Updated by Steward Team
Q: What Is Steward’s Loan Servicing Spread?
A: Steward’s loan servicing spread is a key piece of our revenue model and helps ensure we have the resources we need to facilitate the collection of loan payments on behalf of our lenders. Customary in the commercial lending industry, our loan servicing spread is simply the difference between the gross interest rate paid by a borrower and the net interest rate paid to lenders according to their respective loan participation agreements.
For example: On a $100,000 interest-only loan, the gross interest rate paid by the borrower might be 8.00%, while the net interest rate earned by the lender and advertised on the loan’s project page might be 7.50%. For this loan, Steward’s loan servicing spread would then be 0.50%.
Q: Does the Loan Servicing Spread change what I earn?
A: No. The loan servicing spread is above and beyond the net interest rate you see listed on a loan’s project page. That’s the rate lenders earn by participating in a Steward loan campaign, and it’s contractually protected by your loan participation agreement.
Further, the loan servicing spread relates to interest paid on the loan and has no impact on principal repayment.
Q: What is Loan Servicing?
A: Steward undertakes significant work to ensure its lenders receive their loan payments. This work includes a number of tasks, including:
- Collecting loan payments from borrowers and facilitating the pass-through of repayments to participating lenders;
- Building, maintaining, and constantly improving our website and proprietary software to quickly and seamlessly deliver thousands of lender repayments every month;
- Monitoring borrower performance and providing technical assistance to ensure borrower businesses have every opportunity to succeed;
- When needed, modifying loan terms with the consent of lenders; and
- Diligently protecting the contractual rights of lenders and pursuing every option available to return their loan principal.
Steward strives to make systematic changes to the financing landscape of regenerative agriculture, and the loan servicing spread is a key element of our revenue model that will enable us to continue to grow our impact.
If you have additional questions, please reach out to firstname.lastname@example.org.