Lonvest Early Exit: A Smarter Alternative to the Secondary Market

One of the questions we occasionally receive from investors is: Does Lonvest plan to launch a Secondary Market?

At this stage, we do not consider a traditional Secondary Market necessary, because Lonvest already offers a simpler and more predictable mechanism for exiting an investment early.

How a Secondary Market usually works

On many P2P platforms, a Secondary Market is a marketplace where investors can offer their existing investments for sale to other investors. However, the ability to list an investment for sale does not necessarily mean immediate or guaranteed liquidity. To exit faster, investors may sometimes need to sell their investment at a discount. The transaction also depends on whether another investor is willing to purchase it.

As a result, investors may potentially face:

• waiting for a buyer;

• having to offer a discount;

• losing part of the originally invested principal;

• additional selling fees, depending on the platform.

In other words, a Secondary Market can provide liquidity, but the actual exit conditions may depend on demand from other investors.

How it works at Lonvest

We chose a different approach.

At Lonvest, you do not need to find another investor to buy your investment.

If you need to exit an investment before maturity, you can terminate it early.

In this case, the full principal amount is returned to your Lonvest balance. The investor only gives up the accrued interest on that particular investment.

For example, if you invest €10,000 into a long-term investment but later decide that you need access to those funds, you do not need to list the investment for sale, wait for another investor, or accept a discount.

After the early exit, the full €10,000 is returned to your Lonvest balance, while the accrued interest on that investment is forfeited.

Why we believe this approach is more convenient

For us, liquidity is primarily about giving investors access to their capital when they need it.

The Lonvest early-exit mechanism offers several important advantages.

1. Predictability. You know in advance what an early exit will cost: the accrued interest, rather than part of your principal.
2. No dependency on other investors. You do not need to wait for someone else to buy your investment.
3. No discount on principal. You do not need to reduce the value of your investment in order to exit faster.
4. More flexibility with longer terms. Investors can choose longer-term investment products while still retaining the option to access their capital early if necessary.

Liquidity and investor protection are different things

We also believe it is important to separate two different concepts.

Early exit is a liquidity tool. It applies when an investor chooses to terminate an investment before maturity.

Buyback Guarantee and Group Guarantee are investment protection mechanisms.

Lonvest offers a 90-day Buyback Guarantee: if a borrower is more than 90 days overdue, the Loan Originator repurchases the respective investment in accordance with the applicable guarantee terms.

Investments are also supported by a Group Guarantee, providing an additional layer of protection in relation to the obligations of the Loan Originator.

In other words, we do not try to solve every investor need with a single feature.

For liquidity, Lonvest provides an early-exit mechanism.
For additional investment protection, Lonvest provides a 90-day Buyback Guarantee and Group Guarantee.

So, is a Secondary Market really necessary?

We see a Secondary Market as one possible way to provide liquidity, but not as an essential feature of a P2P investment platform.

What matters to investors is not the existence of a Secondary Market itself, but the ability to access their capital in a clear and predictable way.

That is why we chose a more direct solution: investors do not need to sell their investment to another market participant, wait for a buyer, or potentially accept a discount.

You can exit an investment early, preserve the full principal amount, and have it returned to your Lonvest balance.

Combined with the 90-day Buyback Guarantee and Group Guarantee, this allows us to address different investor needs separately: flexibility for liquidity management, and guarantees for additional investment protection.

We believe this approach is simpler, more transparent, and more convenient for investors.