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Three layers of protection.
No other P2P platform does this.
Income Marketplace is the only P2P investment platform with a Cashflow Buffer, an exclusive mechanism that is designed to protect your investment even if a loan originator goes bankrupt.
THE SECURITY FRAMEWORK
Two risks. Three protections.
Investors on P2P platforms face two distinct risks: borrower default and loan originator default. Most P2P platforms stop at one layer of protection. When it comes to P2P investment security, Income is the only platform that addresses both major investor risks with dedicated mechanisms.
Buyback Obligation
If a borrower falls more than 60 days behind on repayments, the loan originator is contractually required to buy the loan back from you, returning your full principal and accrued interest. This addresses borrower default risk.
Cashflow Buffer
An exclusive Income Marketplace mechanism. If a loan originator itself defaults or goes bankrupt, the Cashflow Buffer activates, designed to ensure investors are repaid first from recovered funds before the originator receives anything. This addresses LO default risk.
Junior Share
Each originator holds a portion of every loan (the Junior Share) that is subordinated to investor claims. In a default scenario, this share absorbs losses first, meaning investors are structurally first in the repayment queue, not just by promise.
PLATFORM COMPARISON
How Income Marketplace compares on P2P investment security
Most P2P platforms stop at one layer of protection. Income is the only platform that addresses both major investor risks with dedicated mechanisms.
| Security feature | Income Marketplace | Typical P2P platform |
|---|---|---|
| Buyback Obligation (60-day) | Yes, on all loans | Common |
| Protection against LO default | Yes, via Cashflow Buffer | Not on most platforms |
| Cashflow Buffer (structural) | Exclusive to Income | Not available |
| Junior Share (investors repaid first) | Contractually subordinated | "Skin in the game" only (equal loss) |
| Independent financial due diligence per LO | Rigorous, sets buffer level | Varies by platform |
| Bank proof required for LO loan data | Required ("Sanity Check") | Rarely required |
Borrower misses payment
Days 1–60: Late payment process
Day 60+: Overdue threshold reached
Buyback Obligation activates
Loan originator must repurchase loan
You receive principal + interest
Regardless of borrower recovery
Layer 1 — Standard on all loans
What is Buyback Obligation?
The Buyback Obligation is a contractual obligation that comes with every loan on Income Marketplace. If a borrower fails to repay for more than 60 days, the loan originator is contractually required to repurchase that loan from you.
When the buyback triggers, you receive your full invested principal plus all interest accrued up to that point, regardless of whether the originator has successfully recovered funds from the borrower themselves.
This protects you against Risk A: individual borrower default. You don't need to track late loans or chase recoveries. The originator absorbs that risk.
Most modern P2P platforms offer a buyback guarantee as standard. Where Income Marketplace goes further is in the additional two layers that protect against the more serious risk: the originator itself defaulting.
Layer 2 — Exclusive to Income Marketplace
What is the Cashflow Buffer?
Loan originator default (Risk b) is not covered on most platforms by any additional security measures. This means that if an originator cannot honour its buyback promise or goes bankrupt, investors have no buffer designed to ensure they get their money back.
Income Marketplace is the only platform with a Cashflow Buffer to protect investors against this risk.
The Cashflow Buffer is not a separate pot of money. It's a structural calculation, the combination of loan portfolio profitability, risk adjustments, and the Junior Share held by the originator.
If an originator defaults and Income takes over its portfolio, all profit from that portfolio, together with the originator’s Junior Share, is directed exclusively to repaying investor principal and interest first. Only after investors are fully repaid are any remaining funds transferred to the originator.
Investor share (e.g. 90%)
Regardless of borrower recovery
Paid out first
Loan originator (Junior Share)
Only paid after investors are whole
Cashflow Buffer =
Loan profitability + Risk adjustments + Junior Share
If originator defaults
Income takes over the portfolio. 100% of profit and Junior Share is directed to repay investors first.
Investor share: 90%
10% LO
Skin in the Game (other platforms)
10% held by LO, equal likelihood of loss. In default, both 10% and 90% share losses proportionally.
Junior Share (Income)
10% is junior to investor’s 90%. In default, the 90% is repaid first. The 10% absorbs losses.
Key distinction
Junior Share = alignment and security.
Skin in the game = alignment only.
Layer 3 — Alignment and Security
What is the Junior Share?
Many P2P platforms use “skin in the game”, where a loan originator holds a percentage of each loan alongside investors. This aligns incentives, but in a default scenario, both the originator’s share and the investor’s share have equal likelihood of loss.
Income Marketplace uses the Junior Share instead. The name comes from debt finance: junior debt has lower priority for repayment than senior debt claims. In a default, junior holders are only paid after senior holders are fully repaid.
In P2P terms: the originator's Junior Share is subordinated to investors. If a loan originator defaults, the investor's share is repaid first. The originator's Junior Share absorbs the majority of losses.
Importantly, the Junior Share is not a fixed indicator of risk level. Income Marketplace sets it after thorough financial analysis. If loan quality is high enough, the Junior Share can be 0% and investors are still structurally prioritised in repayment.
Real Worked Example
What actually happens in a loan originator default?
Using Income Marketplace’s own published example: 1,000 loans, an originator defaults. Here’s exactly how the Cashflow Buffer aims to protect you.
1,000
Total loans originated by the LO
800
Loans performing normally
200
Loans not performing (20%)
0
Investor losses in this scenario
Originator defaults. Income takes over.
Income Marketplace invokes its existing agreements with local collection companies and takes over the entire 1,000-loan portfolio on behalf of investors.
Portfolio secured
800 performing loans continue performing themselves
The 800 loans where borrowers are repaying on time continue as normal and those borrower repayments flow directly to investors on schedule.
