Transaction Types:Participation Guide

Lenders Funding, LLC prides itself on being able to structure a participation to fit the needs of every Lead. Here is a representative listing of the various types and how then might be used by a Lead.

TYPES OF PARTICIPATIONS

Pari Passu — This is the most common form. We purchase a percentage interest in your transaction, which can be as low as you wish, and as high as 75% of your employed funds. The percent can be changed by you at any time, giving you great flexibility in managing risk and capital. We settle up weekly, bi-weekly or monthly, depending on the volatility of the transaction.

Fixed Dollar Amount — Our percentage interest in the deal will always change, but the dollars invested remain constant. This obviates the need for periodic settlement between us, simplifying administration.

Last-In-First Out — Assuming your deal with your debtor is capped at $4 million, but your concentration limitation is $3 million per debtor. We serve as the "shock absorber", participating in any amount by which the outstanding funds exceeds $3 million. In this way, you may accept larger deals than you concentration limits would allow, and you are always assured of maximum employed funds.

COMPENSATION ALTERNATIVES

Share in All Fees — Whatever you earn we earn, prorated for our share in the transaction.

Over-ride — You earn more than we do, since you are doing all the work. Typically, we would allow you a 10% override, meaning that if you earn 36%, we earn 90% of 36% or 32.4%.

Fixed Compensation — We earn an agreed to percentage on our employed funds, irrespective of what you earn. This is easy to administer, especially when combined with a Fixed Dollar Amount participation discussed above.

Fixed Compensation with Adjustment — Our fee is fixed, but is subject to adjustment if the actual APR earned by you is too low or too high, in relation to the fee earned by us. This prevents the deal from becoming "unfair" to either party.

Unused Participation Fee — This is often used in a Last In First Out Transaction, where we may not have employed funds for a considerable period of time, but must keep funds available to meet your possible call.

OTHER DEAL POINTS

Termination Rights — You can terminate on short notice, but we cannot.

Standard of Care — This is negotiated. Usually you will set forth the audit and verification steps you intend to take, and so long as you follow them, you will have met the standard of care. In addition you will be held to the same standard of care as (i) you follow in other deals, or (ii) a reasonable and prudent Lead would follow.