Secured Line of Credit

A revolving credit facility secured by onchain cash flows and/or asset collateral.

The Secured Line of Credit is a revolving credit facility secured by onchain cash flows and/or asset collateral.

A single facility (a "Line of Credit", "Line", or "LoC") belongs to a single Borrower and can contain any number of individual Credit Lines (also called Credit Positions) from any number of Lenders, in any ERC-20 token, each at individually agreed interest rates and deadlines. Every Credit Position is represented onchain as an ERC-721 token.

Benefits for Borrowers

• Flexible, non-dilutive financing for OpEx and growth with no fixed repayment schedule

• On-demand liquidity — draw only what you need, when you need it

• Leverage future cash flows and revenue as security via the Spigot

• Syndication-ready — one facility can hold positions from many lenders, in multiple assets, on individual terms and deadlines

• Early Withdrawal Fees compensate the Borrower if a Lender withdraws committed capital before term

Benefits for Lenders

• Price borrower risk individually — every position has its own drawn rate, facility rate, and deadline

• Earn on committed capital even before it is drawn (the facility rate)

• Withdraw undrawn capital on demand (subject to any agreed Early Withdrawal Fee)

• Security from the Borrower's cash flows via the Spigot and/or from escrowed asset collateral

• Programmatically enforced recourse and a FIFO repayment queue

• Positions are ERC-721 tokens: transferable (where permitted), auditable, and usable as building blocks for vaults and secondary markets

Not sure what a revolving Line of Credit is? For a TradFi primer, see Investopedia.