800 loans performing
Junior Share + excess earnings address the 200.
The 200 non-performing loans are covered using the Cashflow Buffer: the originator’s Junior Share plus excess earnings from all 1,000 loans are directed to repay these on the original schedule.
200 loans covered
Designed so everyone gets their investment back in a simple and fair way.
This is how the Cashflow Buffer works in practice. The key insight: you don't need 100% of loans to perform. The buffer is designed to cover a realistic level of non-performance. Income Marketplace calculates the required Junior Share level so that full investor repayment is is the target even in stressed scenarios, before the originator is approved to list loans.
BEFORE ANY ORIGINATOR IS LISTED
How we set the Cashflow Buffer
The security of the Cashflow Buffer is only as strong as the due diligence behind it. Here’s what happens before a loan originator is approved to list on Income Marketplace.
1
Kick-off call with management
Income’s team discusses the originator’s product and goes through the two most critical lending processes: underwriting and collection methodology.
2
KYC & AML screening
Each loan originator and its shareholders undergo full Know Your Customer and Anti-Money Laundering due diligence, including sanctions screening, PEP checks, and ultimate beneficial owner verification. We maintain this standard to stay on par with both current and anticipated regulatory requirements.
3
Multidimensional loan book analysis
A deep analysis of the historical loan book, focusing on the “historical repayment coefficient”, which measures how much cash the portfolio actually generates. Multiple rounds of follow-up questions typically follow.
4
Financial statements review (2+ years)
Full financial analysis with particular focus on liquidity and solvency ratios, identifying any signs of inflated assets, poor equity, or insolvency risk.
5
Sanity & Completeness Check
The originator must provide bank proof for all money disbursed and received, verifying that the loan book data is actual and reliable, not fabricated.
6
Junior Share is set
Based on the Repayment Coefficient × all identified risks. The Junior Share level is unique to each originator and is set so that full investor repayment is the target even in stressed scenarios.
RED FLAGS THAT DISQUALIFY AN ORIGINATOR
- Low Repayment Coefficient: the loan portfolio isn't generating enough cash to support operations
- Sanctions exposure, PEP risk, or unverifiable ultimate beneficial owners among the originator's shareholders
- Inflated assets and poor equity position, which can indicate a potential insolvency issue
- Inadequately designed or manual processes that could produce data errors
- Insufficient data quality of the loan book
- Inability to provide bank proof for collected money
- Product features that conflict with local legislation (e.g. interest rates exceeding legal caps)
From our Due Diligence team
Income Marketplace Financial Analysis
How do you determine that an LO has "good loans"?
Generally speaking, the LO is required to have at least a sufficient Repayment Coefficient to provide our investors with the promised interest on invested money.
How many LOs have been declined to date?
Our due diligence team declined only one at the final stage, due to insufficient repayment coefficient and an improper banking reconciliation system, and a couple of others at earlier stages. The bar is high by design.
Is the Junior Share the same for all originators?
No. The process of setting the Junior Share is unique to each LO as we need to consider market-specific and originator-specific issues. If loan quality is strong enough, the Junior Share can be 0% and investors are still structurally prioritised in repayment.
COMMON QUESTIONS
Frequently asked questions
Everything investors ask about P2P investment security at Income Marketplace.
What's the difference between Junior Share and "skin in the game"?
"Skin in the game" means the originator holds a share of the loan alongside you, but in a default scenario, both their share and yours have an equal likelihood of loss. The Junior Share is fundamentally different: it is subordinated to your share. In a default, your portion is repaid first from any recovered funds, and the originator's Junior Share absorbs the losses. It's the difference between equal partnership in loss and structural protection for investors.
Is the Cashflow Buffer the same as a buyback guarantee?
No, they protect against different risks. The Buyback Obligation addresses individual borrower default: if a borrower stops paying, the originator buys the loan back from you. The Cashflow Buffer addresses originator default: if the originator itself goes bankrupt, the buffer is designed to ensure investors are still repaid first from the collected loan portfolio. Most platforms only offer a buyback guarantee. The Cashflow Buffer is exclusive to Income Marketplace.
What happens to my money if a loan originator goes bankrupt?
Income Marketplace takes over the loan portfolio and begins collection on your behalf using existing agreements with local collection companies. All proceeds, including profit from performing loans and the originator's Junior Share, are directed to repay your principal and interest first. Only after investors are fully repaid can any remaining funds be returned to the originator. This is the Cashflow Buffer in action.
Can the Junior Share be 0%? Does that mean I'm unprotected?
A 0% Junior Share doesn't mean you're unprotected. It means the quality of the underlying loans is assessed as sufficiently strong that the Cashflow Buffer is adequate without an additional Junior Share. The security comes from the loan portfolio's own repayment capacity. Income Marketplace only sets a 0% Junior Share after confirming that the portfolio's cash generation is strong enough to fully repay investors in a default scenario.
How does Income Marketplace decide how large the Junior Share needs to be?
It's calculated as the product of the originator's Repayment Coefficient (how much cash the loan portfolio generates) and all risks identified during due diligence, such as currency risk, market conditions, and potential crises. The process is unique to each originator. The goal is to set it at a level where full repayment of investor funds is the target, even in stressed scenarios.
Can I still lose money on Income Marketplace?
All investments carry risk and past performance does not guarantee future returns. While the three-layer security framework significantly reduces the likelihood of investor losses, a scenario where both the buyback mechanism fails and the Cashflow Buffer is fully exhausted could still result in losses. Income Marketplace mitigates this through rigorous originator selection and ongoing monitoring. We always recommend diversifying across multiple originators and loan types.
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