be negotiated. Uncured defaults may lead to enforcement and sponsor-permitted transfers or sales. Private fund interests may take substantial time to sell, and recovery may be below the loan balance.

Capital supplied by funding partners.

The proposed structure uses a bankruptcy-remote special-purpose vehicle to hold loans, with third-party warehouse financing or forward-flow purchases. Legal isolation depends on the final structure and documents; it is not a guarantee against losses.

LOADLINE would earn agreed origination and servicing fees, with potential participation in excess spread where negotiated. The funding agreements must specify who pays funding costs, supplies first-loss capital and reserves, provides guarantees, and retains credit risk. Funding partners and economics are not yet committed.

LOADLINE aims to help multiple lenders finance approved holdings using consistent permissions, fund data, collateral monitoring, and servicing. Banks can participate as capital providers. Any future tokenized funding would sit behind the customer experience and require separate diligence.

What must be resolved before launch.

The program requires counsel and funding partners to validate lending and servicing licenses, securities and investment-adviser rules, borrower disclosures, privacy, KYC/AML and sanctions processes, lien perfection, fund consent, distribution control, insolvency treatment, and tax considerations.

Core credit risks include stale or overstated NAV, concentrated collateral, fund-level debt, capital calls, delayed distributions, transfer restrictions, and an absence of buyers during stress. Conservative advance rates reduce exposure but do not eliminate these risks.

See Mayer Brown’s discussion of sponsor-arranged investor loan programs. Final eligibility, disclosures, and agreements would be determined before any lending begins.