Percent Review 2024

What is Percent?

Percent is an innovative alternative investment platform that specializes in providing access to private credit opportunities. Historically, private credit was a domain reserved for institutional investors, but Percent breaks down this barrier. They offer individual accredited investors the chance to invest in areas like SMB loans, merchant cash advances, and trade receivables.

With an entry-level investment starting at just $500, Percent aims to diversify the investment horizon beyond the usual realm of stocks, bonds, or mutual funds. Boasting a transparent operating model and a commitment to exemplary customer service, Percent positions itself as a trusted avenue for those seeking alternative investment routes in the ever-evolving financial landscape.

Learn More About Percent

Percent Company Background

Founded in 2018, Percent, formerly known as Cadence, entered the alternative investment platform space with a focus on private credit investments, including merchant cash advances, corporate loans, consumer loans, and even venture debt for high-growth companies.

Recognizing the high barrier to entry in the private credit space, Percent sought to lower that threshold, making these opportunities available to a broader audience.

The platform connects accredited investors with businesses seeking short-term, high-yield debt financing. These businesses offer cash-generating assets as collateral, such as residential mortgages, merchant cash advances, and corporate loans.

By doing so, Percent offers investors a level of security I typically don’t see with alternative investments.

Percent’s transparent approach and dedication to customer service have garnered a solid track record, further cementing its place in the industry. It has successfully funded hundreds of outstanding deals, proving the viability and attractiveness of its platform.

External Percent Reviews & Ratings

Firsthand User Experience with Percent

Although there aren’t as many Percent reviews online as some of their rivals, here is a review I was able to find, from a trader who has experienced the platform firsthand:

If you want to see more customer’s Percent ratings you can check out Percent Reddit reviews. The Percent reviews on Reddit are overall positive. Both positive and negative reviews on Reddit have highlighted some investments with Percent . Here is a lost significant value. A very telling thread I was able to find reading through the Reddit reviews of Percent:

What are the Key Features?

Investment Diversity

Percent offers a variety of private credit investment options, including asset-based notes, trade receivables, consumer loans, SMB loans, SMB leases, and SMB cash advances. This diversity provides investors with multiple avenues to explore within the private credit sector.

Low Minimum Investment

With investment thresholds as low as $500 for many deals, Percent makes private credit investing accessible to a broader range of accredited investors, allowing for more personalized investment strategies and portfolio diversification.

Transparent Investment Details

Each investment opportunity on Percent is accompanied by detailed information, such as expected returns, collateral type, and borrower track records, promoting informed decision-making among investors.

Rigorous Due Diligence

Percent’s stringent vetting process for each deal and originator ensures only quality investment opportunities are presented, bolstering investor confidence and trust in the platform.

Blended Notes for Diversification

Percent’s Blended Notes provide a mixed investment portfolio within a single investment, offering exposure to multiple deals on the platform. This strategy is designed to mitigate risk by diversifying across various assets.

Venture Debt Opportunities

The platform allows investments in venture debt for high-growth companies, providing an option for investors seeking to balance their portfolios with potentially higher-yield but higher-risk investments.

Security and Privacy

• Robust Data Protection: Percent employs bank-level encryption technology to safeguard user data, ensuring a high level of security and privacy for investor information.
• Regulatory Compliance: Adherence to financial regulations and SEC guidelines enhances the platform’s credibility and ensures legal compliance in all transactions.
• FDIC Insured Accounts: Investment funds are held in FDIC-insured accounts up to the legal limit, providing an additional layer of security for investors.

Percent Investment Offering Types

Asset-Based Notes

These notes are secured loans backed by collateral. They include consumer loans backed by items like vehicles or jewelry, trade receivables based on invoice amounts, and SMB leases allowing businesses to use assets like property or equipment. If borrowers default, the pledged assets can be seized by the lender.

Trade Receivables

These involve purchasing a business’s accounts receivables at a discounted rate, which yields a return upon maturity.

Consumer Loans

Investments in installment loans, vehicle loans, and short-term unsecured loans. These loans are often backed by collateral such as homes or vehicles.

SMB Loans

Short-term secured and unsecured loans aimed at small-and-medium-sized business activities. Some might have personal guarantees from the business owners.

SMB Leases

Investment in leases provided to small businesses for property, equipment, or other assets. These investments are backed by assets.

SMB Cash Advances

Investments based on future receipts of a business. It’s distinct from invoice factoring as repayments are determined by future sales.

Blended Notes

Blended Notes provide a diversified investment approach. These notes are created by combining multiple assets into a single investment. This process is managed by Percent’s investment team. Investors receive monthly interest for the first year, followed by combined interest and principal payments.

Within a single investment, you gain exposure to multiple deals on the Percent platform. There’s a minimum investment of $5,000 (though some might require more), and a 1% management fee applies.

Corporate Loans and Venture Investing: Percent enables investments in fast-growing companies that need interim funding. These loans are generally repaid when the company secures its next round of equity financing. They offer high yields, but they typically require a higher minimum investment.

This program lets investors provide loans to early-stage or rapidly growing companies. These loans come with specific terms, allowing lenders to claim a part of the borrower’s assets or equity if repayments aren’t made. The amount lent to these companies is usually under $5 million, and they offer higher interest rates due to their associated risk.

Reviewing Percent Pricing

• No Management Fees on Single Notes: Percent offers a fee-free investment experience for single note offerings, making it a cost-effective option for private credit investors.
• Blended Notes Fees: Investors in Percent’s Blended Notes programs are subject to a 1% management fee, in addition to a percentage of the yield, offering a balanced cost structure for diversified investment options.

Who is Percent Best for?

Accredited Investors

Accredited investors can access the full range of investments on Percent. With minimum investments often as low as $500, Percent is a compelling option for investors looking to diversify their portfolios with private credit as an alternative investment.

The Competitive Edge of Percent

Percent sets itself apart in the alternative investment space through a combination of unique features. Here are the features that resonate the most with me:

• The only platform exclusive to private credit: Percent offers only private credit investment opportunities and is the only alternative investment platform exclusive to private credit.
• Low Minimum Investment: Percent’s low minimum investment makes it accessible to a wide range of accredited investors, a rarity in the private credit space.
• Wide Range of Opportunities: The platform offers a diverse range of private credit investment opportunities, including merchant cash advances, corporate loans, consumer loans, and venture debt.
• Transparent Fees: Percent clearly states any fees associated with each investment, providing investors with a comprehensive understanding of the potential return. opportunities.
• Strong Customer Service: The platform’s customer service team is highly responsive, providing personalized assistance and guidance to investors.

Is Percent Legit?

Yes, Percent is a legitimate platform for investing in private credit. Since its launch, the platform has successfully facilitated investments in a wide range of private credit asset classes, such as SMB financing, merchant cash advances and corporate debt.

Several factors confirm the legitimacy of Percent:

• Regulatory Compliance: Percent operates in compliance with all applicable financial regulations, including SEC’s Regulation D, Rule 506(c), ensuring its operations meet industry standards and legal requirements.
• Transparency: The platform provides comprehensive information about each investment opportunity and corporate borrower, including past deal performance if a repeat borrower and current deal performance.
• Strong Track Record: Since its inception, Percent has successfully funded and facilitated hundreds of deals, reinforcing its credibility and reliability in the private credit space.
• Security Measures: Percent uses bank-level encryption to protect user information, further demonstrating its commitment to maintaining a safe and secure platform for its users.
• Due Diligence: Percent performs due diligence before listing any deals on its platform. It ensures that all originators meet strict requirements, including a solid track record and substantial industry experience.
• Positive User Reviews: The platform has received positive reviews from users, many of whom praise its wide range of investment opportunities, transparency, and excellent customer service.

While all investments carry some level of risk, Percent has implemented measures to provide a secure and reliable platform for its users. Investors should perform their own due diligence and consider their risk tolerance when making investments.

Why Invest in Private Credit?

Here’s a straightforward breakdown of why I think it might be beneficial to invest in private credit.  Historically, individual investors can’t tap into private credit. However, recent SEC regulation changes have opened this avenue for accredited investors.

So, why are many institutional investors turning to private credit?

• Higher Returns: Borrowers, who either can’t access or have used up public market funding, often resort to private investors. This allows investors to demand higher interest rates and potentially get higher returns.
• Shorter Durations: Platforms like Percent have investments with an average duration of nine months. This means investors can frequently assess and adjust their investment strategies based on current conditions.
• Stability: Private credit investments often have less volatility compared to public markets. They’re often backed by assets, loan portfolios, or corporate debt which can provide a sense of security.

With platforms like Percent, accredited investors now have the opportunity to explore a variety of high-yielding, short-term investment options. For new investors, there’s also a bonus of up to $500 for the initial investment.

Beyond these specifics, private credit, encompassing both debt and equity of non-public companies, can offer advantages over traditional investments. more control over investments. Access to these individual deals give prospective investors greater control over their alternative assets.

What Are The Risks?

Like any investment platform, investing through Percent involves a degree of risk. Although the platform performs comprehensive due diligence, it’s crucial to understand the potential risks before deciding to invest. Here are some factors I would advise considering:

• Credit Risk: This is the risk that the borrower or originator defaults on their obligation to repay the loan, which could lead to a loss of investment.
• Liquidity Risk: Unlike traditional investments like stocks or mutual funds, the investments offered on Percent are not liquid. This means you might not be able to withdraw your investment before the end of the term.
• Platform Risk: While Percent has a strong track record, there is a risk associated with the platform’s operation. For instance, the platform could shut down due to financial difficulties or regulatory changes, which could affect your ability to recover your investment.
• Economic Risk: Changes in the economic environment, such as interest rate fluctuations or economic downturns, could affect the performance of your investments.
• Diversification Risk: If you invest a large portion of your capital in a single note or a small number of notes, you may face a higher risk. To manage this risk, consider diversifying your portfolio across a range of different notes and asset classes.

Reviewing Percent Performance History

Since its establishment in 2018 until mid-2023, Percent has funded 415 deals. Investors have invested over $800 million in these loans. The platform’s average default rate, which represents loans not paid on time (with a five-day grace period), is 1.89%. These loans are secured by assets, ensuring investments have some form of protection.

The typical investment duration on Percent is 9 months, with a weighted average annual percentage yield (APY) of 17.04%. For context, the average APY for high-yield savings accounts in the U.S. during this period is 4.50%.

Additionally, by the end of the first quarter of 2023, the delinquency rates on consumer loans were 2.23%, according to the St. Louis Federal Reserve.

Percent has returned $713.4 million in principal to its investors and paid out nearly $30 million in interest. The weighted average APY for investments that have already concluded is 12.8%.

Expanding Investment Horizons with Percent

• Opening Doors to Private Credit: Percent’s platform uniquely focuses on private credit investments, offering accredited investors access to a previously inaccessible alternative asset class.
• Real Estate Investment Opportunities: Among Percent’s offerings, real estate investments provide an avenue for investors interested in property-related debt financing, expanding the scope of traditional private credit investing.

Innovations in Alternative Investing

• Embracing Alternative Asset Classes: Percent’s platform encourages diversification by including alternative assets like private debt in investment portfolios, offering a counterbalance to traditional stock and bond investments.
• Enhanced Investor Experience: With its user-friendly interface and detailed investment insights, Percent elevates the investor experience in alternative asset investing, making complex investment options more accessible to the everyday investor.

Percent Alternative

If you do not like something I mentioned during my Percent review, don’t worry, they are not the only platform offering this type of alternative investment. Another big player in the private equity game is YieldStreet.

In addition to private credit, YieldStreet also offers fractional investing in Real Estate, Art and Crypto to name a few. Although the investment minimums are a bit higher than Percent, some of the deals on YieldStreet are open to non-accredited investors. To learn more about how YieldStreet works, consider reading my YieldStreet review.

Percent Review Final Thoughts – Is Percent Worth it?

For accredited investors, Percent is undeniably a platform to consider. The democratization of access to high-yield, short-term debt investments which were traditionally exclusive to a select few is a big win for diversification.

While it’s true that these types of investments come with a certain level of risk, Percent performs comprehensive due diligence, transparency around corporate borrowers and their deals.

The relatively low minimum investment requirement makes it possible for a wider range of accredited investors to participate in these unique opportunities. By expanding your portfolio into alternative investments such as private credit, you open up the possibility of realizing higher than average returns.

However, as with all investment platforms, it’s crucial to consider your financial situation, your investment goals, and your risk tolerance before making a decision. I believe a diversified and balanced portfolio, suited to your individual needs and circumstances, is the best way to achieve financial stability and growth over the long term.

Percent offers a unique platform for those looking for ways to broaden their investment horizon beyond traditional investments. Its due diligence process, transparency, and commitment to excellent customer service can help investors confidently invest in the platform’s offerings.

To learn more and explore investment opportunities on Percent, click here.

Get Started With Percent